Lead Time - How to Calculate? Use of Lead Time in RMG Unit.

Lead Time Factor in RMG Unit.

We know all the processes of a manufacturing unit from confirm an order to ship out to the customer. Planning department set the ex-factory date based on customer requirement. And all other department do the relevant job to ensure the delivery on time. Normally Buyers/Customer giving fixed ex-factory date for their order. Sometimes buyer ask manufacturer to confirm best possible  delivery date and mutually fixed a date for ex-factory.  Lead time is the total amount of time taken from confirmation an order to delivery that product or services. A factory has to shipped the order within the timeframe means Ex-factory date.

Internally factory divide this lead time into two category.

First part is: 

Material Lead Time: From placing an order with the Suppliers for all kind of materials to complete the order and received it on factory is call material lead time. This part normally handled by merchandising department.

Second part is:

Production Lead time: Time taken to produce all the order qty from raw materials to shippable goods with right quality & deliver on time to the customer is called production lead time.

On 15th September

That means the time from cutting/ knitting to packed all required garments are production lead time. On the other hand we can tell Summation of material lead time and production lead time is called Order Lead Time.

Here if all the others departments doing their job to make availability of all accessories inside the factory premises then production department will get proper time to complete the order.

Calculation of Lead Time:

For Example,

If a factory received an order on 1st July 2021 & Customer asking delivery on 20th September 2021.

Here Lead Time is = July 31 days + August 31 days + September 20 days = 82 days.

Read Also: What is Cycle Time, Basic Time & SMV?