what is lead time 
lead time is the amount of time that passes from the start of a process until its conclusion companies review lead time in manufacturing supply chain management and project management during pre processing processing and post processing stages by comparing results against established benchmarks they can determine where inefficiencies exist reducing lead time can streamline operations and improve productivity increasing output and revenue by contrast longer lead times negatively affect sales and manufacturing processes investopedia jessica olahunderstanding lead timeproduction processes and inventory management can affect lead time in regards to production building all elements of a finished product onsite may take longer than completing some items offsite transportation issues can delay delivery of necessary parts halting or slowing production and reducing output and return on investment roi using locally sourced parts and labor can shorten lead time and speed production and offsite sub assemblies can save additional time reducing production time allows companies to increase production during periods of high demand quicker production can increase sales customer satisfaction and the company s bottom line efficient inventory management is necessary to maintain production schedules and meet consumer demand stockouts occur when inventory or stock is unavailable preventing the fulfillment of a customer s order or product assembly production stops if an organization underestimates the amount of stock needed or fails to place a replenishment order and suppliers cannot replenish materials immediately this can be costly for a company s bottom line one solution is to use a vendor managed inventory vmi program which provides automated stock replenishment these programs often come from an off site supplier using just in time jit inventory management for ordering and delivering components based on usage a great example of lead time is the time needed to process a passport if you re planning on traveling internationally prepare to get your passport renewed months in advance of your trip the government estimates the lead time for routine passport processing as six to eight weeks for applications received on or after december 18 2023 1