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Lead Times Get Longer, Inventory Piles Up

Lead Times Get Longer, Inventory Piles Up

Retailers are finding it difficult to match supply and demand. Shipping delays, port back-logs and other Covid-related supply-chain snafus are the norm. In response, chains including Target and Gap are building in more lead time from design to when the product hits shelves, but run the risk of consumers not wanting the goods by the time they show up.

DCA Insight:

The longer the lead time, the less accurate a retailer is going to be. When the order takes a year to 18 months to fulfill, merchants play a guessing game—and risk overstocking inventory that must be sold at a loss. Long lead times don’t accommodate shifts in taste, trends, and unexpected inflation.

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