What Is Manufacturing Lead Time? How to Reduce It?

Manufacturing lead time plays a crucial role in advancing your business to the next level. However, some of you may not have a clear understanding of it. Today, I will provide a detailed explanation to help you gain a comprehensive understanding.

• The definition of Manufacturing lead time
• How to calculate Manufacturing lead time?
• How to reduce manufacturing lead time

What is lead time in manufacturing?

Manufacturing lead time, also referred to as production lead time, is the duration between when a factory receives an order and when the order is completed. This includes various stages such as sample production, procurement of raw materials, bulk production, and packaging.

For importers, manufacturing lead time holds significant importance. By calculating this time along with shipping time, importers can determine when they will receive the goods. This allows them to plan their sales and manage their inventory effectively.

For instance, let’s consider an Amazon seller who imports products from China and intends to sell them during the peak season. It is crucial for the products to be manufactured on time. Any delay would result in missing the peak season and having the products stuck in the warehouse. Ultimately, the seller would have to offer significant discounts, leading to substantial losses.

Therefore, some importers include clauses in their contracts that specify the manufacturing lead time and outline solutions for potential delays. This serves as a form of control over the factory and ensures the importers’ business interests are protected.

How to calculate manufacturing lead time?

Manufacturing lead time is typically calculated in a general sense, as there is no fixed duration for each process. Let’s consider an example of sourcing 1000 customized backpacks for an Amazon FBA seller. Typically, it takes around 40-45 days to complete the manufacturing process.

Once the purchase contract with the factory is signed, the manufacturing lead time begins. The formula for calculating manufacturing lead time is as follows:

Manufacturing lead time = pre-production sample and confirmation time + raw material procurement time + manufacturing time + packaging time.

How to calculate pre-production sample and confirming time?

Before starting mass production, it is necessary to have the factory create a pre-production (PP) sample to ensure that it meets the importer’s requirements. This involves checking the size, fabric, pattern, color, logo, and other specifications. The pre-production samples must be reviewed and approved before proceeding with bulk production. Therefore, some time is required for the production and delivery of the PP samples.

How to calculate purchasing raw materials time?

The factory needs time to procure the necessary raw materials as per the contract. This usually doesn’t take long since the factory has established relationships with long-term suppliers. However, in certain situations, such as when a product suddenly becomes highly popular and leads to a shortage of materials, this period of time may be extended.

How to calculate mass production time?

Once the PP samples are approved, the factory can begin mass production. This stage of the manufacturing process involves multiple production stages and constitutes a significant portion of the total lead time. Furthermore, the duration of mass production varies depending on the product, including the manufacturing techniques and procedures involved.

Additionally, if your customized products are in high demand, the manufacturing lead time will inevitably be longer, if factories are overwhelmed with numerous back orders.

Packaging time

After the production process is finished, the workers will proceed to package the products. The duration of this process is not extensive and varies depending on the complexity of the packaging methods and the efficiency of the workers.

In the actual business setting, it is common to encounter delays in manufacturing lead time. Factories often provide various reasons for these delays, such as a shortage of labor, environmental inspections, or power rationing policies. In addition to these objective factors, the real reason behind these delays is often related to how factories handle large orders. They may prioritize completing orders that have been pre-paid or have a longer lead time, and then proceed to fulfill other orders when they have available time. In the following, I will explain how to address this issue.

How to reduce manufacturing lead time?

Choose reliable factories

The first step is to select a trustworthy factory. While there are many methods available on Google to determine the reliability of a factory, the most effective approach is to conduct a factory audit. This will provide a comprehensive understanding of the factory’s production conditions, scale, capacity, and quality control measures. These factors are crucial in ensuring that your products are completed on time and meet high-quality standards.

Our Tacole bags can assist you in conducting factory audits and providing detailed reports. With years of experience in working with factories, we can accurately assess whether a factory has the capability to manufacture your product.

Alternatively, you can directly utilize our supplier resources. These suppliers have all undergone our factory audit and have collaborated with us on numerous occasions. They demonstrate professionalism and reliability throughout the entire production process, ensuring the timely completion of your order.

Ask your agent to follow up on production and control lead time

Managing the entire production process on your own can be time-consuming and exhausting. Therefore, it is advisable to engage the services of a sourcing agent. Jingsourcing can assist you in overseeing the entire manufacturing process. We regularly communicate with the factory every 10 days to ensure production progress and urge them to complete the goods on schedule. Additionally, we conduct product inspections to ensure that no issues arise at the end.

Furthermore, Tacole can help you clarify the specific requirements with the factory, such as packaging, labels, and shipping marks. We ensure that they have a clear understanding to avoid any modifications or rework. Each modification typically results in a delay of 3 working days, so minimizing modifications is crucial for timely completion.

With our extensive and long-standing network of reliable suppliers, we can help you overcome any challenges that may arise during the manufacturing process, ensuring that your products are completed on time.