What does "lead time variance" measure?

Lead time variance measures the inconsistency of actual lead times compared to the expected ones. This concept is crucial in supply chain management because it directly affects inventory levels, customer satisfaction, and overall efficiency.

When businesses plan their operations, they establish expected lead times based on various factors such as production schedules, supplier reliability, and logistics capabilities. Lead time variance captures how much actual lead times deviate from these expectations. A small variance signals a reliable process, while a large variance may indicate issues in any part of the supply chain, prompting a need for analysis and adjustments.

The other options do not accurately define lead time variance. The difference between production and shipping times pertains to two specific stages of the fulfillment process rather than overall lead time consistency. The gap between order placement and delivery is more about waiting periods rather than the rhythm of expected versus actual timings. The average time it takes to restock shelves focuses solely on inventory management and does not encompass the broader concept of lead time variance across the supply chain.