Service Process Lead / Delivery Time.

Lead time / delivery time is the time between commencement and completion of a process, therefore, in a customer call centre, the lead time for a customer phone call may be the time difference between answering the call and call completion.

The formula for lead time = 1/Throughput rate. Where: Throughput rate = (Tasks completed)/ Time

Lead Time / Delivery Time calculation in a Service Process.

The service industry covers a broad range of process types, such as meal preparation and provision in restaurants, maintenance and repair of electrical and mechanical equipment, many government bodies, the financial industry etc.. Measuring and continually reducing lead time is critical to continued success.

Example: Consider a restaurant serving 20 meals per hour. On average one meal is served every 3 minutes. If the lead time can be reduced, then it may allow a higher throughput of customers (if that is the focus of the restaurant).

Example: Consider a bank, where customers go into the bank to complete financial transactions. If on average one bank counter employee can complete the transaction requests of 10 customers per hour, then on average the lead time of each customer is 6 minutes. Can this be reduced by having the customer complete forms in advance of getting to the desk, or by simplifying processes so that the cycle time per customer is reduced?

Reducing the lead time should increase customer satisfaction, plus improve operating efficiency for the bank.