Lead time is how long it takes since you place the order until the products are ready to ship. Double-check this with the supplier before placing the order, in case they change the production schedule temporarily. For suppliers, the norm is that nobody clarifies lead time by default in PI, which can bring troubles.
When you’re tight on time, and cannot afford any production delays, don’t just orally tell your supplier about your lead time requirements. The wise choice would be putting your agreements into the PI. Breach clauses are necessary to specify the compensation amount if they failed to complete production before the time point as promised. You would not get a dime for delays if you forgot to put down detailed compensation clauses, only lead time instead.
Then let’s talk about the delivery time, it’s the amount of time that it takes for goods that have been bought to arrive at the place where you are wanted. If you need urgent shipping to arrive before a certain date, you need to sign an on-time delivery agreement with the supplier or the shipping company (if you use your own freight forwarder).
In real business, the primary purpose of signing the on-time delivery agreement is not to get paid if a delay occurs, but to urge the supplier to meet the deadline. The on-time delivery agreement only works if you’re able to hold suppliers accountable, otherwise, it’s just an empty promise. Because it’s difficult to sue them in China, especially when your order is small.
So here’s my advice, for old suppliers you have worked with before, you can restrict them by stopping future cooperations which is a big loss to him if he delays and rejects compensation duty. For new suppliers, it’s wise to hold some payment balance until you get the products in time, even if it’s not easy to persuade suppliers to accept this kind of payment terms.