Cycle time

Cycle time or lead time is the end-to-end delay in a business process. For supply chains, the business processes of interest are the supply chain process and the order-to-delivery process. Correspondingly, we need to consider two types of lead times: supply chain lead time and order-to-delivery lead time. The order-to-delivery lead time is the time elapsed between the placement of order by a customer and the delivery of products to the customer. If the items are in stock, then it would be equal to the distribution lead time and order management time. If the items are made to order, then this would be the sum of supplier lead time, manufacturing lead time, distribution lead time, and order management time. The supply chain process lead time is the time spent by the supply chain to convert the raw materials into final products plus the time needed to reach the products to the customer. It thus includes supplier lead time, manufacturing lead time, distribution lead time, and the logistics lead time for transport of raw materials from suppliers to plants and for transport of semi-finished/finished products in and out of intermediate storage points. Lead time in supply chains is dominated by the interface delays due to the interfaces between suppliers and manufacturing plants; between plants and warehouses; between distributors and retailers; etc. Lead time compression is an extremely important topic because of time based competition [#!stalk90!#] and the correlation of lead time with inventory levels, costs, and customer service levels.