Lead Time
Definition
Lead time is the interval between placing an order for a component and receiving it. For in-stock parts it may be days; for factory-ordered or scarce parts it can stretch to many weeks or months.
Why it matters
Lead time drives production planning, because a build cannot begin until its longest-lead component arrives. Lead times extend sharply during allocation and broad shortages, when demand outpaces manufacturing capacity. When authorized lead times become unworkable, buyers look to broker and surplus channels that hold immediate inventory, accepting a higher price in exchange for availability. Managing lead-time risk is a key reason teams diversify sourcing.
Related terms
- Allocation: the condition that most often stretches lead times.
- MOQ (Minimum Order Quantity): another supplier constraint that shapes ordering.
3E Technology helps you find alternate suppliers when lead times are too long. See reducing supply-chain risk.
Frequently Asked Questions
What is lead time in component sourcing?+
Lead time is the interval between placing an order for a component and receiving it. For in-stock parts it can be days; for factory-ordered or scarce parts it can run many weeks or months. Lead time is a core planning input, because production cannot start until the longest-lead part arrives.
Why do lead times spike?+
Lead times extend when demand outpaces supply, during allocation, capacity constraints, or broad shortages. When authorized lead times stretch to many months, buyers often turn to brokers and surplus dealers holding immediate stock, trading a higher price for availability.
Related Resources
Allocation
Allocation is when component demand outstrips supply and manufacturers ration parts. Here's how it differs from obsolescence and how to source through it.
MOQ (Minimum Order Quantity)
MOQ is the smallest quantity a supplier will sell in one order. Here's how minimum order quantity affects sourcing, especially for low-volume needs.
Surplus (Excess) Inventory
Surplus or excess inventory is unused component stock a company sells off. Here's where it comes from and why it matters for sourcing hard-to-find parts.
How to Reduce Supply Chain Risk With Diversified Sourcing
How to identify critical single-source dependencies in your BOM, build diversified supplier shortlists, and track new source candidates.
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