Common Lead Time Mistakes and How to Avoid Them

Lead time is a deceptively simple concept, but people often make mistakes that cost time and money. This article covers the most common mistakes beginners make with lead time and practical ways to avoid them. The tone is friendly and actionable — think of it as a short checklist to help you get lead time management right.

Mistake 1: Measuring the wrong thing or nothing at all.

Some teams don’t measure lead time consistently or they measure only part of the process, which leads to bad planning. To avoid this:

• Define clear start and end points for lead time and measure across the whole process, including administrative and transit times.
• Collect data for multiple orders or production runs to understand averages and variability.

Mistake 2: Relying on averages only.

An average lead time hides variability. If average lead time is 10 days but can range 5–20 days, planning off the average will cause stockouts. Avoid this by:

• Tracking variability (standard deviation, range) and using safety stock calculations that incorporate variability.
• Using service-level targets to decide how much safety stock you need for acceptable risk.

Mistake 3: Ignoring external partners.

Suppliers, carriers, and customs influence lead time heavily. Treating lead time as only an internal issue leads to surprises. Prevent this by:

• Communicating lead time expectations with suppliers and carriers and getting commitments where possible.
• Building relationships and contingency plans for critical suppliers or routes.

Mistake 4: Over-reliance on large safety stock.

Some teams solve long or variable lead times by carrying lots of inventory. That reduces stockouts but ties up cash and increases waste. Better approaches include:

• Improving lead time through process changes, supplier negotiation, or logistics optimization.
• Using targeted safety stock for critical SKUs rather than blanket overstocking.

Mistake 5: Not including non-production delays.

Administrative delays, waiting for approvals, or slow quality checks are often overlooked. Make these visible by:

• Mapping processes and timing each administrative step.
• Streamlining or automating approvals where possible.

Mistake 6: Treating all SKUs the same.

Different products have different demand patterns and importance. A one-size-fits-all lead time strategy wastes resources. Improve this by:

• Classifying SKUs by demand, value, and lead time sensitivity (an ABC or XYZ analysis).
• Applying different reorder points, safety stock, and sourcing strategies by class.

Mistake 7: Failing to update lead times.

Markets, suppliers, and transportation conditions change. Using old lead time numbers leads to bad decisions. To prevent this:

• Review lead time data regularly and update planning parameters when performance or conditions change.
• Monitor early warning signals such as longer transit times, frequent quality holds, or production delays.

Practical example

A retailer assumed supplier lead times were constant and ordered based on historic averages. When a key supplier moved production overseas, shipping times doubled. Because the retailer didn't update lead times, they ran out of best-selling items. The cure was to track supplier performance monthly and include transit and customs times in the measured lead time.

Quick checklist to avoid lead time mistakes

1. Define clear start/end points and measure lead time end-to-end.
2. Track average and variation, not averages alone.
3. Include suppliers, carriers, and administrative steps in your measurements.
4. Classify SKUs and apply differentiated strategies.
5. Update lead times regularly and act on early warnings.

Avoiding these common mistakes will make your planning more reliable and reduce emergency orders and excess inventory. Start with small, regular improvements, and over time you’ll see lead time become a tool for better decisions rather than a source of headaches.