Manufacturing lead time is a key factor when you want to take your business to the next level. But some of you may not be very clear about it. Today I will explain it in detail for you to have a thorough understanding.
What is lead time in manufacturing?
Manufacturing lead time, also known as production lead time, is the period of time from a factory receiving the order to finishing the order. It includes the process of making samples, purchasing raw materials, bulk production and packaging.
For importers, manufacturing lead time is greatly important. By calculating it and the shipping time, importers can know when they could receive the goods, if they could sell products as planned and arrange the inventory reasonably.
Suppose an Amazon seller imports products from China and wants to sell them in the peak season, he requires the products to be manufactured on time. Because if it delays, he will miss the peak season and make the products stuck in the warehouse. Finally, he has to give a big discount, which is a huge loss.
Thus, some importers would clarify manufacturing lead time and the solution for the delay in the contract. It restrains the factory to a certain extent, and ensures their own business interest.
How to calculate manufacturing lead time?
In the actual production, manufacturing lead time is always in a general calculation, because there is no certain period of time for every process. Take 1000 customized hoodies we helped an Amazon FBA seller source for example. It usually needs 15-20 days to finish.
After we have signed the purchase contract with the factory, manufacturing lead time begins. And the formula is:
Manufacturing lead time = pre-production sample and confirming time + purchasing raw materials time+ manufacturing time + packaging time
Pre-production sample and confirming time
Before mass production, we demand the factory make a PP sample for us to make sure if it fits importer’s requirements. We will check the size, fabric, pattern, color, logo, etc. The pre-production samples must be submitted before bulk production so that we can find out if there exist any errors or misunderstandings. So here it needs some time for PP sample making and delivery to us.
Purchasing raw materials time
The factory needs time to purchase the raw material according to the contract. It usually doesn’t take long, because the factory also has its long-term cooperative suppliers. But if in some special conditions, like a product suddenly became the rage on the market and lead material out of stock, this period of time will become longer.
Mass production time
After we approve of the PP samples, the factory will start mass production. Because there are many production stages involved in the manufacturing process, this period of time covers a large part of the total. Moreover, the mass production time varies among different products, which includes different manufacturing techniques and procedures.
In addition, if your customized products are hot selling, the manufacturing lead time is inevitably longer. Take Bing Dwen Dwen, Beijing 2022 Olympic Mascot, for example. Once Beijing Winter Olympics opened on Feb 4th, Bing Dwen Dwen had a sudden popularity. Chinese factories are fully occupied with many back orders, which are scheduled for the end of March.
Packaging time
When completing the production, workers would package the products. It doesn’t take much time. It depends on the complexity of packaging methods and work efficiency.
In real business, you are likely to encounter manufacturing lead time delay issues. And the factory always has lots of reasons, such as shortage of labor, environmental inspections, power rationing policy, etc.
Besides these objective reasons, the real reason also includes that factories deal with big orders in advance. Or it first completes the order with pre-payment, and finishes others when they have time. In the following, I will explain how to deal with this problem.
How to reduce manufacturing lead time?
Choose reliable factories
Firstly, you should choose a reliable factory. Though many methods on Google teach you how to distinguish a factory reliable or not, the most effective way is to conduct factory audit. It could help you better demonstrate the real production condition in the factory, production scale and capacity, quality control, etc. They are all key factors determining whether your products could be finished on time with high quality.
Jingsourcing could help you make factory audits and issue reports to you. Based on years of experience in dealing with factories, we can make the accurate judgment about whether a factory has the capability to manufacture your product.
Or you can directly use our supplier resources. They have all passed our factory audit and worked with us many times. They perform professionally and reliable throughout the entire process. They could greatly finish your order production.
Ask your agent to follow up on production and control lead time
It takes a lot of time and energy if you follow up the whole process by yourself. Thus, it is a good idea to find a sourcing agent. Jingsourcing can help you supervise the entire process while manufacturing. We would confirm with the factory about production every 10 days, and push them to complete the goods on time. Meanwhile, we would conduct product inspection, ensuring no problems occur in the end.
Also, Jingsourcing can help you confirm the details with the factory, such as requirements of packaging, labels and shipping marks. We ensure they have a good understanding, and avoid modifications and rework. One modification could usually cause 3 working days delay. The more modifications you make, the longer it takes.
In addition, suppose you have paid the deposit and the factory is ready to purchase material. But at this time the factory can’t work because of COVID-19. Then we can help you find other factories in other regions. We have a rich and long-term cooperative supplier network for assistance. We can help you solve all problems occurring in the manufacturing process, ensuring your products can be finished on time.
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Five further asked questions
Why is it important to reduce manufacturing lead time?
For e-commerce sellers, if the production time is reduced, you can launch new products onto the market more quickly, capturing the best sales opportunities, especially for popular items.
What is the lead time of a factory order?
“Lead time of a factory order” refers to the period from when you tell the factory “I want this product” to when the factory says “The goods are ready, you can pick them up.” This time can include many steps, such as the factory preparing materials, actually manufacturing the product, packaging the product for shipment, and so on. The time length varies with the factory and product.
What is production lead time days?
Assuming the production lead time is 20 days, that means from the moment you tell the factory to start production, to when the factory finishes and is ready for you to ship the goods, the whole process takes 20 days.
The production lead time days can be affected by many factors, such as the complexity of product production, the efficiency of the factory’s work, the raw materials used, and so on.
What is lead time vs cycle time in manufacturing?
“Cycle Time” in manufacturing refers to the amount of time required to complete a production process or to manufacture a single unit. For example, if a machine can produce a component every 10 minutes, then the cycle time for that machine is 10 minutes.
“Manufacturing lead time” refers to the total time needed from when you officially place an order until the factory completes the mass production and the order is ready to be shipped.
Both affect production efficiency, but they focus on different aspects.
What are the other types of lead time?
Putting lead time in supply chains, you’ll discover the lead time of raw material sourcing, product production, order delivery, logistics, etc.
