Lead times
ForesightAI can predict your sales demand and use the Lead times and Purchase order periods to decide when to order, and how much. Smart Reorder aims to balance meeting customer emand with minimizing inventory holding costs and avoiding both stockouts and overstock. Smart Reorder suggestions will recommend purchasing products to meet your forecast sales demand and keep a safe stock level. This safety stock ensures you can meet daily sales demand
Lead time: how many days till you receive your goods after purchasing from your supplier.
Purchase order period: how frequently Smart Reorder will suggest a purchase order. You decide how many days you want between orders.
What is Lead Time?
It helps determine the exact date when a purchase order (PO) needs to be placed to avoid running out of stock.
Longer lead times necessitate ordering well in advance. If demand for those items decreases in the interim, they could become obsolete by the time they arrive, leading to deadstock.
Lead time accuracy is a critical factor in calculating safety stock. Since goods can be delayed in reality, even if a supplier's theoretical lead time is, for example, 14 days, the system must account for potential delays (e.g., 2 days, a week, or a month late) to prevent stockouts.
How Cin7 ForesightAI uses Lead Time:
Cin7 ForesightAI can dynamically calculate real lead times from historical purchase orders, including their variability.
This variability is then translated into buffer stock (safety stock), which acts as an extra layer of inventory to absorb uncertainties in delivery times.
Lead times are considered at various stages of the supply chain, including supplier deliveries, transfers between warehouses, and production processes. To generate correct POs, the system aggregates lead times across the entire chain from the point of sale back to the original supplier.
Setting Lead Times:
Lead times are set automatically based on supply history. Users can however overwrite them manually in the Suppliers setting tab inside the ForesightAI application. You can access the application by clicking on “Forecast and Settings” on the Smart Reorder page in Core.
Lead times for transfers are set in the Warehouse settings inside the ForesightAI application.
For specific products (SKUs), lead times can be adjusted in the Edit Arena if they differ from the overall supplier settings.
Choose a product from filters.
Then, pick an SKU you want to set a lead time for, or, change it in bulk.
Then:
If you need to set a lead time for one SKU simply change the number in the same row and that's it.
If you need to set a lead time for all SKUs change the number above individual SKU rows and then click Confirm.
If you'd like to set the automatic rule for future edits, check the box and click Confirm. It will automatically set a lead time number for every future edit with this SKU.
Have a great day!