Lead Time

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The Lead Time

The Lead Time, is the time that elapses between the beginning and the end of a process..

Lead Time is measured on the production processes, but also administrative processes.

For example, it could be:

  • The time taken for the realization of a product on an assembly line.
  • The processing time for the recording of a customer order.

In general, the Lead Time identified in the business concern the crossing time of a set of processes. This can range from raw material procurement to the shipping department via sawing, machining, assembling, packaging.

  • Often the entire process combines production processes and administrative processes.
  • Between processes, there can be storage areas. The crossing time is also measured here. This measurement is done by applying Little’s Law.

lead-time-processus-global

How is defined Lean Time

Lead Time is set to a product or a business process. For example, for the manufacture of a finished product, it will leave the supply of the main component, until arrival at the shipping department of the finished product.

Lean time can be estimated or measured :

Estimated:

  • Process: compared to the routing time
  • Inventory: Use of Little’s law (LT = Inventory quantity / Average consumption)

Measured:

  • Timing
  • Followed a piece from start to exit

It is better to have a Lead Time measured. This is generally done when making a VSM. This allows to increase in parallel the sources of waste and avoid maximum database errors.

Interest of Lead Time

Lead Time is a key performance indicator of Lean : speed determines the performance of the organization.

More the crossing time is short :

  • The faster you put products or services available to the customer (Time-To-Market). This is a major strategic factor that can give among other the opportunity to take a competitive advantage.
  • The faster the costs incurred are covered (Time-To-Cash). This is a very important point for the cash of the company.

Other concepts related to Lead Time

Cumulative Lead Time :

It is the addition of different Lead Time :

  • Purchasing Lead Time
  • Production Lead Time
  • Distribution Lead Time

Door To Door :

This is the crossing time from arrival at the front door of the plant, until the exit.

Apparent depth of process:

This is the Lead Time seen by the customer (which is different from the global Lead Time, if for example, the customer is delivered from a warehouse of finished products)