Lead time variability

The spread of actual lead time, receipt date minus order date, per supplier per site per item: interquartile range or standard deviation. It drives safety stock more than the mean does, and it is invisible on an on-time scorecard.

DefinitionThe spread of actual lead time, receipt date minus order date, per supplier per site per item: interquartile range or standard deviation. It drives safety stock more than the mean does, and it is invisible on an on-time scorecard.

Per site

The same supplier can be steady to one plant and erratic to another. Supplier-level averages the erratic one away.

Against the parameter

The ERP's planned lead time was set at item creation. The receipts say what it is now.

How it is computed

Actual lead time is receipt date minus order date. For each supplier, site and item, report the interquartile range and the 90th percentile alongside the median.

Example

Two suppliers both have a median of 20 days. One ranges from 18 to 22 and the other from 10 to 35. The second needs roughly three times the safety stock.

Where it goes wrong

Only the average on the scorecard. Planners carry the cost of the spread and nobody negotiates it.

Articles that use this term

Forecast and pipeline · Supply chain

Demand forecast bias by SKU and site: the plan that is always high in one place

How a supply chain team measures demand forecast accuracy and bias per SKU per site from the forecast snapshots and the actual demand: error and signed bias, the SKU-site pairs that are consistently over-forecast and carry the excess stock, the ones consistently under-forecast and carry the stock-outs, why bias at one site is usually a planner's override, and the adjustment the team's own history supports.

16 Sept 20263 min read Board and management reporting · Supply chain

Inventory ageing by site: the stock with no movement in 180 days, and the sites that hold it

How a supply chain team reads inventory ageing per SKU per site from the stock and movement files: days since last issue, value in each ageing band, the sites where aged stock concentrates, the SKUs aged at one site and moving at another, the transfer that releases the cash, the write-down exposure at stated bands, and the identity that aged plus moving stock equals the inventory ledger.

16 Sept 20263 min read Territory, capacity and quota planning · Supply chain

Lead time variability per supplier per site: the number behind the safety stock

How a supply chain team measures actual lead time and its variability per supplier per site per item from purchase orders and receipts, why the spread drives safety stock more than the mean, the suppliers whose variability rose while their average held, and the inventory that a tighter supplier or a corrected lead time parameter would release.

16 Sept 20263 min read Alternatives and comparisons · Supply chain

How to choose analytics software for supply chain: questions, data and traps

How supply chain teams should choose analytics software: start from the questions, check the data you hold, ask vendors ten questions, avoid the traps.

24 Sept 20264 min read How-to guides

KPIs by industry: thirty-one desks, ten measures each, with the formula and the export behind it

A hub for the industry KPI pages on this site. For each of thirty-one industries and functions, from wholesale distribution and foodservice to commercial banking, law firms, freight, pharma, SaaS and sports, one page lists the ten measures that matter, each with its formula, the export it comes from and what it tells you, plus the three measures most teams in that industry miss, the figures to drop, the identity behind each table and who should own what. This page lists them all with the measure each industry most often overlooks.

17 Sept 20265 min read Board and management reporting · Supply chain

KPIs for supply chain teams: ten measures that matter, each with its formula and the export it comes from

The ten KPIs a supply chain function should run on, each with its formula, the export it comes from and what it tells you: supplier OTIF against each supplier's own baseline, lead time variability, customer OTIF under each customer's rule, forecast bias by SKU and site, inventory ageing, single-source exposure, days of cover against target, expedite cost, supplier deterioration watch, and cause of service misses. Also the three measures most teams miss, the figures to drop, the identities, and who owns what.

17 Sept 20264 min read