The 5 core principles of a Lean Organization were first written about in a book entitled: Lean Thinking by James P. Womack and Daniel T. Jones.  The 5 core principles are widely accepted as a means implementing and establishing a lean organization.  The 5 core principles have been adapted from the 5 original principles that were defined by Dr. Womack and Daniel T. Jones:

1. Define Value from the Customer's Perspective - This is where you would specify what creates value from a customer's point of view.  A common way of doing this is by asking "what is my customer willing to pay for?"
2. ​See the Value Stream - Here you identify all of the steps contained within the entire value stream, this can be done many different ways. 
3. Make it flow - The goal here is to make customer value flow through the value stream as efficiently and effectively as possible.  That means creating customer value and eliminating anything that is considered waste.  
4. Make Only what is considered Value. - This principle tells us to only produce what the customer is creating a demand for.  In other words what they are pulling for.  This principle also tells us that along with making only what the customer is pulling for we should make what the customer is pulling for in the correct quantity, just-in-time and in the optimum quality.
5. Get a little better, Pursuit Perfection - Always strive for perfection by continuously improving and removing any type of waste.  

  Little's law was named after Mr. John Little who was a professor at MIT's Sloan School of Management.  The law states that by reducing work in progress and maintaining a processes average completion rate the lead time will be reduced too.  On the same note, according to little's law increasing the average completion rate while maintaining the same level of work in progress will reduce also reduce the lead time.  

How to calculate?

  Little's law can is expressed with the following equation:

     - Lead time = Amount of work in progress / Average completion rate

The Apics dictionary 2015 defines logistics as:

1. In an industrial context, the art and science of obtaining, producing and distributing material and product in the proper place and in proper quantities.
2. In a military sense (where it has greater usage), its meaning can also include movement of personnel.

Among the primary objectives of logistics are: 

1. providing the most appropriate form of transportaion according to the customers need.
2. providing temporary storage of materials and inventory.

  Because logistics plays such an important role all throughout the value stream there are enormous opportunities with reducing cycle times, improving "changeover of vehicles" and improving the overall flow of activities that fall within logistics.  

  The purpose of Lean Accounting is to support the lean enterprise as a business strategy. It seeks to move from traditional accounting methods to a system that measures and motivates excellent business practices in the lean enterprise.  Applying Lean principles is part of this system.

The Vision for Lean Accounting

1. Provide accurate, timely, and understandable information to motivate the lean transformation throughout the organization, and for decision-making leading to increased customer value, growth, profitability, and cash flow.
2. Use lean tools to eliminate waste from the accounting processes while maintaining thorough financial control.
3. Fully comply with generally accepted accounting principles (GAAP), external reporting regulations, and internal reporting requirements.
4. Support the lean culture by motivating investment in people, providing information that is relevant and actionable, and empowering continuous improvement at every level of the organization.

​Ref: Wikepedia, Lean accounting

  A lead time ladder is the timeline shown on the bottom of a value stream map.  The lead time ladder is used to calculate the production lead time.

  Lean is a continuous improvement strategy that a company embarks on to maximize customer value and minimize waste.  The term "Lean" was first used in the book The Machine That Changed the World by James Womack.  A lean organization focuses on providing complete value or Value added activities to their customers.  One of the ways that lean accomplishes this is through the complete and total elimination of any form of waste.  

What happens when organizations eliminate waste?

  When an organization begins to take a lean approach towards continuous improvement they focus on removing waste from every aspect of the organization's value streams.  As companies focus on removing waste from within their value stream they create processes that require less capital, less time, less effort from resources and more flexible business processes that respond to customer demand much more efficiently.

  Line haul costs are the basic costs of carrier operation.  This includes driver's wages, wear and tear or usage depreciation of the vehicle and any costs associated moving containers or materials.  The costs often vary or change based on mileage, distance shipped and the amount of weight that is carried.  Click on the link below to download a free line haul cost template for your organization.

  Lean Six Sigma is a designation given to a continuous improvement focused organization which combines the two strategies Lean and Six Sigma.  Both strategies focus on the improvement of business processes.  Combining the focus of eliminating all forms of waste with the use of Lean and reducing variation through the use of Six Sigma often yields improved efficiency, use of resources and more predictable process outcomes.  

  The longitudinal scope refers to the “length” of a projects process.  The most common method of defining the longitudinal scope is from “starting point to ending point.”

Example:

• The longitudinal scope of the improvement project is from quote proposal to quote submission.

Tip:  

•   Creating a process map for longitudinal scope can help teams clarify the "length" of their scope and prevent them from going outside of that scope.