Configuring lead time

Lead time setting is among the most critical parameters when analyzing inventory level safety. After all, amortizing the long lead time is one of the reasons you have to keep your warehouse and not ship directly from vendors to customers.

Lead time includes everything required to wait between the moment when a purchase decision is made and when the product is available for sale to your customers. It includes, for example:

Time to communicate with the shipper and request a quotation;
Time to confirm the purchase;
Time to settle down the payment;
Time to manufacture and dispatch the shipment;
Time for shipment consolidation;
Time in transit;
Time to receive products and perform quality control.

Stock Roll relies on lead time to estimate required re-stock quantities. If it is misconfigured, the bottom numbers will be misleading. For example, if the lead time is set to 14 days and, in reality, shipments take 21−24 days, your product has a risk of going out of stock for 7−10 days. Carefully set correct values and revisit them occasionally to ensure they reflect the actual supply chain condition.

When the lead time can vary due to uncertainties, be moderately pessimistic and pick the upper bound for the configuration. This way, if shipment goes faster, you’ll get a slight overstock, but if shipment is slow, you avoid going out of stock.

Setting up default lead time for all products

All configurations related to lead time are available on the Stock Roll 🡒 Settings page. Lead time values are per product. However, it would be impractical to set it for every product because it’s often the same for various groups of products.

The most basic setting is the default lead time. Unless overridden for specific groups, it applies to all products (see below). Use it as a baseline to assign lead time to most of your products. For example, if you are in Europe, mainly supply your products from China by sea, and based on past experience, the end-to-end purchase takes 5−6 weeks, set the default lead time to 42 days.

Overriding lead time per-vendor

You can override the default lead time of some products using rules. If you have a supplier/vendor whose shipments arrive faster or slower than the default, you can set an adjusted lead time for all associated products.

To override lead time for a specific vendor click “Custom rules” 🡒 “+ Add rule” on the settings page.

Then:

Select “Rule applies to vendor”
Select the target vendor
Set the desired lead time value

Overriding lead time per-product

You can also assign individual lead time to a specific product for fine-grain control. The lead time set at the product level takes precedence over any other lead time rules for this product, i.e., it has the maximal priority.

The mechanism is similar. Click “Custom rules” 🡒 “+ Add rule” on the settings page.

Select “Rule applies to product”
Select the target product
Set the desired lead time value