Lead time is generally understood as the amount of time required to prepare an action. In the transportation planning under it e.g. the time is grasped, which is necessary for the preparation of the transportation. In the procurement and the production disposition the time span up to the release of the order or the production order. Just like the goods receipt processing time or a safety time, the lead time extends the time span of the replenishment of a product. It thus has the effect of increasing inventory in the case of materials held in stock.
In different ERP or merchandise management systems, the term is applied quite differently. In some systems, the lead time is preset with a minimum value, in some it only exists for production. When using the lead time, always pay attention to the system-specific definition.
The lead time data field in ERP systems is often used to include hidden collateral in the scheduling. Therefore, make sure that the times entered here are really needed and realistic.