Overview of Lead Times
Lead time refers to the total duration between the initiation of an order (order date) and its culmination (receipt date). It represents the span needed for a supplier to fulfill an purchase order.
Understanding lead time is crucial in inventory management as it helps businesses determine when to place orders to replenish stock and avoid potential shortages. A shorter lead time can enhance business agility, while a longer lead time might require maintaining higher inventory levels to cater to demands during the waiting period.
How Recurrency Calculates Smart Lead Times
💡 Recurrency utilizes a "Smart Lead Time" approach, which dynamically calculates lead times for each item-location combination. This method takes into account both historical lead times specific to the item-location and the overall performance of the supplier across all item-location pairs, ensuring a more accurate and responsive lead time assessment.
Recurrency's Smart Lead Times are a vital component of our system's capabilities to enhance your inventory management. We take the full history of purchase orders to see what all past lead times have been for the supplier going to the location, separate out the ones specifically for that item, and use an algorithm to calculate the most likely lead time if someone was to order right now. This is done using a recency bias (more recent lead times are more likely to happen) and an item bias (purchases of this item are more likely to affect purchases of this item). By combining this data, we can determine a lead time estimate for a purchase happening right now.
Recurrency Smart Lead Times uses two particular sets of data:
Actual Lead Times from the Item: We incorporate the specific lead times associated with the particular item you are managing.
Actual Lead Times from the Supplier: We also take into account the lead times of all items acquired from the same supplier.
Manual Override of Recurrency Smart Lead Times
These combined factors provide a comprehensive understanding of your supply chain and contribute to our Min/Max recommendations. However, there may be times where your knowledge or unique circumstances may require deviations from the automatically generated Smart Lead Times. In such cases, you are able to manually override the Smart Lead time functionality.
You can override Smart Lead Times from multiple places in the Recurrency platform:
From the Planning Tab, by navigating to the Actions icon.
From the Planning Tab, by performing a bulk update.
From the Planning and Purchasing tabs, directly in the Context Panel.
Should you find the need to modify the Smart Lead Time for any reason, you can easily do so by following this step-by-step guide:
Access the Context Panel: Start by navigating to the Context Panel which appears when you click on an item, both in the Planning tab in the Planning module, and the Line Item details in the Purchasing module.
Select the Relevant Item: Click on the specific item you wish to modify the Lead Time for. This will open the item context panel on the right side of the screen.
View the Current Lead Time: In the top section of the item context panel, you will find the current Lead Time for the selected item.
Edit the Lead Time: Next to the current Lead Time, you'll notice an edit button. Click on it to initiate the Lead Time modification process. A pop-up window will appear, allowing you to select Override and then enter a new value
Apply the Override: To confirm the changes, click the Update button.
If you prefer to make updates in bulk, you can:
Navigate to the Planning tab.
Select all the items you want to bulk update.
Click on the Actions button on the top-right-hand side of your screen (see #3 in image above).
Follow steps 4-6 above. Note that this will override all the selected items with the same lead time.
Once you override the lead time(s), the Recurrency Recommended Min/Max values for the selected item(s) will be updated according to the newly entered Lead Time. This ensures that your inventory management aligns with your specific requirements and optimally adapts to your evolving needs.
You can revert back to Recurrency Smart Lead Times at any point using the same edit process. Instead of clicking on Override, select Smart and then Update.
We understand that real-world scenarios can vary, and our system is designed to empower you with the flexibility to make informed decisions in your inventory management process. By allowing manual overrides of Smart Lead Times, we aim to enhance your control and customization over your inventory management strategy.