How is 'lead time' defined in supply chain context?

In the context of supply chain management, 'lead time' is defined as the time from order initiation to completion. This encompasses all phases of the order process, including the time taken for order placement, processing, production, and eventual delivery to the end customer. Understanding lead time is crucial for effective supply chain planning, as it impacts inventory management, production scheduling, and customer satisfaction.

Having a clear grasp of lead time allows supply chain professionals to optimize their operations, ensuring that they can meet customer demands while maintaining efficiency. This holistic view of lead time is essential for aligning supply chain activities and improving overall responsiveness to market changes.