# Safety Lead Time from Supplier Variability Calculator > Source: https://netray.co/tools/mrp-safety-lead-time-from-supplier-variability-calculator > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer Set safety lead time from the standard deviation of supplier lead time and a target service level, then see the carrying cost of that buffer. ## Category supply-chain ## Audience - Material planner - Buyer - Supply chain analyst ## Tool **Kind:** calculator **Currency:** $ **Inputs:** #### Average supplier lead time **Key:** mean_lt **Type:** number **Default:** 28 **Min:** 0 **Step:** 1 **Unit:** days #### Lead time standard deviation **Key:** sd_lt **Type:** number **Default:** 6 **Min:** 0 **Step:** 0.5 **Unit:** days **Help:** Measured from actual order to receipt history. #### Target on time probability **Key:** service **Type:** select **Default:** 0.95 **Options:** ##### 90% **Value:** 0.9 ##### 95% **Value:** 0.95 ##### 97.5% **Value:** 0.975 ##### 99% **Value:** 0.99 #### Average daily demand **Key:** daily_demand **Type:** number **Default:** 40 **Min:** 0 **Step:** 1 **Unit:** units #### Unit cost **Key:** unit_cost **Type:** number **Default:** 22 **Min:** 0 **Step:** 0.5 **Unit:** $ #### Annual carrying cost rate **Key:** carry **Type:** number **Default:** 20 **Min:** 0 **Max:** 100 **Step:** 1 **Unit:** % **Outputs:** #### Service factor (z) **Key:** z **Expr:** normsinv(service) **Format:** decimal #### Safety lead time **Key:** slt **Expr:** ceil(z * sd_lt) **Format:** days **Primary:** true **Description:** Buffer in days added to the planned lead time. #### Planned lead time to use **Key:** planned_lt **Expr:** mean_lt + slt **Format:** days **Primary:** true #### Average extra stock from early receipts **Key:** extra_units **Expr:** daily_demand * slt **Format:** integer #### Value of that extra stock **Key:** extra_value **Expr:** extra_units * unit_cost **Format:** currency #### Annual cost of the buffer **Key:** carry_cost **Expr:** extra_value * carry / 100 **Format:** currency **Chart:** #### Safety lead time vs supplier variability **Type:** line **X:** sd_lt **From:** 0 **To:** 20 **Steps:** 20 **Series:** - slt **Disclaimer:** Assumes lead times are roughly normally distributed and independent between orders. Heavily skewed or clustered late deliveries need a different approach. ## Content **Intro:** Safety lead time tells MRP to plan receipt earlier than the need date. This calculator sizes it from how much your supplier's lead time actually varies, rather than a round number someone typed years ago. **Sections:** #### How to use it **Body:** Pull receipt history for the item and compute the average and standard deviation of lead time from order date to receipt date. Enter them with your target on time probability, daily demand, unit cost and carrying rate. The calculator returns the buffer in days, the planned lead time to load into the item, and the annual cost of holding early material. **Bullets:** - Measure variability from receipts, not from supplier quotes. - Use a service level that reflects the cost of a stockout. - Round up to whole days, or whole workdays. #### The method **Body:** If lead time is approximately normal, the chance a receipt arrives within mean plus z standard deviations equals the service level. So safety lead time equals z times the standard deviation of lead time. Safety lead time protects against late delivery only, not against demand variation, which is the job of safety stock. Using both on the same item without thought double buffers the same risk. #### Worked example **Body:** A supplier averages 28 days with a standard deviation of 6 days. At 95 percent, z is about 1.645, so safety lead time is 10 days and the planned lead time is 38 days. At 40 units a day that is 400 extra units on average, worth 8,800 dollars, costing about 1,760 dollars a year at 20 percent. The chart shows how fast the buffer grows as variability rises, which is a strong argument for working with suppliers on consistency. #### Common mistakes **Body:** Applying one blanket safety lead time to every item hides where the real variability sits. Another mistake is calculating from promised dates instead of actual receipts. Also remember that safety lead time moves all planned receipts earlier, so supply appears sooner in projected balances, which can mask true shortages if used carelessly. **Cta:** Netray can pull receipt history from your ERP, compute variability per supplier and item, and flag where the configured safety time is far from the data. **Faq:** #### Safety lead time or safety stock? **Answer:** Use safety lead time when the risk is late supply and safety stock when the risk is demand variation. Many items face both. Compare the carrying cost of each buffer before choosing. #### How much history do I need? **Answer:** At least 10 to 20 receipts per item or supplier group gives a usable standard deviation. With fewer receipts, group similar items from the same supplier. #### What if my supplier is early sometimes? **Answer:** Early receipts count as negative variation. Standard deviation captures both directions, but if early receipts are rare, a one sided percentile of late days may be a better measure. #### Does this work for in-house production? **Answer:** Yes. Use the variability of actual work order lead time instead of supplier lead time. Queue and scrap variation tend to dominate, so measure real completions. ## Search terms safety lead time calculator, supplier lead time variability, safety time mrp, lead time standard deviation buffer, safety lead time vs safety stock, planned lead time calculation, mrp safety time setting, supplier on time delivery buffer --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json