Posted in Operations and Supply Chain Terms, Total Reads: 261
Definition: Combined Lead Time
The longest planned lead time involved to accomplish the activity in question. For any item planned through MRP, it is found out by reviewing the lead time for each bill-of-material path below the item; whichever path adds up to the greatest number defines combined lead time. It is also known as cumulative lead time.
Illustration given below shows the different combined lead times one may find in a manufacturing process.
There are two types of combined lead time:
• The Combined Manufacturing lead time is the time that is required to manufacture an item if all the raw materials and components are in stocks but had to prepare all the sub assemblies level by level.
• The Combined total lead time is the time needed to manufacture an assembly or an item if one had to order all the raw materials or components and if one had to make all the sub assemblies.
Significance of Combined Lead Time
The importance of the combined lead time from a material planning point of view is that beyond the combined lead time, variations in the schedules can be accommodated without upsetting the course of any active purchase orders or works orders at least from a material point of view. Inside the combined lead time changes may not be possible due to a deficiency of one or more components and even those changes that are achievable could cause interruption to current works orders, intended orders and/or purchase orders. Large increases to the schedule inside the combined lead time for one customer may therefore have a unfavorable effect on other customers. Large reductions in schedules can result in spare material and idle capacity.
It is significant to notice that the combined lead time includes the lead time of purchased items. It is a assessment of the importance of relationships with vendors to note that your vendors’ lead times, as part of the combined lead times, are integral to your planning process. Changes to a purchased part’s lead time affect the combined lead time of all parts that use the part. Purchase lead times are often longer than internal lead times.