Lead time is a parameter that characterizes a supply chain at different levels.
It is also called crossing time (e.g. of an order) or "response time".
Often lead time means the time needed by a company to meet a customer’s request (or customer lead time). The shorter the time, the faster and more flexible the company is in satisfying the customer.
You can talk about lead time referring to the reaction time of a company compared to the fact that the customer:
- request a new product: time to market
- place an order for an existing product: time to order.
Lead Time is a fundamental concept of Lean and corresponds to the time needed to produce a product; from the entry of the raw material up to the shipment of the finished product.