Lead time

From Supply Chain Management Encyclopedia

Russian: Время выполнения

In general, lead time refers to the amount of time, from start to finish, required to complete a business process. In supply chain management, an important lead time is the amount of time necessary to complete an order cycle. This is the length of time between the receipt of an order from a buyer to the receipt of the order by the buyer. Some firms may define lead time as starting with buyer order transmittal. Each element of the order cycle is essentially a subcycle with its own lead time. For example, a lead time exists on a credit check. Lead time may or may not include production time. For example, for a make-to-stock manufacturer wherein products are mostly available for shipment upon order receipt, lead time would not include production time. In contrast, all or a part of production and engineering design work processes are included in assemble-to-order, make-to-order, and engineer-to-order manufacturer lead times.