Definition
Supplier, internal and total lead-time measurement and control. This reference is designed for practical industrial stores, MRO, production and materials-management environments.
Objective
Measure the elapsed time between demand signal and usable material availability.
Scope
Apply the method at item, category, location or plant level as appropriate. The control should connect planning, purchasing, stores transactions, physical verification and management review.
Required Inputs
- PR date
- RFQ date
- PO date
- acknowledgement
- dispatch
- receipt
- inspection
- put-away.
Methodology
- Define the business requirement, scope and review period.
- Validate item master, consumption, stock and open transaction data.
- Calculate or classify using the defined method.
- Compare the result with criticality, supplier constraints and future demand.
- Assign an action owner, due date and review frequency.
- Monitor KPI movement and revise parameters when conditions change.
Formula / Control Logic
Worked Industrial Example
A PO placed on 1 June, received 18 June and released from inspection on 20 June has 19 calendar days to usable stock.
Decision Rules
- Measure actual lead time from transaction history.
- Track average and worst-case lead time for critical items.
- Review supplier and internal delays separately.
Industrial Controls
- Authorized master-data and parameter changes
- ERP transaction discipline and document traceability
- Physical verification and reconciliation
- Exception reporting with named ownership
- Periodic management review of ageing, service and capital exposure
KPIs
Service
Availability, fill rate and stock-out performance.
Accuracy
Book-to-physical reliability and transaction quality.
Capital
Turnover, coverage, ageing, excess and dead stock.
Common Errors
- Using quoted lead time forever.
- Ignoring inspection and internal processing.
- Mixing calendar and working days.
Excel / MIS Application
Useful fields: Item Code, Description, UOM, Opening Qty, Receipt Qty, Issue Qty, Closing Qty, Unit Rate, Annual Consumption, Current Stock, Open PO, Lead Time, Safety Stock, ROP, Min, Max, ROQ, ABC, VED, FSN, Ageing, Action.
Management Review Questions
- Which items require action now, and why?
- Are open orders aligned with actual requirement?
- Which exceptions are recurring and what is the root cause?
- Which parameter should be changed, and what evidence supports the change?