SAP IBP Worst Practice #7: Planning with Average Lead Times That Never Get Updated

🚨 STOP planning supply with average lead times!

You’re lying to your own planning system. And it’s costing you.

Here’s the scenario I have seen in number of implementations.

A supplier delivers in 5 days. Then 7. Then 6. Then suddenly… 💥 15 days.

But the planner sets lead time = 8 days in SAP IBP (or any APS) and calls it a day.

The system now believes supply is a metronome.

⏱️ Reality? Reality is a heartbeat — irregular, unpredictable, occasionally alarming.

The damage this “worst practice” creates:

📉 Stockouts when delays hit (because your safety stock never saw them coming)

📦 Bloated inventory when planners overcompensate “just in case”

🔄 Endless replanning, expediting, and manual overrides

⚠️ Eroded trust in the planning system — and once that’s gone, good luck getting it back

💸 Service levels drop. Working capital climbs. CFO asks questions.

Here’s the uncomfortable truth: 👇

Lead time is not a number. It’s a distribution. Min. Max. Mean. Variability. Supplier reliability over time. And this should be updated as the reality changes along with using a distribution.

The better practice isn’t sexy — but it works:

✅ Update lead times regularly from actual receipts (not what the buyer wrote in 2019)

✅ Plan with lead time variability, not just the average

✅ Align safety stock with real supplier behavior (or Re-order Point haha)

✅ Make it dynamic — review monthly, not “whenever someone complains”

Better algorithms won’t save you if your master data lies.

🎯Planning with data that reflects reality > planning with data that reflects wishful thinking.

👉 Question for the planners and supply chain leaders out there: When was the last time you actually reviewed lead time variability for your top suppliers — not the average, the variability?

Better algorithms can’t fix master data that lies — lead time accuracy is where reliable planning starts. Explore our Inventory Optimization Services or Contact Us for a supply planning health check.

Read: SAP IBP Worst Practices WP6 — The PLM Weighting Trap That Wrecks Your Forecast