Quick Summary: Distinguish between Measured Lead Time and Average Lead Time to understand their unique derivation methods, data inclusions, and specific influences on planning and performance analysis.
Purpose and Context
Lead time data drives every replenishment and safety stock calculation in the app. To keep this data accurate, the app calculates two types of averages from historical deliveries:
Measured Lead Time provides the most reliable reflection of true supplier delivery performance for replenishment planning.
Average Lead Time focuses on supplier consistency within the Supply Risk framework used for performance measurement.
Although both values come from the same purchase order data, the app applies different filters and calculations to each.
What Measured Lead Time Represents
Measured Lead Time represents the supplier’s typical delivery time, excluding abnormal or unreliable data. It captures the most realistic average number of days between when a purchase order is placed and when it is received.
You can view Measured Lead Time for an item on the Inquiry > Measured LT tab.
Measured Lead Time is used in replenishment planning when configuration is set to Measured by Historical Deliveries. In that case, it becomes the active Planning Lead Time.
Measured Lead Time Calculation
The app applies several exclusions to ensure that only valid and representative deliveries are included:
Age of purchase orders: Only purchase orders from the last two years are included by default. This setting can be adjusted in Configuration > Supplier.
Supplier relevance: Deliveries from non-preferred suppliers are excluded because their lead times do not represent the supplier used for planning.
Outliers: Deliveries that fall more than three standard deviations outside the average are excluded to prevent distortion.
Blanket orders: When multiple receipts share the same product, supplier, and order date, only the first receipt is included.
Invalid data: Receipts with zero or negative quantities and any receipts corrected by event correction rules are excluded.
After these exclusions, the system calculates an average across all valid deliveries.
The calculation requires at least three valid receipts and stores results at several levels:
Overall (across all suppliers)
By supplier
By supplier and location
By supplier, location, and product
The most specific level available is applied as the Measured Lead Time for each item/location. This means that if there is not enough valid data for a specific item/location/supplier, the app will use the next most granular level available, such as a supplier-level or global average.
What Average Lead Time Represents
Unlike Measured Lead Time, which may draw from a broader range of purchase order data, Average Lead Time is based solely on deliveries specific to the product, location, and preferred supplier. This keeps the calculation closely aligned with actual performance and supports more precise safety stock levels.
You can view Average Lead Time on the Inquiry > Supplier Performance tab.
While Measured Lead Time focuses on delivery timing and replenishment accuracy, Average Lead Time measures supplier consistency using broader statistical filters and additional cut-offs to evaluate reliability within the Supply Risk framework.
Average Lead Time Calculation
Average Lead Time begins with the same exclusions as Measured Lead Time but applies additional filters specific to supplier performance measurement:
Configured cut-offs: Deliveries that fall beyond the set limits in Configuration > Supplier are excluded. These settings define how many standard deviations or what percentage variance from the mean are acceptable.
This calculation also requires at least three valid receipts after filters and cut-offs are applied. The result represents the supplier’s average delivery time used in the Supply Risk calculation.
Key Differences at a Glance
Feature | Measured Lead Time | Average Lead Time |
Purpose | Used for planning and replenishment | Used for supplier performance and Supply Risk analysis |
Location in the app | Inquiry > Measured LT tab | Inquiry > Supplier Performance tab |
Data exclusions | Filters out outliers, blanket orders, invalid and outdated deliveries | Applies same filters plus additional statistical cut-offs |
Delivery scope | May draw on global, supplier, or supplier/location averages when item-level data is limited | Always based on data for the specific product, location, and preferred supplier |
Usage | Can become Planning Lead Time when configured accordingly | Feeds Supply Risk and Offset calculations |
⚠️ Watchouts
Preferred supplier only: Both values are calculated from deliveries by the preferred supplier. If an item is ordered from another supplier, these metrics may not apply.
Minimum data requirement: Fewer than three valid receipts prevent both calculations from running. The app then defaults to imported or manually set Planning Lead Times.
💡 Tips
Check both values: Compare Measured Lead Time and Average Lead Time to understand both planning accuracy and supplier consistency. Large differences between the two may indicate unreliable data or inconsistent supplier performance.
Investigate outliers: Review excluded deliveries in the Measured LT tab to confirm whether they are genuine exceptions or data errors.
Review configuration settings: Adjust cut-off parameters in Configuration > Supplier if valid deliveries are being excluded too aggressively.
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