ERP Term
"Lead Time "

Lead time is the total time between ordering materials and having them delivered and available for use. Lead time can also be the overall time between the beginning of an item's production and its completion.

Lead time is the time that elapses between ordering materials and having them delivered and available for use. It can also refer to the total time between the start of production of an item and its completion. In either case, lead time is essential in manufacturing and supply chain management, as it can significantly impact costs and efficiency.  

There are several ways to reduce lead time and improve efficiency. One common approach is Just-In-Time (JIT) inventory management, which only orders materials as needed rather than stockpiling them. This can minimize storage costs and reduce the risk of material wastage. JIT production is another popular method for reducing lead time, wherein items are only produced once an order has been received rather than being produced in advance and stored. This helps to avoid overproduction, which can tie up valuable resources and lead to higher costs.  

Lead time reduction is a key goal for many businesses, as it can significantly improve cost, quality, and customer satisfaction. Companies can improve their responsiveness to customers and better meet their needs by reducing the time required to complete an order. In addition, shorter lead times can help businesses minimize inventory costs and stock levels and improve production planning and coordination.