Inbound Freight Lead Time
Category: Operational
Measures the time taken to receive goods from suppliers after shipment.
What it Measures ?
Time from placing a PO to goods arriving.
Relevant StakeHolders
Procurement, Logistics
Why it Matters ?
Improves supplier lead time management.
In-depth Use Case / Real-world Example
A company manufacturing bicycles calculates Inbound Freight Lead Time by tracking the time it takes for materials (e.g., steel frames) to arrive after shipment. For example, if it takes 5 days for the goods to arrive after shipment, the lead time is 5 days. Shorter lead times ensure timely production and reduce inventory holding costs.
Sample Formula
Supplier Delivery Time - Purchase Order Time