What is Lead Time?
Lead Time
The time it takes from starting a task to finishing it.
What it means
Lead time is the time it takes from when you request something until you can receive it. The time from receiving an order to sending it out, the time from ordering materials to their arrival, and the time from starting to making everything are all lead times.
It includes not only actual working time but also waiting time. It takes half a day to assemble 50 pens, but if you have another order ahead of you, you'll have to wait for it to be completed.
At the pen factory
Saebom Trading's black ballpoint pen 50 pens was ordered on November 6th, but will not be shipped until November 9th. This is because the assembly team makes the blue ballpoint pen on the 7th, makes it on the 8th, and ships it out on the morning of the 9th. The lead time for this order is three days.
Why it matters
If you know the lead time, you can promise delivery and know when to order materials to avoid being late.
How this differs from Due date
Delivery date is “the date you plan to send it by” and lead time is “how long it actually takes.” If you promise a delivery date that is shorter than the lead time, it will be late.