Lead Time from Order Receipt to Complete Manufacture

What is Lead Time from Order Receipt to Complete Manufacture?

Lead Time from Order Receipt to Complete Manufacture

In the world of logistics, lead time refers to the time it takes for a product to go through the entire manufacturing process, from the moment an order is received to the point where it is ready for shipment. This lead time can be broken down into three main components: order receipt to order entry complete, order entry complete to start to build, and start to build to ready for shipment.

The first component, order receipt to order entry complete, involves several important steps. After an order is received, it needs to go through a series of checks and validations to ensure its accuracy and feasibility. This includes order revalidation, where the order is reviewed to ensure all necessary information is present and correct. Additionally, a configuration check is performed to verify that the requested product can be manufactured as specified. A credit check is also conducted to assess the customer's creditworthiness and determine if any payment terms need to be adjusted. Finally, scheduling is done to allocate resources and plan the production process.

Once the order entry is complete, the second component of lead time begins: order entry complete to start to build. During this phase, the customer may experience some waiting time as the manufacturing process is prepared. Engineering and design teams may need to review the order and make any necessary adjustments or clarifications. This step ensures that the product can be manufactured according to the customer's specifications and requirements.

The final component of lead time is the time from start to build to ready for shipment. This stage involves several crucial elements. First, the order needs to be released to manufacturing or distribution, depending on the company's production setup. Then, an order configuration verification is performed to ensure that the product being built matches the customer's order. Production scheduling is also done to allocate resources and plan the manufacturing process efficiently. Finally, the build or configure time is the actual time it takes to manufacture the product, including any assembly, testing, or customization required.

Understanding the lead time from order receipt to complete manufacture is essential for both logistics professionals and beginners. It allows companies to plan their production processes effectively, manage customer expectations, and optimize their supply chain. By breaking down the lead time into these three components, businesses can identify potential bottlenecks or areas for improvement and take appropriate actions to streamline their operations.

In conclusion, the lead time from order receipt to complete manufacture encompasses the entire manufacturing process, from order entry to shipment readiness. It involves various steps such as order revalidation, configuration check, credit check, scheduling, customer wait time, engineering, design, release to manufacturing or distribution, order configuration verification, production scheduling, and build or configure time. By understanding and managing these elements, companies can enhance their efficiency, customer satisfaction, and overall logistics performance.