Lead Time is the elapsed time between two defined events in a process, such as order placement and delivery or replenishment request and availability.
How it works
In ecommerce fulfillment it is useful to separate processing time, carrier transit time and total customer promise. The same term can therefore refer to different intervals depending on the team.
Practical example
An order received Monday is prepared Tuesday and delivered Thursday: processing time and transit time should be separated to identify where improvements are possible.
Why it matters
Lead time affects delivery promise, conversion, required inventory and satisfaction. Reducing it can create value, but not at the expense of reliability.
What to watch
Confusing average speed with reliability can lead to aggressive but unstable promises. Customers often prefer a precise date over a theoretically faster but uncertain one.