What do lead times really mean?

August 02, 2016

A Quick lead time is one of the best unique selling points a manufacturing company can offer its customers. In the world we live in, projects and processes take days rather than weeks, and so the ability to forecast your manufacturing capacity has never been more important. But what exactly is a lead time and what factors need to be taken into account?

A lead time is the time period between the placement of an order and the arrival of the completed order to the customer. Having the shortest lead time possible is a competitive advantage and gives you the edge over your competitors, but what are the key factors when determining an accurate lead time.

Labour hours vs. Machine run time

 This is a common issue that is often misinterpreted. It is quite often assumed that if we have 38 hours’ worth of labour per employee a week, then we will have 38 hours’ worth of capacity with a machine. Unfortunately other factors need to be taken into account for example preparation or unexpected occurrences. These take time away from the machinist even if it is 1 hour per day, resulting in a maximum of 33 hours labour per week.

Machine servicing

The build standard of machines is constantly on the rise as technology continues to advanced and building methods continue to improve. Unfortunately, most machines still require servicing or calibration every so often. Down time on machines is always going to have an effect on turnaround as you will have lost those machines manufacturing capabilities for a certain amount of time.

Material availability

Unfortunately events happen such as having the wrong material sent, or a delivery not turning up on time. In either case, any jobs that require those materials will be affected and are most likely not going to be started on time. Your schedule should immediately reflect this in order to give you the ability to react to the problem.

Sometimes these things are out of your control, the key is having management processes in place that help eliminate any potential pitfalls you may encounter to be able to offer your customer the best lead time possible.