What Is Lead Time?
Lead time is the interval between the inception and completion of the manufacturing process. In other words, it’s how long it takes for a product to be developed and delivered to the customer.
For example, an engineer in need of carbon graphite mechanical seals for a high-altitude application such as aerospace design can see lead times ranging from a couple weeks to several months, depending on the necessary specifications. Although a carbon graphite manufacturer’s lead times should remain fairly consistent from project to project, a variety of factors can lengthen or shorten the manufacturing process. We’ll take a closer look at these factors in a later section.
Manufacturers use lead times to create a schedule for their work and to give themselves deadlines for delivering finished products to customers.
The Cost of Lead Time
Lead time directly influences the size of your inventory, which is why reducing lead times should always be a top priority. If your manufacturer is inefficient and requires six months to produce the parts you need for your application, then you need to order at least six months’ worth of parts to stay ahead of things.
Not to mention, inventory demand forecasting becomes more difficult the further into the future you get. Dealing with inaccurate demand forecasting makes it essential to have additional inventory as a safety buffer.
So, longer lead times require larger inventories, which ties up your cash for longer periods of time. With more efficient lead times, you could that extra money to generate more sales or even have more competitively priced products.
What Factors Affect Lead Time?
Four aspects of the carbon graphite manufacturing process have the largest effect on lead times:
Availability of Raw Materials:
If your manufacturer can’t get the raw materials necessary for your parts, that will obviously impact lead times. Supply chain uncertainty has been a bigger issue in recent years, but raw material availability is always a concern when predicting lead times.
Inventory:
There’s no guarantee that your manufacturer will have the base grade of carbon graphite you need in stock. When the necessary material is readily available, there’s no issue. However, if your manufacturer is all out, they must produce more before they can fulfill your order.
Custom Carbon Graphite Grades:
If your application requires parts that can withstand low temperatures, high altitudes, or any other extreme condition, a custom grade may be necessary. This isn’t an issue for manufacturers that develop and mix their own custom carbon graphite grades, but it does add time to the process.
Testing:
If you’re ordering new parts or components, carbon graphite testing is typically necessary to ensure they meet your specifications. When testing is needed, it adds valuable time to the process.
Supply Chain Lead Time
With manufacturing, the supply chain begins with raw materials and ends with you receiving the final product. Whenever materials, parts, or products have to change hands, time is added to the process.
In a perfect world, your manufacturer will always have the proper raw materials on hand to fulfill your order, and your lead times will be relatively short. However, the world isn’t perfect, your manufacturer won’t always have raw materials handy, and there’s always the potential for supply chain delays.
How to Calculate Lead Time
Manufacturing lead time typically consists of four periods, leading to this equation:
Lead time = accumulation + customization + manufacturing + delivery
In this case:
- Accumulation is the time it takes for the manufacturer to receive the raw materials necessary for the project. If the manufacturer already has the raw materials on hand, this time is zero.
- Customization accounts for an additional time period for situations where a custom grade of carbon graphite is necessary.
- Manufacturing is the time it takes to machine and finish your project’s parts or components.
- Delivery is the time it takes for the manufacturer to ship your order to you.
Planning to Reduce Lead Time
Lead times are unavoidable, but there are several things you can do to ensure they don’t disrupt your next project or cost your business money:
Add a Buffer for Lead Times:
If lead times are a constant problem for your company, consider building them into your product development timeline.
Find a Manufacturer You Can Trust:
A reliable manufacturer can make all the difference in the world. They understand what you need, don’t require a learning curve, and consistently meet deadlines.
Try to Avoid Manufacturers that Outsource:
If you’re concerned about lead times, then you definitely want to avoid outsourcing. A manufacturer that doesn’t develop their own carbon graphite grades or only handles the machining must rely on a third party. That added step will add to your lead time.
Communication:
Clearly communicate with your manufacturer, especially if you’re having them create new parts. The more efficient you are in providing specifications, the shorter your lead time will be. Of course, communication is a two-way street, so great customer service is always important.
For a more in-depth understanding of how to reduce lead times, read this article: How to Reduce Lead Time in Manufacturing.