Also called order to delivery, quoted lead time, procurement lead time
What is lead time?
How long the customer waits, from placing the order to having the goods.
What else it is called
- Other names
- order to delivery, quoted lead time, procurement lead time
- In French
- délai de livraison
Related entries
Understanding lead time
The whole elapsed time a customer experiences: order entry, credit and engineering checks, material procurement, queueing, production, inspection, packing and transit. Plants usually quote and manage only the production piece, which is why quoted lead times are met on the floor and missed at the customer.
The arithmetic that matters is Little’s law: lead time equals the work in the system divided by the rate you complete it. That means releasing more work into a plant to make it go faster reliably makes it slower, which is counter-intuitive enough that most plants do it under pressure anyway.
Shortening it is almost never about working faster. It is about removing the waiting, which means smaller batches, shorter changeovers, and not releasing jobs before the plant can start them.
In practice
Take one recent order and write down the date at every step from order entry to shipment. The working time usually turns out to be a small fraction of the total, and the gaps are where the lead time actually is.
Frequently asked
Why is our quoted lead time met on the floor but missed by the customer?
Because the quote covers production and the customer experiences everything: order entry, engineering, material arrival, queueing before the job starts, inspection and transit. Measure the whole span and the gap usually explains itself.