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Jun 28, 2010

Lead time

Value stream mapping is commonly used in organizations looking to reduce the lead time of their process – so what is lead time.

Lead time is the period of time between the initiation of any process and the completion of that process.

So for example if an order is received for a Widget on the 1st of January and the item is shipped to the customer on the 31st of January – The lead time could be said to be 31 days.

Lead time is important to many organizations as it often has associations of cost – for example – buffer stock is often held to counteract long leadtimes (buffer stock has an associated cost of extra material and associated resources e.g. storage).