📉 Measuring Risk: Understanding Lead Time Deviation
The Lead Time Deviation is a powerful metric calculated by Optiply that measures the unreliability of a supplier's delivery schedule. It indicates the expected number of days that a purchase order is likely to arrive late compared to your agreed-upon delivery time (Expected Lead Time).
Why the Deviation is Calculated
Optiply calculates this deviation to build an accurate safety buffer for your stock. You must order enough extra safety stock to cover the period of time your supplier is typically late.
Low Deviation: Indicates the supplier is highly reliable. Safety stock can be minimal.
High Deviation: Indicates the supplier is unreliable. Optiply must increase the safety stock buffer to cover the extended, unplanned delay, protecting you from stockouts.
How Optiply Calculates Deviation
The deviation is calculated by analysing your historical purchase orders:
Optiply looks at all closed purchase orders from that supplier.
It compares the Expected Lead Time (the time you entered) against the Actual Delivery Time (the date the order was processed in your warehouse).
The calculation determines the average and variability of the lateness, providing a statistical measure of risk—the deviation.
Locating the Lead Time Deviation
This crucial reliability metric can be found on the Suppliers Page:
Navigate to Suppliers: Go to the Suppliers page in Optiply.
Select the Supplier: Click on the specific supplier you are reviewing.
Find the Metric: Navigate to the Information tab and locate the Additional Info section.
The Lead Time Deviation will be displayed as a percentage.
❓ Frequently Asked Questions (FAQs)
What is the difference between Measured Delivery Time and Lead Time Deviation?
Measured Delivery Time is the simple average time it takes for an order to arrive (e.g., 8 days). Lead Time Deviation is the measure of the variability or risk around that average (e.g., the order might be 2 days late 90% of the time). Optiply uses both to calculate safety stock.
If the Lead Time Deviation is 0, what does that mean?
A deviation of 0 days means the supplier is perfectly consistent and delivers exactly on the expected lead time. This is rare but indicates the lowest possible risk, allowing Optiply to use a minimal safety stock buffer for delivery variance.
Does a positive number for deviation mean the supplier is often late?
Yes. Since the deviation is calculated in relation to the set delivery time, a positive number indicates that, statistically, you should expect the order to arrive later than promised.
If I manually override my Expected Lead Time, does the deviation change?
No. The deviation is calculated based on historical deliveries, not your manual input. If you update the Expected Lead Time, the deviation will still reflect the historical variability of the supplier's actual delivery performance.