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Lead Time

In: Business and Management

Submitted By fahim3a
Words 483
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• A lead time is the latency (delay) between the initiation and execution of a process. For example, the lead time between the placement of an order and delivery of 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. • The amount of time that elapses between when a process starts and when it is completed. Lead time is examined closely in manufacturing, supply chain management and project management, as companies want to reduce the amount of time it takes to deliver products to the market. In business, lead time minimization is normally preferred. • Lead time is the period between a customer's order and delivery of the final product. A small order of a pre-existing item may only have a few hours lead time, but a larger order of custom-made parts may have one of weeks, months or even longer. It all depends on a number of factors, from the time it takes to create the machinery to the speed of the delivery system. It may change according to seasons or holidays or overall demand for the product. • Manufacturers are always looking for ways to improve the lead time on their products. It can mean the difference between making the sale and watching a competitor sign the contract. If a company can deliver the product weeks ahead of the competition, it stands a better chance of receiving future orders. Because of this, management and labor teams routinely hold meetings to discuss timing improvements. • For a real world example of lead time in action, let's order a pizza. When you as the hungry customer decide on a preferred local pizza restaurant, you may have already considered such factors as speed and consistency. The selected restaurant must first receive your custom order, based on their pre-stocked ingredients. Once you've placed your order, the restaurant may tell…...

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