Lead Time
Lead time measures the total duration from order receipt to delivery -- including all waiting, storage, and transport times. It determines delivery capability.
Lead time is the timespan a product or order needs from receipt to completion. It encompasses not only the actual processing time but also all waiting times, storage times, transport times, and inspection times.
In most production processes, actual value creation (processing time) accounts for only 5-10% of total lead time. The rest is waste in the form of waiting, storing, and transporting.
Lead time is critical for competitiveness: Shorter lead times mean faster delivery, lower inventory levels, reduced capital commitment, and greater flexibility in responding to customer requests.
Little's Law describes the relationship: Lead Time = Work in Process / Throughput. To reduce lead time, either WIP must decrease or throughput must increase.
Formula
Lead Time = Processing Time + Waiting Time + Transport Time + Storage Time + Inspection Time
Practical Example
A metal part has a pure processing time of 45 minutes (milling, drilling, deburring). But the lead time is 12 days -- because the part sits on shelves for hours to days between stations. By introducing one-piece flow, lead time drops to 2 days.
How Leanshift Helps
Leanshift automatically calculates lead time from the recorded process steps and shows the ratio of value creation to waste. This allows you to identify the biggest time wasters.
Frequently Asked Questions
How can you reduce lead time?
The most effective levers: Eliminate storage times (one-piece flow), reduce batch sizes, reduce setup times (SMED), eliminate bottlenecks, and remove unnecessary transport routes.
What is Little's Law?
Little's Law states: Lead Time = Work in Process (WIP) / Throughput. If you reduce WIP in production, lead time automatically decreases -- at the same throughput.
What is the difference between lead time and delivery time?
Lead time measures internal production time. Delivery time additionally includes shipping and possibly the wait until order release.
Related Terms
Takt Time
Takt time is the pace at which a product must be completed to meet customer demand. It is determined by the market, not by the machine.
Cycle Time
Cycle time measures how long a single process step actually takes -- from start to finished result. It is the foundation of every process analysis.
Value Stream Mapping (VSM)
Value Stream Mapping visualizes the entire material and information flow of a product -- from raw material to customer. It makes waste and bottlenecks visible at a glance.