What is the Lead Time

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When you're working on a big task, it's important to manage your time in a smart and scientific way. Lead Time management is all about minimizing delays and waste. If you do it well, you can increase your profits.

Let's explore everything you need to know about lead times, why Lead Time management is crucial, and how to improve it.

The Concept of Lead Time

In simpler terms, lead time is the 'delay' or 'time gap' that occurs from the beginning of a specific task until its completion. 

Understanding Lead Time is essential for project managers because it helps them accurately estimate the duration of tasks and activities, set realistic project schedules, and manage project resources effectively. By analyzing Lead Time, project managers can also identify opportunities for process improvement and reduce the overall project Cycle Time.

It's important to note that Lead Time is different from Lag Time. Lag Time is the intentional or unintentional delay between completing one task or activity and starting the next. While Lead Time is focused on the time it takes to complete a task, Lag Time is the time between tasks.

Effective project management requires a clear understanding of Lead Time and Lag Time and how they can impact the project schedule and delivery.

Why does Lead Time hold significance?

Here are the top five compelling reasons that emphasize the importance of the Lead Time metric:

1. Competitive Edge

Lead time can provide a competitive advantage by allowing project managers to identify and eliminate bottlenecks, streamline processes, and deliver projects faster than their competitors. This can improve the organization's reputation and increase customer satisfaction.

2. Better Productivity

By measuring lead time, project managers can identify areas where time is wasted and take steps to improve efficiency. This can increase productivity, as team members can focus on value-added activities and quickly complete tasks.

3. Cost Reduction

Lead time metric is essential for project managers to reduce costs by identifying opportunities for process improvement, consolidating tasks, and eliminating unnecessary steps. This can result in significant cost savings as projects are completed more quickly and with fewer resources.

4. Customer Satisfaction

Lead time has a direct impact on customer satisfaction. The shorter the lead time, the sooner the customer receives the requested product or service. By measuring and reducing lead time, project managers can improve customer satisfaction, leading to increased loyalty and repeat business.

5. Project Dependencies

The Lead Time metric can help project managers schedule and prioritize tasks effectively in projects with multiple dependent tasks. This can ensure that each task is completed on time and that the overall project is delivered within the agreed timeframe, preventing delays and ensuring that the project is completed successfully.

How is lead time calculated?

In general, Lead Time is calculated as follows:

Lead Time = Start Time + Processing Time + Wait Time + Move Time

Where:

Start Time: The time at which the process or task is initiated.

Processing Time: The time it takes to perform or process the task.

Wait Time is the time spent waiting for the next step in the process or for resources to become available.

Move Time: The time it takes to move the item or task from one location to another.

In a project management context, Lead Time might be calculated as the time it takes from initiating a project to completing it. This would include the time it takes to plan and organize the project, gather resources and team members, perform the various tasks and activities required to complete the project, and deliver the final product or service to the customer.

How to improve lead times using the add-on for Jira

The calculation of Lead Time in Jira is based on the status of Jira issues. Lead Time = the time the issue stays from the first To Do status to the last Close status (or other start and end statuses according to your workflow).

The Time Between Statuses app allows you to measure various time metrics, including Lead Time, and see the metric's average value.

First of all, you need to set the conditions for calculating the metric.

You can also set conditions for which statuses should be excluded from the calculation, such as On hold, To review, etc. And set up highlighting critical and warning time limits. If they are exceeded, the specified team members will receive notifications in the task and by email.

After configuring the conditions for calculating metrics, you can view the report.

You will see the calculation results and the average value of the metric according to the received data sample.

Using such an app will allow you to constantly be aware of the situation and respond quickly to potential threats of project completion delays, complex tasks, etc. You will also be able to measure the team's productivity and, based on the measurements, plan the development of future projects much better and set realistic deadlines.

Try Time Between Statuses now! We'll gladly help you implement this add-on in your workflow—book a convenient demo call with our specialist.