Lead time, also known as processing time, describes the total period from the placing of an order to the final delivery of a product or service to the customer.
It covers all stages along the value chain, for example:
- Order or order intake
- Procurement of materials or resources
- Production or delivery of the service
- In-house processing and quality control
- Logistics and Delivery
Lead time is therefore a key indicator of the efficiency of business processes.
A short lead time means:
- faster delivery to customers
- greater customer satisfaction
- greater responsiveness to changes in demand
- lower storage and processing costs
- greater competitiveness
A long lead time, on the other hand, may indicate bottlenecks, such as those caused by:
- inefficient production processes
- long lead times
- complex approval processes
- lack of automation
- Capacity issues
For start-ups and businesses, optimising lead time is particularly important, as it has a direct impact on customer experience, scalability and operational efficiency. In fast-growing markets in particular, a short lead time can be a decisive competitive advantage.
The aim of many optimisation approaches (e.g. lean management) is therefore to reduce unnecessary waiting times and process steps and to make the entire workflow as efficient as possible.