Lead time is the time between placing an order and receiving the goods in a sellable state. It includes the supplier preparing the order, transport, customs for imports and the time to receive and put away stock.
It is measured in days or weeks, and the figure is usually stored against each supplier or product in the inventory system. Actual lead time often varies, so tracking how long deliveries really take gives a more honest number than what the supplier quotes.
Retailers use lead time to set reorder points and safety stock: a longer lead time means ordering earlier and holding more buffer. Hospitality venues work with short lead times, often next day, so order cut-off times and delivery days become the practical constraint.
Pitfalls include assuming the quoted lead time holds during peak seasons, ignoring the time stock sits unreceived in a back room, and not allowing for public holidays and shipping delays. Variable lead times make forecasting and ordering harder.
Knowing real lead times helps avoid stock-outs and unnecessary over-ordering, and is one of the key inputs to any replenishment process, manual or automated. Recording the actual receipt date against each purchase order is the easiest way to measure it, and it keeps ordering rules grounded in what suppliers really deliver.