Do you want to increase the profitability of your business by maximizing productivity? Chances are, you answered "yes" to that question. At first glance, maximizing productivity seems an easy task. All you need to do is reduce the amount of time wasted each day, right? Well, it’s not that simple.
We’re all at the mercy of Father Time, especially when working to tight deadlines and turnarounds. Project managers are charged with making sure projects run to plan by making sure key milestones are hit and schedules are adhered to. Yet, if you don’t have a strong understanding of how long each task in your schedule will take and fail to plan accordingly, you’ll inevitably face delays and risk derailing the project completely. This is where getting to grips with lead time management can help.
Lead time management not only helps you review your timekeeping at a forensic level of detail but can ultimately optimize project performance. Let’s find out more about lead time management and how it can help you.
- What is Lead Time? What Does it Mean in Project Management?
- What are the Benefits of Understanding Lead Time?
- What is Lag Time?
- How is Lead Time Calculated?
- How Forecast Can Help You Calculate and Improve Lead Times
What is Lead Time? And What Does it Mean in Project Management?
Lead time is the period between when a task is begun and when it is completed. This is also known as ‘latency’. ‘Lead time’ is a term used in many types of businesses and contexts but is a concept integral to the day-to-day work of project managers.
Anything we do that is related to work has a lead time. Here are some examples:
- The time between a task being briefed and the first draft of copy being shared.
- The time between final files being shared and a new website pushed live.
- The time between an order being accepted and the parcel being sent out.
In project management specifically, lead time generally refers to the amount of time allocated to a specific task or project.
Cycle Time Versus Lead Time
You may have heard the term ‘cycle time’ before and wondered how this differs from lead time. Simply, cycle time is the time it takes for an entire product to be produced or a project to be completed.
What are the Benefits of Understanding Lead Time?
When looking to run effective projects, understanding lead time is non-negotiable. It’s a key metric that impacts the planning stage and the day-to-day running of all projects.
Being able to accurately calculate lead time helps project managers estimate how long each section of the project will take to complete, allowing detailed timelines to be drawn up and resource to be planned. Here are five key benefits of understanding lead time.
Downtime is a huge draw on productivity. But with effective lead time management, you can cut downtime down to as close to zero as possible. While some downtime is inevitable — no matter how detailed your plan is, we’re all human at the end of the day — it should be reduced wherever possible.
Less downtime means less time wasted between tasks and more time to spend on what matters: producing incredible work that your stakeholders and end-users will love.
Both excess downtime and failing to judge the lead time correct for a task can ultimately lead to increased project costs. On the flip side, understanding lead time and therefore creating accurate time plans, and seeing increased productivity can lead to reduced costs.
Here’s an example: let’s say you contracted a freelance web designer at $300 a day for a 5-day period. However, poor planning up-front meant that you underestimated how long it would take to complete the task they were hired to work on. This means you need to extend their contract to cover another week of work. Suddenly, a $1,500 cost to the business has doubled to $3,000. What’s worse is that they also spent a whole day in the middle of the first week doing nothing while they waited for the copywriter to make amends to the proposed homepage copy. That downtime equals $300 of your budget wasted due to downtime.
Even if your work is produced in-house, excess downtime means that resource that could be spent on other projects is going to waste, impacting the business’s bottom-line.
Having a strong understanding of lead times can guarantee less downtime across the project and reduced project costs.
Higher Levels of Customer Satisfaction
Everyone loves receiving work early. And understanding your lead times can help you manage expectations and even over-deliver.
While you never want to rush work just to try and gain a competitive advantage (this will inevitably result in lower quality work and a negative perception of the business), optimizing lead times can help you cut down overall project length.
Lead Over Competitors
Speaking of competitive advantage, shorter lead times can benefit you here, too. If one agency could produce a new website for your business in six months and another quoted you the same cost but with delivery in three months, which agency would you hire?
That being said, never deliver sub-standard work for the sake of shaving off a few hours or days from your lead time.
Optimized Project Flow
If you manage your projects using the waterfall methodology, lead time is something you’ll be well-acquainted with. In waterfall projects, you can’t begin the next step until the previous step is completed due to dependencies.
Lead time is key to mapping out waterfall plans. For example, when building a website, it’s essential to have a first draft of the copy ready before designers can start laying out all the elements. Here, the project manager needs to understand how long the copywriter will take to produce the copy to inform when they can resource time with the designer to begin the layout.
What is Lag Time?
Lag time is the antithesis of lead time. This refers to the amount of time the next task on the to-do list, or waterfall, will be pushed back by in the face of delays. Tasks that have a dependency are most often impacted by lag times due to the previous task taking too long to complete or other issues that mean the task can’t be started yet.
How is Lead Time Calculated?
So, how do you calculate lead time in project management? Whether you’re pulling together a complete project timeline or simply need to update a stakeholder on when they can expect to see updates on work, calculating lead time is simple.
As long as you understand the variables that could impact your project, lead time is relatively straightforward to calculate.
Work Out the Time Required for Each Step of Your Project
The first step to calculating the lead time for a project is to understand how much time each phase of your project will take to complete.
Precisely what this breakdown will look like will be dependent on the ask and the industry you work in. So, take the brief, break it down into bite-sized chunks and estimate how much time each of those steps will take to complete. Ask your colleagues how long they will need to complete their relevant part of the project and bake in time for feedback and amends where necessary.
Add it All Together
The second step is simply to add it all together. At Forecast, we recommend inputting all these timings into a Gantt chart to help you understand how the dependencies work together. This will help you and your client understand how each stage impacts the next, which is especially important when managing feedback as delays can lead to lag.
Plus, being able to visualize your project process can help you better understand the actions required from you and your team over the coming weeks and months.
An Example Project
Let’s say you’re a project manager at a full-service web design agency. You receive a brief from a client to create a 5-page website for their floristry business, which will include copywriting, design, SEO, and launch support.
There are three key stages to consider: planning, design, and development. Exactly what the breakdown of each stage will look like will depend on the deliverables and complexity of the requirement. Here is an example of how this project could look.
- Briefing and project planning (including creating a time plan and cost estimate)
- Strategic planning
- Collection of samples and files
- Creation of a layout created based on the wireframe
- Gathering of assets, including photography, graphics, and logos
- Development of the design, including fonts, iconography, and custom features
- Production of a style guide
- Style sheets
- Web page templates
- Launch support
How Forecast Can Help You Calculate and Improve Lead Times
One of the biggest barriers to running a successful project is not having a clear view of project progress and lead times.
Mistakes happen. Delays are inevitable. But a good project manager can quickly establish the impact these changes will have on the project in the long term.
Forecast is here to help you be the best you can be. With an intelligent Auto-Schedule feature that turns a list of tasks into an in-depth project plan using AI, Forecast makes it easy to understand your project’s lead times in seconds. Your schedule is available in an easy-to-use Gantt chart format that is highly visual and easy to understand at a glance. Plus, with automated resourcing, you can make the most of your available resources and cut down on time wasted.
To improve your lead time and optimize project performance, sign up for a 14-day free trial of Forecast here.