What Is Lead Time?

Textbook Definition

Lead time is the total elapsed time between the placement of a customer order and its delivery, including waiting, queue, processing, and transit time.

In Plain English

Lead time is how long it really takes from the day a customer orders to the day they have it. Not how long the work itself takes. The whole wait, including the time the job sits in line before anyone touches it.

Why Do Owners Who Never Miss on Quality Keep Missing Dates?

Because they measure the work and never the calendar. A perfectionist will measure a joint three times and never once measure how long a job takes from order to delivery. So they guess, and guesses run short. "A few weeks" becomes ten.

The customer was not measuring the craftsmanship. They were measuring the calendar. On the calendar, perfect and late is just late. The fix is a promise date built from real history, not hope.

Signs you have this problem:

  • You quote "a few weeks" or "soon" instead of a date.
  • Customers call to ask where their order is.
  • Your crew is idle some weeks and buried other weeks.
  • You order materials when you get to a job, not when you book it.
  • Jobs get worked on in the order that interests you, not the order they are due.
  • You have never measured the gap between order date and delivery date.
A customer can wait for almost anything, as long as they know how long. Measure your real lead time and promise a date with room in it.

What It Looks Like When "A Few Weeks" Means Ten

From the Fabled Forest · Chapter 5

Blueprint Bella builds the finest furniture in the forest. Doctor Owl's scroll shelf, quoted "a few weeks," was on week eleven and still being sanded because one corner was a hair out. Finished benches for EleWell sat in her shop. A cradle tagged "baby due in January" sat there in late February.

Her crew was playing cards because she had not ordered timber for the mill bridge, which was due before the thaw. Chuck the chipmunk had been quietly tallying on the wall: forty-one idle days since autumn, thirty-three days working past dark.

Doctor Owl found the real dates on three finished jobs: eleven, nine, and ten weeks. Bella had told everyone three. They put up one board, every job sorted by promise date. Bella learned to say "I can't start that until the twentieth." The bridge finished four days before the thaw.

Bella's story is Chapter 5 of Operations for Small Businesses, Book 3 of Dr. Paul's Fabled Forest Business School Series.

How to Set Realistic Due Dates in 5 Steps

You need your last few jobs and their dates. That is all the data it takes to start.

  1. Find your real lead time.

    Take your last three to five finished jobs. For each, find the order date and the delivery date. Average the gap. That is your real lead time, and it is usually longer than you think.

  2. Give every new job a promise date on the day it is ordered.

    Start from your real lead time. Adjust for the size of the job, what is already ahead of it, whether materials are in stock, and who is free to do it.

  3. Add a buffer.

    Something always goes wrong. Add a cushion for it, and plan to finish by the buffer date, not the promise date.

  4. Put every job on one board, sorted by promise date.

    Not by the order it came in, and not by which one is most interesting. Order materials the day a job goes on the board.

  5. If you cannot meet the date they want, say so on day one.

    "I can't start that until the twentieth" is a hard sentence. Saying it on day one beats explaining a late job on day sixty. Good work takes as long as it takes. That is the quality vs. speed trade-off, told honestly.

Dr. Paul's Insight

The second sentence matters most: "I cannot take that one until the twentieth." Owners who cannot say no with a date end up saying yes to everything and delivering everything late. Customers respect a clear date far more than a vague yes. Many will happily wait for a real date. Almost none will happily wait for "soon."

Worked Example: Ten Weeks, Not Three Last three jobs: ordered to delivered in 11, 9, and 10 weeks. Real lead time: 10 weeks. You have been quoting 3 weeks. Every customer waits about 7 weeks longer than promised. Meanwhile, the crew logged 41 idle days waiting on materials and 33 overtime days catching up. At a crew cost of about $800 a day, the idle days alone cost roughly $32,800, money a dated board and on-time material orders would have saved. Figures are an illustration to show the math, not a projection for your business.

Sample: A Promise Date Board

One board, every job, sorted by promise date. Materials ordered the day a job goes up.

Shop: Custom woodworkReal lead time: 10 weeks
JobOrderedMaterialsFinish by (buffer)Promise date
Mill bridgeJan 5Ordered Feb 24Mar 10Mar 17
Spa benchesDec 15In stockFeb 26Feb 28
Town hall wingFeb 27Order Mar 1Jun 1Jun 8
CabinetMar 2Order Mar 2May 4May 11

Sample for illustration. Use your own average lead time and adjust each job for size and what is ahead of it.

Video: How to Give Customers Dates You Can Keep

Video Coming Soon

What Is Lead Time? How to Give Customers Realistic Due Dates

Dr. Paul measures real lead time from past jobs and builds a promise date board on screen.

Days We Had Nothing to Do

Chapter 5 · Lead Time and Due Dates

Perfect, and Six Weeks Late: A Beaver's Bench

"Chuck," she said slowly. "What are those?"

The chipmunk turned around. He moved the screws to one cheek so he could talk.

"Days we had nothing to do," he said, around them. "Since the autumn." He looked at the board. "Forty-one."

What was on the other side of Chuck's board, and what did Bella's real lead time turn out to be? Find out in Chapter 5. Book 3 of Dr. Paul's Fabled Forest Business School Series.

Get the Book on Amazon →

Lead Time Questions

What is the difference between lead time and due date?
Lead time is how long it actually takes from order to delivery. The due date is when the customer needs it. A promise date is the date you commit to, built from your real lead time plus a buffer. Trouble starts when owners promise the due date without checking the lead time.
How do I calculate lead time?
Take several recently completed jobs, find the date each was ordered and the date each was delivered, and average the number of days or weeks between them. That average is your real lead time. Recalculate it every few months as your workload changes.
What is a promise date?
A promise date is the specific date you commit to a customer, worked out from your real lead time, adjusted for the job's size, the work already ahead of it, materials, and available people, plus a buffer for problems. It replaces vague promises like "a few weeks."
How much buffer should I add to a due date?
Enough to absorb the problems that usually happen in your work. Many owners start with about 10 to 20 percent of the lead time and adjust based on how often they still run late. Plan to finish by the buffer date, not the promise date.

Written by Dr. Paul Borosky, DBA, MBA, business consultant and author who helps owners build businesses that run on systems. Want help building a schedule your customers can count on? See fractional COO services.

This page is for general educational purposes only. It is not legal, safety, employment, financial, or tax advice. Safety and employment rules differ by place and industry. Dollar figures are illustrations. The Fabled Forest and its characters are fictional. For decisions about your own business, consult a qualified professional.