Lead-time

A lead time is the between the initiation and execution of a process. For example, the lead time between the placement of an order and delivery of a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing and lean construction.

Lead time in publishing describes the amount of time that a journalist has between receiving a writing assignment and submitting the completed piece. Depending on the publication, lead times can be anything from a couple of hours to many months/years.

Lead time (when referring to a disease) is the length of time between detection of a disease through screening and the moment in time where it would have normally presented with symptoms and led to a diagnosis. An example of this is seen with breast cancer population screening, where women who are asymptomatic have a positive test result with mammography, whereas the underlying disease would have taken many more years to manifest.

A more conventional definition of lead time in the supply chain management realm is the time from the moment the customer places an order (the moment the supplier learns of the requirement) to the moment it is ready for delivery. In the absence of finished goods or intermediate (work in progress) inventory, it is the time it takes to actually manufacture the order without any inventory other than raw materials. The Chartered Institute of Procurement & Supply identifies "total lead time" as a combination of "internal lead time" (the time required for the buying organisation's internal processes to progress from identification of a need to the issue of a purchase order) and "external lead time" (the time required for the supplying organisation's processes, including any development required, manufacture, despatch and delivery).

In the manufacturing environment, lead time has the same definition as that of Supply Chain Management, but it includes the time required to ship the parts from the supplier. The shipping time is included because the manufacturing company needs to know when the parts will be available for material requirements planning. It is also possible for lead time to include the time it takes for a company to process and have the part ready for manufacturing once it has been received. The time it takes a company to unload a product from a truck, inspect it, and move it into storage is non-trivial. With tight manufacturing constraints or when a company is using Just In Time manufacturing it is important for supply chain to know how long their own internal processes take.

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Wikipedia