Why are Lead Days important?
The number of 'lead days' a product has represents the number of days it takes for its stock to arrive once it is ordered from a supplier. In the Advanced Inventory Manager (AIM), you can use modelling to calculate or bulk update 'lead days' for each product or warehouse. Doing so will ensure that the stock limits and replenishment timings are calculated with enough stock on hand to cover the delivery window.
Just in Time
If you are using the Just-in-Time (JIT) strategy, Lead Days are built into the minimum stock limit based on the rate of demand.
For example, if a product takes a week to arrive and you have a rate of demand of 2 per day, the Just-in-Time strategy will set the minimum stock limit to 14 units. When you have 14 units remaining, a low stock alert will prompt you to reorder more stock via the Reorder Report.
Calculate Lead Days in AIM
When you load products into AIM's modelling grid, the existing lead days will be displayed. If they are updated, the updated value will be bolded, highlighting the change.
You can open the Lead Days panel by clicking the Lead Days button.
The drop-down menu in the Lead Days panel will let you select the logic you wish to use to update the Lead Days values for products that are loaded into the modelling grid.
Where no lead days exist: This option will set the lead days to be updated for products that do no have lead days. This is useful if you have new products that don't have lead days, but don't want to update other products that do.
Override all: This option will override all the products loaded in the modelling grid, whether they have lead days set currently, or not.
No change, use existing: This is the default option and will not update the lead days of any products when selected.
The next step is to choose how to update the lead days values for your products. You have three options to choose from.
After selecting the logic used to calculate your product's Lead Days, you can decide whether to use an average (Actuals) or pre-set (Set Value) delivery time, using the "Use Actuals" checkbox.
Use Actuals
When "Use Actuals" is ticked, the lead days are calculated based on the average delivery time from the product's history. You can choose to toggle this option on, and it will be used when applicable. If the system doesn't have any lead time history for the product, it will default to the value entered.
Set Value
When "Use Actuals" is not ticked, the value (in days) entered in the free text field will be used to calculate the lead time.
Once you hit 'Calculate,' the lead days in the modelling grid are updated.
🤓 Tip: Consider loading the modelling grid by warehouse and supplier. For example, if you know one supplier takes two weeks to deliver to one warehouse, load those two selections as filters, select 'Override All', type in 14 and calculate!
The third way to update Lead Days is to go down the modelling grid and tweak the lead days value directly. This may be time-consuming, but can tweak lead days for exceptions if needed.