What is Lead Time? | How to Calculate Lead Time? | Explained with Example
Lead time is the amount of time that passes from the start of a process until its conclusion. Companies review lead time in manufacturing, supply chain management, and project management during pre-processing, processing, and post-processing stages.
By comparing results against benchmarks, they can determine where inefficiencies exist. Reducing lead time can streamline operations and improve productivity, increasing output and revenue.
By contrast, longer lead times negatively affect sales and manufacturing processes."
How do we calculate lead time? Lead time can be broken into several different components: pre-processing, processing, and post-processing. These may be defined differently, but the general formula to calculate lead time is:
"Lead Time = [Pre-processing Time + Processing Time + Post-processing Time]"
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CHAPTERS:
0:00 Introduction
0:17 What is lead time?
1:09 Calculating lead time
1:38 Pre-processing, processing and post processing time
2:40 Real world example
3:50 Conclusion
STUDY NOTES:
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