Last edited 21 Jul 2016

Lead times for construction

Lead times are a measure of the amount of time that elapses between initiating a process and completing that process. Typically on construction projects, lead times refer to the amount of time that elapses between placing and order for an item and its delivery to site, but it can also refer to the time required for the preparation of drawings, plant hire, approvals processes and so on. In relation to the activities of the main contractor, the term lead time may be used in relation to mobilisation activities.

Lead times reflect the time taken to carry out an order, however, they are also affected by other variables, such as market conditions. For example, if a factory has a very full order book, or if there is a shortage of materials, there may be a delay between ordering an item and the commencement of manufacturing. In September 2013, as the construction industry emerged from recession, Construction Manager reported that “...in the last six months lead times for bricks, roof tiles and lightweight blocks more than doubled” (ref Construction Manager, Bricklayer’s pay up 20% as price hikes threaten recovery 27 September 2013).

Lead times may also be affected by variables such as strikes, holiday periods, inclement weather and so on. Items coming from abroad, that require transportation may take longer to arrive, and holiday periods and market conditions in other countries may also be different.

As lead times include the duration of the manufacturing process, and delivery to site, it is important to recognise that there is a difference between lead times and the length of order books.

It is crucial that long lead time items are identified as early in a project as possible as they may affect the critical path for the project. Long lead time items might include; bespoke cladding and glazing systems, lifts and escalators, concrete and steel frames, mechanical and electrcial equipment such as transformers, low and high voltage switchgear, boilers, chillers, lifts and escalators, specialist personnel and specialist plant such as cranes and piling rigs. These are sometimes placed on order prior to the appointment of contractors so they do not delay the project programme.

Where a long lead time item appears on the critical path, delays in the delivery of that item may extend the entire project programme. This requires careful management, as several items may need to be delivered in sequence to perform a single task, with delays in any one causing a delay to the entire project.

Whilst lead times for individual items may be difficult to influence, lead times for sequences of activities can be reduced by overlapping those activities (see fast track construction), and the impact of lead times on the completion date for a project can be reduced by ordering long lead time items early. This process is referred to as lead time management and may include the preparation of a long lead schedule.

If the latest lead times for particular items are known, then working backwards from the desired delivery dates, the latest procurement times or ‘order by’ dates can be identified. This may need to include a period for the preparation of samples or mock-ups and approvals processes. The programme for the preparation of production information and the tender process can then be defined.

Tables giving indications of lead times are available (for example Building's Lead times and Mace's Foresite) however, appointment of a programme consultant, an experienced project manager or early appointment of contractor with knowledge of current market conditions can help in assessing project sequencing and identifying long lead time items. Clearly, the sooner that critical items are identified, the sooner it is possible to begin the process for ordering them.

Where it is important to order items early, this must be made clear to the client as soon as possible, as it may have an impact on their cash flow. It can sometimes be appropriate for the client to pay for items even though they remain ‘off-site’, for example, where a contractor has themselves made a large payment for plant or materials that have yet to be delivered, or if the client wishes to ‘reserve’ key items in order to protect the programme. See off-site materials for more information.

NB The front-end construction such as; service diversions, demolition, setting out, underground drainage, piling and groundworks may also merit early placing of contracts to protect the project programme.

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