Lead Time
Candlefocus EditorDetermining lead time is an essential step for companies to ensure the manufacturing process runs smoothly, and it typically involves adding the number of days to procure materials, manufacture goods, and deliver finished products. Factors like the availability of raw materials, transportation breakdowns, human errors, natural disasters, and labor shortages can all have an impact on the lead time associated with each item.
The procurement stage of the lead time is often referred to as the "supply chain time," and it includes the time it takes to order materials and have them delivered to the plant. Generally, the more items a company orders in bulk, the lower the cost of those items and the faster they are able to deliver them to the manufacturing facility. Items may be sourced from either domestic or international suppliers, both of which require different lead times.
The manufacturing stage of lead time takes into account the setup time, along with the labor, materials, and machines needed to complete the job. Companies that are able to keep their production machines running at optimal levels and hire reliable workers to handle various aspects of the process are usually better equipped to reduce their overall lead time.
The third and final stage of lead time involves the actual delivery of the finished product to the customer. This includes handling packaging, labeling, and shipping the item. Companies must weigh the costs and benefits of different delivery methods, as some may provide faster turnaround times without sacrificing the quality of the product. Additionally, companies can improve lead times by implementing automated stock replenishment and just-in-time (JIT) strategies to ensure deliveries are made when and where they are needed.
Lead time is a critical part of successful production for businesses, and managing lead times as accurately as possible can ensure a reliable workflow and improved customer satisfaction. By understanding how long it takes to complete all stages of a production process and managing various aspects of the process accordingly, companies can achieve significant reductions in their lead times.