What aspect of supply chain management does 'lead time' refer to?

Lead time in supply chain management specifically refers to the amount of time that elapses from when an order is placed until it is received and available for use. This time frame includes various stages such as order processing, manufacturing, transportation, and any potential delays that may occur during these processes. Understanding lead time is crucial for effective supply chain operations because it directly impacts inventory management, customer satisfaction, and overall efficiency.

Having a clear grasp of lead time allows businesses to plan better, forecast demand, and strategically manage their resources. Thus, the duration between order and delivery is the key element that defines lead time in the context of supply chain management.