Prod. lead time?

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Production lead time is the amount of time between placing an order and receiving the order from the customer. It includes a number of different components of the manufacturing process and can be expected from a manufacturer with established order management systems in place. When customers call a manufacturer to place an order, the manufacturer must provide an estimate of the delivery time so the customer knows when to expect the product. Such quotes may also be listed in catalogs to provide customers with an estimate of how long it will take to receive the items they order.

The first step in the production lead time is order placement, followed by order processing. This can represent a considerable delay if a business has a large number of orders to process or limited staff for order entry and scheduling. Once registered in the system, the order moves into the preparation time, with the staff planning the actual production process of the item.

The items to be manufactured are placed in a queue, where they can wait for varying times depending on the availability of equipment, the complexity of the order and the size of the order. Generic orders tend to move faster than custom-to-order products because no special equipment adjustments are required. When an order for production arrives, the order moves into setup time, where the equipment is readied for production, and then into run time, which is the time it actually spends on the production line in progress.

Once produced, the item still needs to be inspected for quality control before being packaged. Packaged products are ready for shipment to the final consumer or to a warehouse where stock is stored. Shipping can take days or weeks, depending on your factory and customer locations and the type of shipping method you choose. Production lead time estimates can be hampered by the time products spend waiting for shipment, as well as other delays resulting from understaffing or overordering causing backups at various stages of the process.

Manufacturers keep records of previous orders so that when a new order arrives, they can make a reasonable estimate of delivery times. Computer software used for order administration often calculates delivery times when an order is placed. Companies can provide some leeway, by providing a window rather than a solid quote for a delivery date. If an order exceeds the stated delivery times, the company may implement an indemnification policy, such as free shipping or a discounted price for the customer. Companies want to avoid doing this, and so are meticulous about estimating production times as accurately as possible.

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