Lead times are more than just numbers on a spreadsheet. They are promises. Promises from your suppliers to your warehouse. Promises from your warehouse to your customers. And ultimately, promises that reflect your company’s reliability.
But how often are those promises kept?
Let’s explore why lead time analysis is crucial, how mismatches between promised and actual lead times can quietly derail performance, and how tracking this with the right data can strengthen both supplier relationships and supply chain KPIs.
The real cost of lead time inaccuracy
Lead time is the duration between when an order is placed with a supplier and when the goods actually arrive and are ready to use or sell. At first glance, this seems straightforward. But anyone managing procurement or inventory knows that lead time is rarely consistent and rarely accurate.
What happens when a supplier says they’ll deliver in 14 days, but it takes 19?
- You reorder too late. You may find yourself dipping into safety stock or, worse, facing a stockout.
- You order too early. You tie up working capital in inventory that arrives too soon, eating up space and cash.
- You lose trust. Internally, your team questions planning accuracy. Externally, your customers feel the impact.
In short: when promised lead times don’t match actual performance, the ripple effect hits inventory efficiency, customer satisfaction, and supply chain costs—all of which are core KPIs.
Lead times as a KPI driver
Too often, companies focus on inventory KPIs like turnover ratio, service level, or fill rate in isolation. But lead time variability is often the hidden input behind these numbers.
Here’s how poor visibility into lead times can distort key performance indicators:
| KPI | Effect of unreliable lead times |
| Stockouts | Higher risk when orders arrive late |
| Inventory Turnover | Slows down due to buffer stock accumulation |
| Customer Service Level | Drops if deliveries are delayed or incomplete |
| Cash Flow | Suffers when early deliveries create overstock |
When you analyse and track actual vs. promised lead times, you gain insight into the source of variability and can tie those fluctuations back to performance trends. Suddenly, you’re not just reacting to poor KPIs—you’re proactively managing the root causes.
Lead time analysis: A tactical approach
So how do you gain this visibility?
Modern inventory management tools, like the lead time analysis module in AGR’s platform, can help you track how supplier promises match up to reality. Here’s what that looks like in practice:
1. Capture promised lead times
Every supplier provides expected delivery times when you place an order. Make sure you’re logging this data systematically.
2. Track actual delivery dates
Record when the goods are actually received and booked into inventory. Automate this process to avoid human error.
3. Compare and analyse
Calculate the variance between promised and actual lead times for each supplier, product category, and order type.
4. Visualize the patterns
Use dashboards to visualize consistent delays, early shipments, or high variability. This data becomes the foundation for performance reviews with suppliers.
Example: Supplier lead time scorecard
Let’s say you work with three main suppliers. You notice the following after three months of tracking:
| Supplier | Avg promised lead time | Avg actual lead time | Variance | On-time delivery % |
| Supplier A | 10 days | 11 days | +1 | 91% |
| Supplier B | 12 days | 16 days | +4 | 72% |
| Supplier C | 8 days | 7 days | -1 | 96% |
With this analysis, you now have data-backed leverage in supplier negotiations. You can:
- Push Supplier B for improvements or build buffer stock accordingly.
- Recognize Supplier C as a strategic partner for time-sensitive SKUs.
- Refine safety stock levels to match real-world behaviour, not outdated assumptions.
This is how lead time analysis transforms guesswork into actionable strategy.
Stronger relationships through accountability
Lead time tracking isn’t just about pointing fingers. It’s about accountability and partnership.
When you sit down with a supplier and say, “Here’s what we agreed, and here’s what’s happening,” backed by neutral, transparent data, it creates space for problem-solving:
- Maybe they need longer lead times during peak season.
- Maybe their shipping partner is the weak link.
- Maybe they’ve improved performance and deserve more volume.
The result? You shift from reactive frustration to proactive collaboration.
And remember, suppliers are managing their own KPIs. When you share this analysis, you’re helping them improve their own performance metrics, delivering a win-win.
The power of data-driven trust
It’s one thing to talk about trust and transparency. It’s another to show up with hard numbers. A lead time analysis tool becomes a shared truth in your supplier conversations.
It allows you to:
- Reduce friction in day-to-day ordering
- Plan promotions and launches with confidence
- Deliver on customer expectations consistently
And most importantly, it strengthens the foundation of your vendor relationships, making them more resilient in the face of disruption.
Making it happen: Getting started
Here’s how you can begin leveraging lead time analysis for your supply chain:
- Audit your data. Are you capturing promised and actual delivery dates? If not, start now.
- Choose a tool that tracks and visualizes lead time performance. AGR’s lead time module is built for this.
- Set internal KPIs. Track your own lead time forecasting accuracy. Use it as a metric of planning discipline.
- Loop in your suppliers. Share your analysis regularly. Frame it as an opportunity, not an accusation.
Final thoughts: Small variance, big impact
In supply chain operations, small lead time variances can create large disruptions. But with visibility, accountability, and the right tools, you can turn those variances into insights and insights into competitive advantage.
Lead time analysis isn’t just a technical exercise. It’s a conversation starter. A trust builder. And one of the smartest ways to make your vendor relationships work better for everyone.
