Abstract： In the environment of contract manufacturing, demand uncertainty often leads to variation of delivery lead-time and impacts on upstream and downstream decision-making in innovative products supply chain and generates incentive conflicts. A supply chain coordination model provides a Stackelberg game process, which is established by a real option of lead-time flexibility between suppliers and buyers. It makes suppliers and buyers to determine their right policies on the reasonable variable magnitude of delivery lead-time, flexible cost-sharing ratio and optimal order policy. It is found out that this two-way operation of risk sharing mechanisms may make supply chain channel for innovative products to achieve Pareto optimization, thus coordinates the whole supply chain and improves supply chain performance.