Use the free tool to calculate the lead time or deliverydate that it will be a certain number of days, weeks, and months from today or a specific date.
Lead time is the time it takes for a product or service to be delivered from the moment it is ordered or requested. It is the duration between the initiation of a process and its completion, including production, processing, and delivery. Lead time is a critical metric in various industries, including manufacturing, construction, and logistics, as it affects customer satisfaction, inventory management, and supply chain efficiency.
To calculate lead time, you need to identify the start and end points of the process, and then measure the time it takes to complete each stage. The lead time calculation formula is:
Lead Time = Total Time from Order to Delivery
For example, if a process consists of three stages with durations of T1, T2, and T3, then the lead time would be:
Lead Time = T1 + T2 + T3
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The general formula to calculate lead time is:
Lead Time=Order Placement Date−Order Fulfillment Date
For manufacturing, it can be more detailed:
Lead Time=Order Processing Time+Production Time+Delivery Time
The number of steps, depends on the complexity of each business:
Lead Time = Order Receipt Time + Production Time + Inspection Time + Packaging Time + Shipping Time + Delivery Time
A. Manufacturing
Suppose a manufacturing company produces a product that goes through the following stages:
The lead time for this product would be:
Lead Time = 2 (Order Processing) + 5 (Raw Material Procurement) + 10 (Production) + 2 (Quality Inspection) + 3 (Shipping) = 22 days
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B. Construction
A construction firm orders steel beams on March 1st, and the supplier delivers them on March 15th. The installation process takes 10 days, and the final inspection takes 3 days.
Total Lead Time = 15+10+3= 28 days, or 4 weeks.