Defining LeadTime: The First Step in Improving It

Leadtime is either a competitive advantage, or a competitive disadvantage to your manufacturing business. Most of you want to improve it, i.e., reduce it. That will also reduce your cost structure.

So how do you start?

First, you must have a clear definition of leadtime. It means different things to different people. To improve something, you must first define it.

I encourage you to think of your leadtime as your customer does: from when he decides he wants it to when it is actually in his hands exactly as ordered. Yes, that includes multiple steps over which you have no control, but it also includes many steps that are yours and yours alone.

Unreliable suppliers impact your leadtime to customers? That's your problem to fix, not your customers.

The first three steps to improving lead time are:

1) First, define it clearly

2) Second, measure it accurately. No excuses.

3) And third, break those measurements into clearly defined substeps in the process.

Lead time is not only a function of Operations. Internal order processing, customer responses to questions, outgoing shipping to the customer -- even if it is their truck.

Only by knowing what your current performance is: average, highs, lows, and reliability and predictability, can you begin to improve it. Otherwise, you're chasing rainbows.