lead-time

A lead time is the period of time between the initiation of any process of production and the completion of that process. For example, the lead time for ordering a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing.

Lead time in Journalism

Lead time in publishing describes the amount of time that a journalist has between receiving a writing assignment, and submitting the completed piece. Depending on the publication, lead times can be anything from a couple of hours to many months.

Lead time in Supply Chain Management

A more conventional definition of Lead Time in the Supply Chain Management realms is the time from the moment the customer places an order to the moment it is received by the customer. In the absence of finished goods or intermediate (Work In Progress) inventory--it is the time it takes to actually manufacture the order without any inventory other than raw material

Lead time in Manufacturing

In the manufacturing environment, Lead Time has the same definition as that of Supply Chain Management, but it includes the time required to ship the product to the purchaser. The shipping time is included because the manufacturing company needs to know when the parts will be available for Material requirements planning. It is also possible for lead time to include the time it takes for a company to process and have the part ready for manufacturing once it has been received. The time it takes a company to unload a product from a truck, inspect it, and move it into storage is non-trivial. With tight manufacturing constraints or when a company is using Just In Time manufacturing it is important for supply chain to know how long their own internal processes take.

Example

Company A needs a part that can be manufactured in two days once Company B has received an order. It takes three days for company A to receive the part once shipped, and one additional day before the part is ready to go into manufacturing.

• If Company A's Supply Chain calls Company B they will be quoted a lead time of 2 days for the part.
• If Company A's Manufacturing division asks the Supply Chain division what the lead time is, they will be quoted 5 days since shipping will be included.
• If a line worker asks the Manufacturing Division boss what the lead time is before the part is ready to be used, it will be 6 days because setup time will be included.

In Semiconductor Industry

In very complex manufacturing environment, like the manufacture of microprocessors, a usual Lead Time may be between 5-7 weeks. This is due to the sequence of operations, where there are multiple very similar steps repeated, and none can be skipped. If a manufacture of a CPU requires 35 exposure masks, that translates approximately into 35 x ( photoresist coating, exposure, development, main process step (like etching, diffusion, metal filling), photoresist stripping and/or polishing + other possible steps ) plus additional steps before and after all processing. There are wait times not only associated with scheduling a product into production, since the product lines are busy, but also a beginning run of production goes to scrap (plus tool change and alignment takes time), and there are possible wait times of batches being processed during the production. (Not all machinery works at the same speed, or requires maintenance steps, tool change, plus there is the time it takes to physically transport the silicon wafers from one processing machinery to another in small transport batches.)

Lead time in Project Management

In Project Management Lead Time is the time it takes to complete a task or a set of interdependent tasks. The Lead Time of the entire project would be the overall duration of the critical path for the project.

Lead time is also the saved time by starting an activity before its predecessor is completed.

See also

• Time limit
• Safety stock
• Latency (engineering)