I import from a supplier in China by sea: how do I work out the lead time to use for my reorder point?
Lead time is the whole wait from sending the order to your supplier until the goods are on your shelf, ready to sell: production or preparation at the supplier, then sea freight, then customs clearance, then delivery to your warehouse. Add those stages up from your past shipments and enter the total in days; the calculator multiplies it by your daily sales and adds your safety stock.
The usual mistake: counting only days at sea
Asked how long supply takes, most sellers remember the sailing time their freight forwarder quoted. But your stock is not only waiting for the ship. Before the goods sail, the supplier needs days to produce or assemble and pack them. After they reach port, they go through clearance, then need a day or more to reach you and be sorted and entered into your system. On every one of those days you are selling from the stock you have now.
Example: 25 days or 45?
You sell 12 units a day of an imported product and keep 120 units of safety stock. From past shipments: the supplier needs 15 days to produce, sailing takes 25 days, and clearance plus delivery to the warehouse takes 5.
Shipping days only, 25 days: demand during lead time 12 × 25 = 300, reorder point 300 + 120 = 420 units.
The full lead time, 15 + 25 + 5 = 45 days: demand during lead time 12 × 45 = 540, reorder point 540 + 120 = 660 units.
The gap is 240 units, or 20 days of sales.
Order at 420 and, over the real 45 days, you will sell 540 units, more than everything you had. The safety stock is used up entirely and you run out days before the container lands. Safety stock is meant for the unexpected delay, not for known stages you forgot to count.
Build the lead time from its stages
- Supplier time: from confirming the order and paying the deposit until the goods are ready to load. Take it from your past orders, not from the supplier's promise.
- Transit: from loading until arrival at port, as it actually went on your recent shipments.
- Customs clearance and delivery to your warehouse.
- Receiving, sorting and entering stock: goods are not sellable the moment the truck arrives.
- Add the stages up and enter the total as the lead time in the Inventory reorder-point calculator, with your average daily sales and safety stock.
When the time varies from shipment to shipment
Sea freight can vary between shipments, and clearance can drag in busy seasons. Put your usual lead time in the lead time field, and if you want cover for the worst you have seen, switch the calculator's safety stock option to derive it from maximums and enter your longest lead time. For example, with a usual 45 days, a longest of 60 days and highest daily sales of 20 units, the derived safety stock is 660 units. That rule is very cautious, so weigh it against cash and storage space.
When stock reaches the point, prepare the purchase order for your supplier with the Purchase-order generator. If you are weighing sea against air for a small order, work out the cartons' volumetric weight with the Volumetric shipping-weight calculator before asking for quotes.
Common questions
Should I count public holidays in China?
Yes, if they fall inside your order's window. A closed factory does not produce while you keep selling, so add those days to that order's lead time.
Does the calculator know shipping times from China?
No. It knows no shipping times and connects to no carrier. It calculates only with the days you type, so take them from your own experience.