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Lead Time

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LT

Also called: lead time · Lead time · Lead Time

Definition

Total time from the time of demand to delivery.

In detail

Delivery lead time refers to the total time from customer order to receipt of product or service, covering all stages such as order processing, production, and transportation. It measures the responsiveness of the entire value stream and is a key performance indicator in lean management. Unlike takt time (production pace) and cycle time (single cycle), delivery lead time focuses on end-to-end duration. Shortening delivery lead time improves customer satisfaction and reduces inventory; its output is typically timeline analysis and improvement actions.

Example in practice

When customers complain about slow order delivery, the delivery cycle can be analyzed. For example, an e-commerce company finds that the average time from order to receipt is 7 days. Through value stream mapping, it discovers that order processing takes 2 days, warehouse picking 1 day, and transportation 3 days. It then optimizes the order system, processes in parallel, and switches to express delivery, ultimately reducing the delivery cycle to 3 days and improving customer satisfaction.