Skip to main content

Lead Time & Reorder Points

Lead time is the number of days between when you place an order and when it arrives. Understanding lead time is critical to preventing stock gaps.

Quick Definitions​

Lead Time​

Time from order placement to shipment receipt.

  • Example: Order Monday, receive Friday = 4 days lead time
  • Varies by: Supplier, shipping method, location

Reorder Point​

Inventory level at which you should place a new order.

  • Formula: (Lead Time × Average Daily Sales) + Safety Stock
  • Purpose: Ensures you never run out while waiting for delivery

Running Low Threshold​

Your configured reorder point that triggers alerts.

  • Set in: Settings → Insight Settings → Stock Levels
  • Triggers: "Running Low" status when on-hand reaches this level

Why Lead Time Matters​

The Problem​

If you have 30-day lead time but only 10 days of inventory,
you'll run out BEFORE your new shipment arrives.

The Solution​

Reorder BEFORE you run out by accounting for lead time.

Reorder Point Formula​

Reorder Point = (Lead Time × Average Daily Sales) + Safety Stock

Example Calculation​

Product: Blue T-Shirt

VariableValue
Lead time30 days
Average daily sales5 units/day
Safety stock15 days
(30 × 5) + (15 × 5)225 units

Meaning: When on-hand drops to 225 units, place a purchase order.

Why? Because:

  • You'll sell 150 units in the next 30 days (lead time)
  • You'll have 75 units left (your safety stock buffer)
  • New shipment arrives before you run out

Accounting for Supplier Variability​

Reliable Supplier​

Characteristics:

  • Always delivers on time
  • Consistent lead time
  • Predictable performance

How to handle:

  • Use their stated lead time directly
  • Example: They say "30 days" = use 30 days
  • Lower safety stock buffer acceptable
  • Monitor but expect consistency

Example:

  • Stated lead time: 30 days
  • Your formula: (30 × ADS) + Safety Stock
  • Confidence: High

Unreliable Supplier​

Characteristics:

  • Variable delivery times
  • Occasional delays
  • Unpredictable performance

How to handle:

  • Add 5-10 days to stated lead time
  • Example: They say "30 days" = use 35-40 days
  • Higher safety stock buffer recommended
  • Monitor closely, consider switching

Example:

  • Stated lead time: 30 days
  • Actual average: 35-40 days
  • Your formula: (40 × ADS) + Safety Stock
  • Confidence: Medium

Where to Find Lead Times​

Product Suppliers Tab​

In Synplex inventory table:

  1. Click product name
  2. Go to Suppliers tab
  3. See lead time for each supplier
  4. View/edit lead time if needed

Supplier Management​

In Suppliers section:

  1. View all suppliers
  2. See average lead time per supplier
  3. Update lead times as they change
  4. Track supplier performance

Historical Data​

Synplex tracks:

  • Typical lead time per supplier
  • Variance (standard deviation)
  • Most recent order timeline
  • Performance trends

Setting Your Reorder Point in Synplex​

Global Reorder Threshold​

  1. Go to Settings → Insight Settings
  2. Find Stock Levels section
  3. Look for Running Low Threshold field
  4. This sets your global reorder point

How It's Calculated​

Synplex automatically calculates based on:

  • Lead time (from supplier settings)
  • Average daily sales (from your configured period)
  • Stock buffer/safety stock (from your settings)

Customizing Per Product​

For different categories or suppliers:

  • Set different lead times per supplier
  • Synplex recalculates reorder points automatically
  • View per-product reorder point in details page

Real-World Timeline Example​

Product: Winter Boots

Setup​

  • Lead time: 45 days
  • ADS: 5 units/day
  • Safety stock: 20 days
  • Reorder point = (45 × 5) + (20 × 5) = 325 units

Timeline​

Day 1: On-hand = 400 units (healthy)

Day 20: On-hand = 300 units (approaching reorder point)

Day 21: On-hand = 295 units (NOW at reorder point)

  • Status: Running Low ⚠️
  • ACTION: Create PO TODAY

Day 22-45: On-hand decreases to 75 units

  • New shipment in transit
  • Continue selling

Day 46: On-hand = 0 units, BUT new shipment arrives

  • Status changes from Out of Stock → Healthy
  • New shipment = 500 units received
  • On-hand = 500 units

Day 47 onward: Cycle repeats

Result: Never ran out of stock ✅

Common Mistakes & How to Avoid Them​

Mistake 1: Using Supplier's Promised Lead Time​

Wrong: Supplier says "30 days," you use 30 days

Problem: They're often late. You run out.

Fix: Track actual lead times over 3 months, add buffer for variability

Mistake 2: Not Updating Lead Times​

Wrong: Never change lead times in system

Problem: Supplier changes or improves, but you're still using old time

Fix: Review lead times quarterly, update when they change

Mistake 3: Ignoring Peak Season Lead Times​

Wrong: Use same lead time year-round

Problem: In peak season, suppliers are slower. You stock out.

Fix: Increase lead time 1-2 weeks during peak season

Mistake 4: Forgetting to Account for Safety Stock​

Wrong: Reorder point = Lead time × ADS (no safety stock)

Problem: You hit stockout right when shipment arrives

Fix: Add safety stock buffer: (LT × ADS) + (Safety Days × ADS)

Best Practices​

Practice 1: Know Your Lead Times​

  • Track actual lead time (not promised)
  • Supplier performance data
  • Average variance
  • Seasonal variations

Practice 2: Build in Safety Stock​

Never calculate reorder point without safety stock:

WRONG: RP = Lead Time × ADS
RIGHT: RP = (Lead Time × ADS) + (Safety Days × ADS)

Practice 3: Review Quarterly​

Every 90 days:

  • Check if lead times changed
  • Assess supplier reliability
  • Adjust if needed
  • Update in system

Practice 4: Account for Peak Seasons​

  • Increase lead times 1-2 weeks during peak
  • Increase safety stock during peak
  • Plan ahead for increased demand

FAQ​

Q: How do I find my supplier's actual lead time?

A: Look at your past POs. When did you order vs. when did it arrive? Average those.

Q: Should I add buffer to lead time or safety stock?

A: Both! Add buffer to lead time (for supplier variability), then add safety stock separately (for demand variability).

Q: Can lead times change within the year?

A: Yes. Seasonal slowdowns, holidays, supply chain disruptions can all change lead times.

Q: What if I have multiple suppliers for one product?

A: Use the fastest/most reliable supplier for your reorder calculations. Others are backup.

Q: How do I know if my reorder point is right?

A: Track stockouts. If frequent, reorder point is too low. If overstocked, too high.

Next Steps​

  1. Review your lead times — Settings → Suppliers
  2. Check your reorder points — Are they calculated correctly?
  3. Track actual lead times — Compare promised vs. actual over 3 months
  4. Adjust if needed — Update lead times in system
  5. Review quarterly — Keep lead times current

Questions?​

Contact support@synplex.io for help with lead time configuration.