Why lead-time matters more than ever
If you run a small or medium manufacturing company, you’ve probably felt the pressure of customers expecting faster responses and quicker deliveries. Competition is tough, and even a day of delay can make the difference between winning or losing a job.
We know this from experience. Our team has spent years in small manufacturing environments, working in metal fabrication, plastics, and assembly. One thing we’ve seen again and again: companies underestimate how much lead-time impacts their reputation and growth.
It’s not just about speed. Lead-time is about trust. When customers know you respond quickly, deliver as promised, and keep them informed, they keep coming back. When you can’t, they quietly look for another supplier.
The hidden problem with long lead-times
Many companies think of lead-time as a single number. For example, “our lead-time is three weeks.” On paper, this sounds reasonable. But in reality, not all jobs are the same.
Imagine telling a customer that their small part, which could be made in an hour, will take three weeks. They’ll feel dismissed and may never return. On the other hand, if you promise a fast turnaround on a complex order without the capacity to back it up, you’ll end up late, explaining delays, and losing credibility.
The result?
- Lost sales opportunities
- Lower margins due to rework and firefighting
- Frustrated customers who stop calling you for quotes
- A shop floor team constantly under pressure
We’ve seen companies lose clients not because of quality, but because their lead-times didn’t align with customer expectations. And once trust is gone, it’s hard to win back.
The four lead-times you should track
Instead of one big number, break lead-time down into four key types. This gives you a clear view of where bottlenecks appear and how to fix them.
1. Quoting Lead-Time
This is the time from receiving a customer request for quote (RFQ) to sending back the final quote.
- It’s not about how long you work on the quote, but how long the customer waits.
- Ideally, quoting lead-time should be less than 24 hours.
- Delays here mean lost opportunities: a quote sent three days late often goes straight to the recycle bin.
2. Sales Lead-Time
This covers the time from when the customer sends a purchase order to when they actually receive the product.
- Customers don’t care about when you ship; they care about when they can use the product.
- Long sales lead-times often push customers to competitors who can deliver faster.
3. Production Lead-Time
Within sales lead-time sits production lead-time: from when a work order hits the shop floor until the product is finished and approved.
- If you don’t know your production lead-time, you can’t promise realistic delivery dates.
- Managing production load is key here. Accepting work without knowing your current capacity is a recipe for constant delays.
4. Process Lead-Time
This drills down even further: the time for each process step, such as cutting, machining, welding, or painting.
- Process lead-times add up to create your total production lead-time.
- Understanding them helps you identify bottlenecks and prioritize improvements.
Common mistakes we’ve observed
Across many shops, two mistakes keep showing up:
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Using one blanket lead-time for everything
- Treating all jobs the same means you either scare away small, simple work or over-promise on large, complex projects. Both hurt business.
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Over-promising and under-delivering
- Telling a customer a job will be ready in one week when your backlog clearly requires three weeks sets you up for failure.
- This leads to constant excuses, erodes customer trust, and eventually costs you accounts.
A better approach: Understanding and managing your lead-times
So, how do you improve? It starts with two things:
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Group your products smartly
- Different types of products require different lead-times. Group them by size, complexity, or process requirements.
- Use actual shop floor data, not guesswork, to set realistic estimates.
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Know your workload before you commit
- Customers want promises you can keep. To do that, you need to know your current capacity.
- Complex spreadsheets or manual reports often fail here, leaving you guessing.
This is where a simple ERP can help. By tracking orders, workloads, and process times in one place, you can quote faster, promise more accurate delivery dates, and avoid the trap of over-promising.
The benefits of getting it right
When you manage lead-times effectively, you see results almost immediately:
- Win more jobs by quoting faster than your competitors.
- Build customer trust with delivery dates you can keep.
- Reduce stress on your team by avoiding constant last-minute reshuffling.
- Spot bottlenecks early before they disrupt your schedule.
- Create room for growth because customers who trust your lead-times return with more business.
A simple action plan
Here’s how you can start reducing lead-times in your company:
- Track your current quoting, sales, production, and process lead-times.
- Group your products by type, size, or complexity and assign realistic lead-times to each group.
- Review your current workload before promising delivery dates.
- Use tools that make this tracking simple and fast, so you don’t waste hours creating manual reports.
Ready to take control of your lead-times?
ERPs don’t need to be complicated. At Nengatu, we designed our system to help small and medium manufacturers like yours simplify lead-time tracking and manage workloads more effectively.
We offer a free trial so you can see how it works in your own operation.
Book a call with us today, and let’s assess your current state together. We’ll help you build a plan to reduce lead-times and stop losing opportunities.