2.5 Lead Time Management

Lead time is not a single number; it is a composite metric comprising manufacturing, transit, and processing durations. Underestimating lead time is the primary cause of missed customer deliveries. This chapter standardizes the calculation and maintenance of lead time data within the ERP system.

2.55.1 The Composite Lead Time 

Total Lead Time Management(TLT) = Manufacturer LT + Transit LT + Inspection LT.

• Manufacturer LT: The 3time Leadfrom Times:
  • ManufacturingPO LT:placement Howto longgoods leaving the supplier takes to make it.
  • Transit LT: Time from their dock to our dock.
  • Transit LT: Freight duration (e.g., Ocean = 40 days, Air = 3 days).
  • Inspection LT: TimeThe frommandatory our"Dock-to-Stock" dock to the shelfinterval (often24-48 ignored,hours) causingfor delays).counting, verifying, and shelving material. Ignoring this creates a "virtual availability" error.

• 2.5.2 The "Unconfirm" Risk:Risk Protocol Protocols

  for when

  When a supplier "de-commitscommits" or pushes out a confirmed date:

  1. Immediate Impact Analysis: Run a "Where-Used" report to identify affected Work Orders.
  2. Customer Notification: Alert the Program Manager within 4 hours if the slip impacts the commit date.
  3. ERP Update: The escalationsystem pathdate must reflect the new reality, not the hoped-for date, to preventforce line-down.accurate shortage reporting.

Final Checklist

Lead Time Component	Standard Definition	Common Error
Mfg Lead Time	Vendor production time	Ignoring holiday shutdowns
Transit Lead Time	Freight duration	Confusing Air vs. Sea estimates
Inspection Lead Time	Dock-to-Stock (min 24h)	Assuming instant availability upon receipt
System Data	Must match current market reality	Using static/outdated LT values