Lead Time
The lead time for an item is the time it takes to acquire it, from when a demand is initiated until it has been fulfilled.
The total lead time consists of different internal and external lead times which are defined differently, depending on whether the item is purchased, manufactured in-house, or distributed internally.
In material planning, the total lead time is used to calculate the date a planned transaction must be initiated in order to cover the demand for an item.
In general the lead time is measured in days, but for some transactions like distribution orders hours and minutes are considered.
Lead times can be one of the following general divisions:
- Administrative lead time
- Postal lead time
- Acquisition lead time
- Transport lead time
- Inspection lead time
Administrative lead time
Administrative lead time represents the time required for administrative tasks related to handling an order. This is specified in 'Item. Connect Facility' (MMS003).
Postal lead time
This refers to the specific time required to send quotations and other documents through mail. This is specified in 'Supplier. Connect Item' (PPS040).
Acquisition lead time
This is controlled by the acquisition code specified for the item in 'Item. Connect Warehouse' (MMS002).
The valid alternatives are:
- Manufacturing
- Purchasing
- Distribution
If the item is manufactured, the lead time is taken from 'Product Structure. Open' (PDS001). See listed documents in the See also section for more information.
If the item is purchased or transferred from another warehouse, lead time is specified in 'Item. Connect Warehouse' (MMS002). This is controlled by parameters in 'Supplier. Connect Item' (PPS040) for purchasing or 'Distribution Relation. Open' (DPS001) for distributed items.
Transport lead time
For distribution orders the calculation between required date and time for demand and the planned shipment to fulfill this demand will consider transportation days as well as transportation hours and minutes. This is specified in 'Distribution Relation. Open' (DPS001) for distributed items.
Corresponding information for purchased items are specified in 'Supplier. Connect Transp Lead Times' (PPS010) accessed from 'Supplier. Define Purchase & Financial' (CRS624/4).
Inspection lead time
Lead time is specified in 'Goods Receiving Method. Open' (PPS345) and represents the time required to quality check an item when it is received. For manufactured products, a quality inspection work center must be added in the operation list in product structure. The inspection lead time is calculated the same way as for a normal operation.