Lead Time vs Cycle Time

Lead time clock starts when the request is made and ends at delivery. Cycle time clock starts when work begins on the request and ends when the item is ready for delivery. Cycle time is a more mechanical measure of process capability. Lead time is what the customer sees.

Lead time depends on cycle time, but also depends on your willingness to keep a backlog, the customer’s patience, and the customer’s readiness for delivery.

Another way to think about it is: cycle time measures the completion rate, lead time measures the arrival rate. A producer has limited strategies to influence lead time. One is pricing (managing the arrival rate), another is managing cycle time (completing work faster/slower than the arrival rate).

Corey Ladas

If you want to learn more about where our fixation on Lead Times and Cycle Times comes from, then take a look at my new free book entitled Theories of Work: How We Design and Manage Work or go to the specific chapter in the book here.

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35 thoughts on “Lead Time vs Cycle Time

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  2. I thought that Cycle time is the average time-interval between two successive deliveries. This is according to the definition in Shook’s text “learn to see”.
    Sameh

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  4. I agree with Sameh. Your definition of Cycle time is the “manufacturing lead time”. Your definition of lead time refers to the “order lead time”. MLT does not equal to cycle time, which is the time between two successive deliveries, a reciprocal of throughput. By Little’s Law:
    Lead Time = Cycle Time * WIP

    • The definition posted is by Corey Ladas. I have found it is up to those within a value chain/stream/network to decide when to start and stop a clock on both Lead Time and Cycle time.

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  9. I’m new here, but I’m blown away by the suggestion that, if you’re having trouble meeting customers’ lead time expectations, the problem may be that you are not charging them enough. Thanks.

    • That shouldn’t really be shocking. It’s not that much different from any other product. If demand is outstripping supply, you raise prices. That way you ensure the product is available to the people who most want to purchase it. People who would like to have it and see it as valuable but can’t afforded are not as bothered as those who can afford to buy it but can’t get it because you can’t supply it.

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  11. There seems to be a general confusion on the definitions of lead time and cycle time. The developers of kanban-applications should get this right. According to Little’s law (LT = WIP/TP = WIP*CT), Sameh and Pauli Caroli are right. And since cycle time is the inverse of throughput (TP) it can’t be the same as lead time.

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  13. Lead time or takt time may be shortened by deploying addnl resource viz man or machine and vis versa for a given cycle time…

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  17. Can someone explain the two concepts in plain English (using examples) rather than just citing formulae? would be a big help, thanks!

  18. Lead time of particular job starts when we recd. the order & we deliver the final product to customer.
    eg. If customer wants to purchase one product ,say compressor & he finalise the order then lead time starts from the same moment.
    it includes drawing preparation time from design department , matl. procurement time from material department , raw matl. processing time to finish good(shopfloor) , inspection time (QA/qc ) , delay time (of all dept ) , transportation time to end user.
    And cycle time of job is the time between actual raw material taken for processing in manufacturing unit & final product ready to despatch to the customer. it also includes inspection time of job , move time , queue time . Here conversion of raw material into finished product i.e. compressor is the cycle time.

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