Lead time is the total amount of time needed to complete an order from the time it is placed until it is delivered and prepared for sale or use. Lead time in supply chain and inventory management encompasses a number of elements, including order processing, production time, shipping, and receiving procedures. It is a crucial indicator that has a direct impact on customer service standards and inventory planning. Inventory optimization requires precise measurement and lead time reduction. Companies can lower safety stock levels, respond to demand fluctuations more quickly, and lower the risk of stockouts or overstocking when lead times are shorter and more predictable. Across the supply chain, responsiveness and agility are also improved by efficient lead time management.
