What does supply lead time measure?

Supply lead time is a critical measure in supply chain management that refers to the average time taken from the moment a customer places an order until the product is delivered to them. It encompasses various stages of the order fulfillment process, including order processing, manufacturing or sourcing the product, and the time taken for transportation to the customer's location. This metric is vital for understanding how efficiently a supply chain operates and is essential for customer satisfaction, as shorter lead times typically enhance customer experience and can provide a competitive advantage.

The other options refer to more specific aspects of the overall supply chain process; for example, order processing time is just one component of lead time and does not account for the time taken for shipping or manufacturing. Similarly, transportation time alone focuses solely on the shipment phase, excluding order placement and processing. Lastly, inventory management time is related to how inventory is handled but does not directly correlate with the broader measure of lead time, which captures the entire journey from order to delivery.