Lead times are the amount of time it takes from the issuance of a purchase order to when the finished goods, components, raw materials, etc… are delivered in full to the end destination. We define the lead times in three distinct ways:
- Production Lead Time: The amount of time it takes to manufacture the goods. This is marked by the amount of time from PO Issue Date to Ship Date (when it physically leaves PO recipient’s address).
- Transit Lead Time: The amount of time it takes the goods to travel to the POs final destination (warehouse, fulfillment center, co-packer, contract manufacturer, etc…). This is marked by the amount of time from PO Ship Date to Delivery Date.
- Purchase Order Lead Time: The total amount of time it takes to manufacture the goods and have them travel to the POs final destination. This is marked by the amount of time from PO Issue Date to Delivery Date.