Broadly, Lead Time covers the entire time needed to fulfill a need or request. If a Lead Time is 24 hours for a product, I need to order it at least 24 hours before I need it.
Lead Time is generally broken down into two components,
- Value Added (Time spent adding desired qualities/quantities to the solution)
- Non-Value Added (Transitions and other time between value-adding steps)
While it may not be intuitive at first; we would ideally want to reduce both times, as even Value Added time will have waste in it.
The closer a lead time gets to 0*, the closer it gets to being Just in Time.*in whatever scale is relevant to the situation
Common mistakes with tracking Lead Time
Starting the timer too late or ending too early
Much can happen before an order/request is submitted, including issues that cause people to quit, so it is important to consider the earliest start of a customer’s experience. Similar issue for the end of a process, simply sending a solution is not the end, what does the customer have to do before they can actually use it? While tracking the true start and end often looks worse initially, the extra difference of improvements more than make up for the difference.
Think of Lead Time as the total duration of a customer’s journey. You will have other ongoing inputs that are separate from the customer experience, such as maintenance or daily setup, but they are only contributing factors.
Tracking only business hours
Many customers, even other businesses, will have at least frustration as a consequence of any hours waited. Worse, hiding the full picture leads to artificially low priorities for potential solutions.
Considering external customers as the only customers
While the external customer is the ultimate customer for any organization, they are not the customer for every problem within the organization. For any Lead Time, be sure to clearly understand and define the customer(s) and their perspective. This not only improves the representation of any process, but also allows more opportunities to practice customer service.