The lead time calculation formula is the date the order arrived minus the date you placed it: received date − order
date = lead time in days. Work it out for every order, then take each supplier's average, its worst, and how much it
varies, because those three numbers, not the supplier's promise, are what your reorder point needs. In Excel it's
=E2-C2, or =NETWORKDAYS(C2,E2)-1 for working days. Below is a real summer of orders worked through, and the log to
download.
The short version
- Lead time = date received − date ordered. Count calendar days unless your supplier only counts working days.
- Record it for every order. Three months of orders tell you more than any quote.
- Keep three numbers per supplier: the average, the worst, and the spread (standard deviation).
- Use the average in your reorder point and the spread in your safety stock. Never the promise.
- Or let the receiving do it: TaroStack checks each supplier's real lead times against what they promised. More below.
The formula, on one order
On Wednesday, July 15, 2026, Windward Roots, the made-up taro business I use in these examples, ordered a case of coconut milk from its grocery wholesaler. It arrived on Tuesday, July 21.
Lead time = received − ordered = July 21 − July 15 = 6 days
In Excel, with the order date in C2 and the received date in E2, =E2-C2 gives 6, because Excel stores dates as
numbers of days. If the answer looks like a date, format the cell as a number.
Working days are different: =NETWORKDAYS(C2,E2)-1 gives 4. NETWORKDAYS counts both the first and the last day,
which is why you take one off, and it skips Saturdays and Sundays. Add a list of holidays as a third argument if your
supplier closes for them (Microsoft).
Which to use? Calendar days, if your stock keeps going down on weekends, which for most kitchens it does. Working days only if you use them for everything else too.
A summer of orders
One order tells you almost nothing. Here's every order to Windward Roots' three main suppliers from June to September:
| Supplier | Promised | Lead times, in order | Average | Worst | Spread | On time |
|---|---|---|---|---|---|---|
| Flour supplier | 3 days | 3, 3, 4, 3, 3, 4 | 3.3 | 4 | 0.5 | 4 of 6 |
| Grocery wholesaler | 4 days | 5, 6, 5, 7, 5, 7 | 5.8 | 7 | 1.0 | 0 of 6 |
| Packaging supplier | 10 days | 11, 14, 11, 14 | 12.5 | 14 | 1.7 | 0 of 4 |
The flour supplier is close to its word. The wholesaler says four days and has never once delivered in four: the quickest was five, and two of six took a week. The packaging supplier's ten days is really twelve and a half.
Spread is the standard deviation of the lead times, and it's the one a spreadsheet rarely has. For the
wholesaler's six orders, =STDEV(F8:F13) gives 0.98 days. It says how much one order differs from the next, which is
what safety stock has to absorb.
Download the lead time log. It has these orders, and a supplier tab that works out the average, worst, spread and on-time rate for each supplier with formulas that work in any version of Excel, Google Sheets and LibreOffice:
Average =AVERAGEIF(Orders!A:A, "Grocery wholesaler", Orders!F:F)
On time =COUNTIFS(Orders!A:A, "Grocery wholesaler", Orders!H:H, 0) / COUNTIF(Orders!A:A, "Grocery wholesaler")
Days late =MAX(0, F2-D2)
For the worst, Excel 2019 and later have MAXIFS. The download uses a SUMPRODUCT version instead so older Excel copes.
What the real lead time does to a reorder point
In a full kūlolo week, Windward Roots goes through about 8 cans of coconut milk a day. Here's the reorder point on the promise, and on the record:
| On the promise | On the record | |
|---|---|---|
| Lead time | 4 days | 5.8 days |
| Used while waiting (8 a day) | 32 cans | 47 cans |
| Safety stock for the spread (1.65 × 8 × 0.98) | 13 cans | 13 cans |
| Reorder point | 45 cans | 60 cans |
Ordering at 45 runs the kitchen out whenever the wait is six days or more, which was half of this summer's orders. The safety stock line assumes daily use is steady and only the delivery varies; when both vary, the fuller formula is in the safety stock formula, and the arithmetic of the reorder point itself is in the reorder point example.
The fix isn't always more stock. Showing the wholesaler their own record, six orders and none on time, is a conversation worth having, and so is a second supplier.
Your own lead time, if you make things
When people ask about lead time for a manufacturing unit, they mean your own: how long from a customer's order to goods ready to ship. It's the same subtraction, ready date minus order date, but it helps to see the parts:
Production lead time = waiting to start + making + waiting to finish + packing
For kūlolo: a grocery order comes in Monday at noon, and the next free oven day is Tuesday (1 day waiting). It's grated, mixed and steamed on Tuesday, cools overnight, and is cut and packed on Wednesday morning. Order to ready is 2 days, of which only about 5 hours is work. That gap between total time and work time is what people mean by cycle time versus lead time, and it's usually where a promise to a customer can be made shorter. Planning a whole week around those times is in the production schedule example.
Where this stops working
The formula needs two dates for every order: when it was placed and when it arrived. In a small kitchen the first is often an email nobody saves and the second is a packing slip in a folder, and the log only exists if somebody copies both into a sheet every time. In a busy month nobody does, so the lead time in the reorder point is the one on the supplier's website, typed in once, years ago.
How TaroStack does it
In TaroStack the log keeps itself, because placing an order and receiving it are the two things you already do there. Suppliers carry their lead times and minimums. A purchase order records when it was placed; receiving it, on a phone at the back door, records when it arrived. And TaroStack checks each supplier's lead times against reality, what they promise against how long deliveries really take, which is the 4 days against 5.8 from this article, without anybody opening a spreadsheet.
That real number then goes where it matters. Reorder points are suggested from how stock actually moves, the reorder list shows how many days of cover you have at the rate you're really using things, and you get an alert when an item hits its reorder point, or when a purchase order is overdue, in the app or by email. On Standard, planning says what to order and by when, given each supplier's lead time.
The reorder list, suggested reorder points and alerts are on every plan, from $49 a month; planning is on Standard at $99. The first 30 days are free, and your suppliers and items import from a spreadsheet. If you'd like a hand setting up, ask, and we'll do it with you.