How to Set Up Lead Times
Manage your lead times for Products, Purchasing, Manufacturing and Sales
How Odoo Handles Lead Times
While running your business you must be the leading expert on your products and/or services, processes and your supply chain in general.
In order to effectively manage your demand, it is essential to know the forecast of how long it will take to make and buy your products, as well as how long it will take to fulfill the orders of your customers.
The more realistic these dates are, the greater the probability of reaching deadlines agreen on with the client at the start of the process.
Thanks to Odoo you will only need to configure the following three lead times once and, in just one click, you will have the following calculated instantly:
- The delivery date;
- Date to start your production;
- The date to buy components;
And don’t worry if you need to change these dates for any reason because you will be able to make adjustments at any time.Learn More About Odoo and Manufacturing
Lead Time Quick Reference Guide
Let’s see how we can define these concepts and how Odoo will use them to calculate these essential dates.
Below we describe the time range that belongs to each lead time and where you can set them up.
You can find fields here:
- On the inventory tab:
- On the purchase tab:
These dates will be useful to manage and schedule your sales, purchases and manufacturing processes quickly and easily, ensuring on-time delivery of your goods.
Customer Lead Time
It is worth mentioning that this date does not depend on the quantity sold, so the expected delivery date will be the same whether you sell 1 or 10,000 units.
If you have an order with more than one product, the expected delivery date will depend on the shipping policy you set:
- If you choose “As soon as possible”, Odoo will fetch the lowest customer LT among the products added to that order.
- If “When all products are ready” is set, Odoo will fetch the highest.
Expected delivery date = Sale order creation day + Product’s customer LT days.
However, you can always set a specific date if you wish and Odoo will use it instead.
If the manually introduced date is before the expected date, a warning will be displayed saying that it may not be possible to meet that date and you will notice an impact on DO’s deadline.
This change will impact MO’s scheduled date if this one is not created yet. Otherwise, it will not affect it.
Also, if for any reason, the product’s customer lead time is not configured, the expected delivery date will be the exact day of quotation creation.View Real Life Odoo Case Study
Manufacturing Lead Time and Purchase Lead Time
When handling a manufacturing product with some components you’ll need to buy, it’s extremely important to take into consideration manufacturing and purchase lead times.
Odoo will apply a backwards process to get the precise dates and schedule the corresponding manufacturing and purchase orders.
Starting from DO’s scheduled date and going back as many days as defined on the product’s manufacturing LT, Odoo will get the MO’s scheduled date which will mark the start of your manufacturing process.
However, in order for this to happen, it is essential to have all the components on hand. As a result, Odoo will count backwards from the manufacturing order’s scheduled date as many days as specified on the product’s purchase lead time. With all of this taken into consideration, you’ll have the realistic deadline to confirm the purchase order.
Note that Odoo employs a just-in-time (JIT) methodology and, therefore, it may happen that the system does not create the RFQs right away. Instead, it will do so (in the case of automatic replenishment) on the last day that allows it to confirm the purchase and receive the goods on the same day that production will begin.
Nevertheless, real life is not as linear as described above and to handle unforeseen events you can use the following Odoo tools.
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Odoo’s Helpful Lead Time Tools
Days to Purchase
To avoid delays in PO’s confirmation process you can configure the number of days you take on average to confirm your purchase orders. In this way, Odoo will create the purchase orders taking these fixed days into account.
You can find this field in Inventory Settings as demonstrated in the image below.
Security Lead Times
You can plan ahead with the help of Security Lead Times to prevent any kind of delays.
The time range that each lead time corresponds to and the locations where you can configure them are outlined below.
These lead times will be applied in every order. Details that will differ in each case are:
- The two existent dates on the DO will differ. The deadline will match the day obtained with the customer lead time specified on the product or will match the manually introduced day. The scheduled date, however, will be as many days earlier as the defined security lead time for sales.
- Then, starting from the DO scheduled date, and going back as many days as the specified on security lead time for manufacturing in addition to the product’s manufacturing lead time, you will have the scheduled date to start your manufacturing order (MO Scheduled Date).
- Picking up on MO’s scheduled date and going back as many days as defined on the security lead time for purchases, you will have the date you should receive your products. Going back the number of the product’s purchase lead days you will finally have the order deadline of your PO.
Let Odoo Boost Your Business
As you can see, Odoo enables you to swiftly and easily organize your commitments and prevent any form of delay, so you’ll never be late delivering to a customer again. If you need help with this or any other feature of Odoo, don’t hesitate to contact us to talk to an Odoo expert.Contact Us