Difference between Lead time and cycle time.
#Difference between Lead time and cycle time.
ANS: 1. Lead Time Starts when a customer made an order and ends at delivery. On the other hand, Cycle time starts from when works begin on the order and ends when the order is ready for delivery.
2. Lead Time is measured by elapsed time (minutes, hours, etc.), whereas Cycle Time is measured by the amount of time per unit (minutes/customer, hours/part, etc.).
3. Lead Time = Cycle Time * WIP
4. Example: Lets A Company gets an Order Of 15000 Units on December 1 and he has to deliver it 25 December. But the company starts the work from 4 December and ends on 20 December. So the Cycle time is (20-4)= 17 Days but the Lead Time is (25-1)=25 days. Now we can say Cycle time is the rate at which your operation is producing a unit. Now if you need 0.5 minutes to produce a unit that means, you need (15,000*0.5)= 7500 minutes or 125 hours or 16 days to complete the order. But You are taking 17 days that means there is some problem in WIP or Inventory as well as Waiting Time. So from Lead time and Cycle time anyone can the commitment to the customer or can easily gauge the situation of his Industry.
ANS: 1. Lead Time Starts when a customer made an order and ends at delivery. On the other hand, Cycle time starts from when works begin on the order and ends when the order is ready for delivery.
2. Lead Time is measured by elapsed time (minutes, hours, etc.), whereas Cycle Time is measured by the amount of time per unit (minutes/customer, hours/part, etc.).
3. Lead Time = Cycle Time * WIP
4. Example: Lets A Company gets an Order Of 15000 Units on December 1 and he has to deliver it 25 December. But the company starts the work from 4 December and ends on 20 December. So the Cycle time is (20-4)= 17 Days but the Lead Time is (25-1)=25 days. Now we can say Cycle time is the rate at which your operation is producing a unit. Now if you need 0.5 minutes to produce a unit that means, you need (15,000*0.5)= 7500 minutes or 125 hours or 16 days to complete the order. But You are taking 17 days that means there is some problem in WIP or Inventory as well as Waiting Time. So from Lead time and Cycle time anyone can the commitment to the customer or can easily gauge the situation of his Industry.
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