MANAGEMENT

Detailed explanation-1: -In manufacturing, lead time often represents the time it takes to create a product and deliver it to a consumer. Lead time is calculated by adding any combination of the number of days to procure materials, manufacture goods, and deliver finished products.

Detailed explanation-2: -Delivery lead time is the period between when an order is placed and when that order is delivered. Delivery lead time tells a company how far in advance it needs to place an order for the delivery to arrive on time. It is one of the most important metrics for managing supply chains and inventory.

Detailed explanation-3: -The calculation for lead time is simple: the date of delivery minus the date when the order was placed.

Detailed explanation-4: -In supply chain management, lead time exclusively refers to the time it takes for a supplier company to have goods ready for delivery. For example, an apparel company may have a 7-day lead time for custom t-shirts. Typically, this measurement does not include shipping time.

Detailed explanation-5: -“Lead time” is a term borrowed from the manufacturing method known as Lean or Toyota Production System, where it is defined as the time elapsed between a customer placing an order and receiving the product ordered.