Definition

Lead time is the time it takes for a customer to receive a product after they order it. This KPI measures the efficiency of the entire supply chain or business.

What factors can impact my lead time?

• Review period: how often you order
• IT confirmation delay / Purchase Order delays
• Production lead time
• Picking/Packing time in the warehouse or factory
• Waiting time before shipping
• Transportation time / transit time
• Customs
• Delivery time

Formula

Lead time = order process time + production lead time + delivery lead time