# What is Lead Time?

What is Lead Time? The time from ordering with a supplier to receiving inventory. Critical for calculating the reorder point.

## How it works in practice

Lead time is the most important variable most owners ignore. A supplier from China with 45 days means ordering with 1,500 units still in stock.

## Related metrics

- Reorder Point — lead time is the foundation
- Stockout — a long lead time means high risk
- Safety Stock — a buffer for uncertainty
- MOQ — sometimes requires ordering a set quantity

## Common misconception

'The supplier said 30 days, so that's the lead time.' Always add a 20-30% buffer.

## How to fix it

Long lead time? (1) find closer suppliers, (2) add 30-45 days of safety stock, (3) get an accurate ETA on every order.

## Real-world example

A textile store switched from China (45 days) to Turkey (21 days) for Category A items, ensuring availability at peak demand and +15% sales.

## Where to start

Map lead time for every supplier by Category A. Mark reorder dates on the calendar.

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Category: Operations · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/lead-time