--- title: "What Is Lead Time?" url: https://www.uncap.com/glossary/lead-time author: "Denis Dyli" published: 2026-10-11 updated: 2026-10-11 summary: "Lead time is the time between the start of a process and its completion. In supply chain management, a conventional definition is the time from the moment a customer places an order to the moment the goods are ready for delivery. In manufacturing it includes shipping time, so the buyer knows when parts will be available for planning." --- # What Is Lead Time? > Lead time is the time between the start of a process and its completion. In supply chain management, a conventional definition is the time from the moment a customer places an order to the moment the goods are ready for delivery. In manufacturing it includes shipping time, so the buyer knows when parts will be available for planning. **Lead time**: Lead time is the time between the start of a process and its completion. In supply chain management, a conventional definition is the time from the moment a customer places an order to the moment the goods are ready for delivery. In manufacturing it includes shipping time, so the buyer knows when parts will be available for planning. ## How it works Lead time changes with where the clock starts and stops. - External lead time: the time the supplier's processes take, including any development, manufacture, dispatch and delivery. - Internal lead time: the time the buyer's own processes take to go from identifying a need to issuing a purchase order. - Actual order lead time: the time between receiving a customer's order and delivering the goods. - Quote order lead time: the agreed time between order entry and the delivery date the supplier commits to in a contract. In manufacturing, lead time consists of three phases: **The three phases of lead time** ### 1. Preprocessing, Release the order The time to release a purchase order, or create a job for a made item, from when the need is known. ### 2. Processing, Procure or make The time required to procure or manufacture the item. ### 3. Postprocessing, Make it available The time to make a received item available in inventory, including quarantine and inspection. Because shipping and setup time can sit inside or outside the number, the same part can carry different lead times inside one company. ## Example A distributor orders 200 cases from a manufacturer. The manufacturer needs 1 day to process the order and 3 days to produce it, and the freight takes 2 days. Lead time to arrival is 1 + 3 + 2 = 6 days. The distributor needs 1 more day to receive, inspect and shelve the cases, so they are sellable 7 days after the order. With no cases in stock, a contractor who orders on day 1 and needs them by day 5 is left with a [backorder](/glossary/backorder) until day 7. ## Lead time and the reorder point Lead time shapes when to reorder: a replenishment order should go out while stock is still just enough to cover needs during the lead time. The reorder point is the inventory level that triggers replenishment, normally the forecast usage during the replenishment lead time plus safety stock: - Delivery time stock: the inventory needed during the lead time, from the order date to receipt. - Safety stock: the minimum level held as protection against shortages due to fluctuations in demand. Reorder point = normal consumption during lead time + safety stock. Illustrative numbers only: say the distributor above sells 40 cases a day and counts lead time up to sellable stock, 7 days. Consumption during lead time is 40 x 7 = 280 cases. With 60 cases of safety stock, it reorders when stock falls to 280 + 60 = 340. At the same daily sales, a longer lead time raises the reorder point, and so does more safety stock. Setting safety stock is a trade-off between the risk of stockouts and lost sales and the cost of carrying extra inventory. ## On Shopify In Shopify, purchase orders help you keep accurate records of incoming inventory. A purchase order lists the products, quantities, costs, payment terms and supplier details for an order. After it is marked as Ordered, you can create an inventory transfer for it to track shipments and receive inventory. While a transfer is in progress, inventory is marked as incoming at the destination location, and you can add an expected arrival date for each shipment. Metafields let you save specialized information for products, and if your theme supports dynamic sources you can connect most metafields to it to display that information on your online store. A buyer-facing lead time can be stored this way, with the value kept by hand or fed from ERP data. ## How Uncap helps Uncap Connect syncs inventory, pricing, and order data between the ERP and the storefront in real time, so multi-location stock is something the buyer actually sees, not something the warehouse team reconciles after the fact. Read [multi-warehouse inventory visibility for distributors](/post/multi-warehouse-inventory-visibility-order-routing). ## Related terms - Purchase order - MOQ - Landed cost - Backorder - Warehouse management system (WMS) - Order to cash ## Sources - Lead time, Wikipedia - Purchase orders, Shopify Help Center - Creating and processing inventory transfers, Shopify Help Center ## Frequently asked questions ### What does a 2 week lead time mean? It means about two weeks between placing the order and the goods being ready for delivery, or delivered, depending on how the supplier counts. Ask whether shipping time is included. ### What is the standard lead time for delivery? It depends on the product and the supplier. For new cars, the time from order to delivery by a given manufacturer might be anywhere from two weeks to six months. For planning, use the quote order lead time: the time to the delivery date your supplier commits to. ### How to reduce lead time? Make each processing step more efficient, automate the actions you can, and cut idle waiting time between stages. Supply chain research also reports that reducing both material flow lead time and information lead time is necessary to improve supply chain performance.