Glossary Inventory Managment / Term
Safety lead time is a way to represent your safety stock as a number of days demand. Safety lead time can be beneficial when you want to “pad” your lead-time to compensate for supplier variability, transportation variability, or internal process variability. For example, if can take 2 or 3 days to get incoming materials processed through your receiving process, you may want to set your safety lead time to 2 or 3 days. This will calculate the requested dates for your purchase orders 2 or 3 days earlier than actual need. This is much cleaner than adding the 2 to 3 days to the suppliers lead time (which can be confusing when the supplier’s stated lead-time is different from what is in your system).
Permanent link Safety lead time - Creation date 2020-07-05