What does the term 'lead time' refer to in manufacturing?

The term 'lead time' in manufacturing refers specifically to the time from order to delivery. It encompasses all the stages involved from when a customer places an order until the finished product is delivered to them. This definition is crucial in understanding how efficiently a company can operate and meet customer demands.

Lead time includes not just the production time, but also procurement of raw materials, setup times, manufacturing times, and any delays that may occur during the process. Effective management of lead time is essential for optimizing workflow and maintaining customer satisfaction, making it a key metric in supply chain management and production planning.

While assembly time, setup time, and procurement time are important aspects of the manufacturing process, they are just components of the overall lead time rather than the concept itself.