Lead Time

Manufacturing lead time can be decomposed into five major components. Order processing time covers the administrative steps from order receipt to production release — entering the order, checking credit, confirming availability, scheduling production, and issuing work orders. Material lead time is the time to procure raw materials and components, including supplier lead times and incoming inspection. Queue time is the time an order spends waiting for a machine or workstation to become available — in most factories, this is the largest component of total lead time. Processing time is the actual value-adding time when the product is being manufactured, assembled, or finished. Post-production time includes final inspection, packaging, labeling, and shipping. In a typical batch-and-queue manufacturing environment, processing time accounts for only 1–5% of total lead time. The remaining 95–99% is queue time, material waiting time, and administrative delays. This ratio — called process cycle efficiency — highlights the enormous opportunity for lead time reduction through better scheduling and flow.

Since queue time dominates manufacturing lead time, the most effective reduction strategies target queues. Reduce batch sizes: smaller batches move through the factory faster because they spend less time waiting for an entire batch to be processed before moving to the next station. Implement cellular manufacturing: arranging equipment into product-focused cells eliminates inter-department transportation and dramatically reduces queue time. Overlapping operations: start downstream operations before the entire upstream batch is complete (also called lot splitting or transfer batches). Reduce changeover time: SMED techniques enable smaller economic batch quantities, which in turn reduce queue time. Pull systems: kanban prevents WIP accumulation by limiting the work released to the floor. Improve scheduling: a well-leveled schedule (heijunka) prevents demand spikes that create queues. Each of these strategies can be implemented incrementally, and the cumulative effect is substantial — many lean transformations achieve 50–80% lead time reductions within the first year.

Lead time is both an input to and an output of production scheduling. As an input, the scheduler uses lead time estimates to determine when production must start to meet delivery dates — working backward from the due date. As an output, the quality of the schedule directly determines actual lead time: a poorly leveled schedule creates bottleneck queues that inflate lead time, while a well-leveled schedule maintains smooth flow and short queues. LinePlanner helps manage this relationship by providing a visual calendar view of production orders across all lines, making it immediately apparent when orders are bunching at certain workstations or when capacity is unevenly loaded. The ability to drag and drop orders between days and shifts allows planners to level the load and minimize queue formation. Real-time status updates show actual progress against the schedule, enabling early warning when lead times are at risk of exceeding customer commitments.