Determine the total lead time

Calculate the total lead time and fulfill orders quickly and efficiently with this free lead time calculator.

Manufacturing time

Procurement time

Shipping time

Lead Time (in days)

What is lead time?

Lead time, in general terms, is the amount of time from the start of the process to the end. In supply chain context, lead time refers to the total time from placing the purchase order or manufacturing the product to the time the product is received.

What you need to know about lead time?

Lead time depends on a number of factors like shipping time, material or labor shortages, production time, and more.
Lead time is crucial to maintain a healthy inventory turnover ratio, directly impacting cash flow of a business.
Automated stock replenishment using an inventory management system can improve lead time for a business.

How to calculate lead time?

Lead time is calculated by taking into consideration the delay in manufacturing, purchasing, and logistics.

Lead time formula = Manufacturing time + Procurement time + Shipping time

Why should you calculate lead time?

Reduced labor costs

By calculating lead time, businesses get to identify inefficiencies in manufacturing processes and refine the overall operational efficiency, thus reducing labor costs.

Increased orders inflow

Shorter lead times could indicate potentially no out-of-stock situations for businesses. This, in turn, can open up more opportunities for sales.

Optimized cash flow

The longer the lead time, the longer the business's cash flow is tied. By knowing the ideal lead time, businesses can plan purchases or manufacturing, ensuring better cash flow.

Frequently asked questions

Lead time is attributed to the overall process, right from placing an order to the time it's delivered. Delivery time, on the other hand, specifically refers to the time taken during transportation/logistics alone.
There are multiple types of lead time, depending on the business context. Some of the popular types are customer lead time, material lead time, production lead time, cumulative lead time, procurement lead time, and distribution delivery lead time.
Lead time delays can happen due to multiple factors like global disruptions, poor vendor relations, complex supply chain problems, custom delays, and more.
Lead time in shipping refers to the time taken in processing the order, right from the time the order is placed to the time the order reaches the customer.

Simplify inventory and order management for your business

Finance Free Apps

Lead Time Calculator