Lean logistics is an application of lean manufacturing principles. The core of lean logistics is to eliminate all non-value-added activities (waste) within productions, movements and storages. It reduces lead time, cuts cost, and improves quality. In order to be competitive, enterprises in western countries widely use lean manufacturing and logistics principles in automotive industries, especially for engine manufacturing system due to its high contents of assembly work. However, in China, lean logistics and its applications are fairly new to many companies. This article analyzes the current status of lean logistics in engine manufacturing in China, summarizes lean logistics principles, put forwards application of lean logistics principles based on a real case study of a new manufacturing system planning. In details, origins of the lean logistics are introduced, characteristics of engine manufacturing logistics are outlined, requirements of the lean logistics system are proposed, PFEP (Plan for Every Part) methodology is used, and packaging specifications are analyzed. This article also describes and analyzes supply chain logistics, warehouse storage, information system and production line logistics. Milk Run and Super Market concepts are applied in logistics planning of the manufacturing system.