Lean logistics describes the principles that guide the act of cutting waste — thereby reducing cost — in supply chain models. Supply chain refers to the stages of a process that begins with production and lasts until an item is introduced into a market. The concept of lean management is thought to have been introduced by Toyota®, the auto manufacturer. Many experts believe that the principles of lean logistics are what enabled Toyota® to progress from a small company to a major global corporation. A few of the major components of lean logistics are the design of a manufacturing system that is simple, recognition that a system is never perfect and can always be improved, and the application of lean management through the consistent improvement of systems.
A professional who practices lean logistics believes that the only value in a manufacturing system is in services or products that a customer can purchase. From this perspective, unused inventory and equipment and labor that is not properly deployed are considered to be waste. A lean business model is designed to eliminate this waste.
Practitioners of lean management believe that products should be made only to meet demand. In other words, producing more than what can sell leads to waste. Products that sit on shelves are wasted and therefore have no value while they do increase cost. When a company produces more than it can sell, it also slows down production and uses equipment and labor for processes that have no value from a lean management perspective.
Proponents of lean logistics believe that there is value only when customers purchase items that are manufactured. For this reason, business models are never perfect and can always stand for improvement. As demand changes, so must a lean business model. Likewise, as new kinds of technologies are developed, lean business must also restructure manufacturing systems so as to achieve new heights of efficiency.
The principles of lean logistics state that a model should be constantly changing. With this in mind, most lean managers understand that data and measurements regarding processes should be accurate and constant. This is the only way to assure that new practices are effective and to determine where improvements can be made. Another priority of lean managers is the the smooth implementation and effective training of workers. In order for consistently new models and practices to be effectively implemented, workers should understand why new practices are superior and how they can best contribute to more efficient production.