Lead Time

The Lead Time indicates the TIME from the moment your CUSTOMER makes an ORDER to the moment the customer has fully paid. It is measured in Minutes (e-commerce) or even Hours with the letters “LT”.

We use LEAD TIME to compute financial throughput performance.

LEAD TIME is used in conventional business to indicate the period between order and delivery. We could refer to the latter as “ORDER LEAD TIME” signifying the amount of TIME an order has to be placed ahead of when its DELIVERY is needed.

Lead Time = Cycle Time * WIP

Or,

Lead Time = WIP/Throughput

 

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