What is Production Lead Time?
Production lead time is the time it takes for a product through its manufacturing process including sourcing of materials, assembly, and delivery. Shorter lead time in production makes production meet the customer’s satisfaction by timely delivery. Product complexity and planning efficiency in production logistics are the key determinants of the lead time in production logistics.
How to Calculate Production Lead Time?
The time to manufacture, procure and ship is summed up to calculate production lead time. Formula: Lead time = Manufacturing time + procurement time + shipping time / Lead time = Pre-processing time + Processing time + Post-processing time
It can also be found by subtracting the delivery date from the date of the order request. Formula: Lead time (LT) = Order Delivery Date – Order Request Date
The proposed approach is to measure manufacturing lead time within the lead time of product, thus ensuring an accurate measure of lead time.
Components of Production Lead Time:
Production lead time includes various steps like preprocessing, processing, waiting, storage, transportation, and inspection. Each of these phases plays a role in determining how long it takes to complete production, making lead time a crucial factor in supply chain efficiency.
Preprocessing Time:
Lead time in production includes the first phase, called preprocessing time, which is the time needed to prepare an order before manufacturing begins. It directly impacts on the total production lead time because the process can move faster or slower. Preprocessing time management is effective in optimising production logistics, and reducing delays.
Processing Time:
Manufacturing lead time is made up mainly of processing time, which is the time after an order is received before production starts. Total lead time for production is dependent on its efficiency and the customer satisfaction will be greatly affected. The streamlined processing reduces the lead time in the supply chain thereby resulting in faster product delivery.
Waiting Time:
Lead time of product involves a waiting time, or a delay between procurement and production. Managing this period is essential for ensuring the lead time in production is minimised. Waiting time is minimised to improve operations in production logistics and accelerate movement.
Storage Time:
Production lead time is used to refer to the time products are stored in warehouses or factories before dispatch and, therefore, the time products spend in warehouses or factories. The overall lead time for production is reduced by reducing storage duration, and inventory management is improved. Storage time handling is effective to improve the lead time in the supply chain.
Transportation Time:
A part of production logistics, transportation time is the time it takes for finished goods to be moved to customers from a factory or warehouse. Transportation optimization also reduces the total lead time of product and hence speeds up the delivery. The lead time for production is improved with efficient transportation management.
Inspection Time:
Verification or resolving discrepancies of the product quality is part of inspection time, and it affects the overall production lead time. A smooth inspection process means that the lead time for production is predictable. Good quality control improves production logistics and minimises the risk of delaying the product in delivery.
How to reduce Production Lead Time?
Sourcing locally, lowering complexity, improving processes, and choosing reliable suppliers should reduce lead time of product. Manufacturing lead time and the efficiency of production logistics are optimised by the strategies.
Reduce Product Complexity:
Reducing product complexity lowers the lead time in production by reducing components and streamline process. There are also better communication, stronger supplier relationships and further optimization of the manufacturing lead time through automation. Such strategies increase overall efficiency of production logistics.
Source Locally:
Locally sourcing raw materials reduces transportation distances and shortens the lead time of product. It also reduces dependency on international suppliers, improving lead time in the supply chain. If lead time for production is shortened, quality is maintained by minimising the delivery route.
Measure Lead Time:
It is important to measure the production lead time using clear formulas for production, inventory and customer processes. Monitoring variability in manufacturing lead time ensures stable and predictable production. Accurate measurement also identifies production logistics deficiencies that can be fixed for continuous improvement.
Select the Right Suppliers:
The lead time of product is reduced by choosing reliable and responsive suppliers because timely material delivery is ensured. The movement to consolidate suppliers while keeping diversity is minimising, and the lead time in production is enhanced. Smooth operation in production logistics is facilitated by strong supplier partnerships.
FAQs
1. What is Production Lead Time?
Production Lead Time is the time it takes to manufacture a product from sourcing materials to the final delivery. It impacts the lead time of production, customer satisfaction and efficiency in production logistics.
2. How to calculate Lead Time?
Manufacturing, procurement, and shipping durations or the difference between the order request date and delivery date is lead time in production. Accurate measurement of manufacturing lead time helps eliminate any malfunction in the supply chain.
3. What are the Components of Production Lead Time?
Preprocessing, processing, waiting, storage, transportation, and inspection are all components of production lead time. This is because each phase will affect the lead time for production, which has high importance in supply chain.
4. How to reduce Production Lead Time?
Sourcing locally, lowering complexity, improving processes, choosing reliable suppliers, and automating work should reduce lead time of product. Manufacturing lead time and the efficiency of production logistics are optimized by the strategies.
