Material handling

What Is Material Handling?

Material handling refers to the movement, protection, storage, and control of materials and products throughout the entire process of manufacturing, distribution, consumption, and disposal. It is a critical component of operations management and plays a significant role in determining the efficiency and profitability of a business. Effective material handling aims to minimize product damage, optimize space utilization, improve safety protocols, and enhance overall productivity. This broad field encompasses a wide array of equipment, systems, and procedures designed to handle goods from raw materials to finished products, spanning various industries.

History and Origin

The concept of material handling has evolved alongside industrial development. Early forms of material handling involved manual labor and simple tools, but the Industrial Revolution brought about mechanical aids like conveyors and cranes. A significant turning point came during and after World War II, as industries needed to streamline the rapid movement of goods for both military and civilian purposes. This era saw the widespread adoption of pallets and forklifts, transforming how unit loads were managed and stored⁷. The Material Handling Institute (MHI), an international trade association, was incorporated in 1945 with the objective of serving its members and promoting the industry, further professionalizing the field⁶. MHI's origins trace back to World War II, formed to assist in unifying goods transportation for the American industrial and military efforts⁵. Since then, the material handling industry has continued to innovate, integrating advanced technologies to meet the demands of global supply chain management.

Key Takeaways

• Material handling involves the movement, protection, storage, and control of materials within a facility or supply chain.
• Its primary goals are to enhance operational efficiency, reduce costs, and improve safety.
• The field encompasses a diverse range of equipment, from manual tools to sophisticated automated systems.
• Effective material handling is crucial for optimizing inventory management and warehouse operations.
• Continuous innovation, particularly in automation and robotics, drives advancements in material handling.

Formula and Calculation

While material handling itself does not have a single overarching formula, its effectiveness is often measured through various metrics related to efficiency, cost, and capacity. For example, throughput (items processed per unit of time) and labor utilization are common performance indicators.

One key calculation related to material handling efficiency is the Cost Per Unit Handled (CPUH):

Where:

• (Total\ Material\ Handling\ Costs) include labor, equipment depreciation, maintenance, energy, and space costs associated with handling materials. This relates directly to operational expenses.
• (Total\ Units\ Handled) refers to the total number of items, packages, or volume of material processed over a specific period.

A lower CPUH indicates greater cost reduction and efficiency in material handling operations.

Interpreting Material Handling

Interpreting material handling involves assessing its impact on a company's overall operational performance and financial health. A well-designed material handling system leads to smoother workflows, reduced bottlenecks, and faster order fulfillment. Conversely, inefficiencies can result in higher operational costs, increased product damage, and delays in product delivery. Companies constantly evaluate their material handling processes to identify areas for improvement, often leveraging data analytics to optimize routing, storage, and equipment utilization within warehouse operations and distribution centers. This continuous evaluation helps in maintaining a competitive edge and ensuring customer satisfaction.

Hypothetical Example

Consider "SpeedyShip Logistics," a company that manages the movement of consumer goods. In their primary warehouse operations, they receive bulk shipments, break them down, sort them, and prepare them for individual customer orders.

Before implementing new material handling technologies, SpeedyShip relied heavily on manual labor. Workers would manually unload trucks, move pallets with hand jacks, and pick individual items from static shelving. This led to high labor costs, frequent product damage, and slow order fulfillment.

Recognizing these issues, SpeedyShip invested in a modern material handling system. They installed automated conveyor belts to transport goods from receiving to sorting. They also implemented automated guided vehicles (AGVs) to move pallets between different storage zones and picking stations. For picking, they introduced robotic picking arms for smaller, frequently ordered items.

After the upgrade, the process became much more streamlined. Trucks are unloaded directly onto the conveyor system. AGVs transport incoming inventory to designated storage areas. When an order comes in, the robotic arms quickly retrieve the necessary items, which are then placed on another conveyor for packaging and shipping. This transformation significantly reduced the time taken to process an order, minimized human error, and improved worker safety.

Practical Applications

Material handling finds practical applications across nearly every industry involved in physical goods, from retail and e-commerce to automotive and pharmaceuticals.

• Warehousing and Distribution: Modern distribution centers heavily rely on advanced material handling systems, including automated storage and retrieval systems (AS/RS), conveyor networks, and robotic sorting, to manage vast inventories and fulfill orders rapidly.
• Manufacturing: In manufacturing plants, material handling ensures the smooth flow of components along assembly lines, from raw material intake to finished product dispatch. This includes the use of robotic arms for repetitive tasks and automated guided vehicles for transporting parts.
• Logistics and Supply Chain: Material handling is the physical backbone of logistics, ensuring that goods are transported, stored, and retrieved efficiently across the entire supply chain management process. Regulatory bodies like the Occupational Safety and Health Administration (OSHA) provide guidelines for safe material handling and storage practices to prevent workplace hazards⁴.
• Retail: Retailers, especially those with significant online operations, use sophisticated material handling systems in their fulfillment centers to manage diverse product catalogs and expedite shipping. Companies like Amazon have extensively deployed robotics and automation in their warehouses to increase speed and efficiency, with recent developments including AI models that allow robots to perform more human-like tasks³.

Limitations and Criticisms

While material handling technologies offer significant benefits, they also come with limitations and criticisms. The initial investment for advanced material handling systems can be substantial, requiring significant capital expenditure. Integrating new automated systems into existing infrastructure can be complex and may require extensive retraining for the workforce.

There are also concerns regarding job displacement as automation and robotics become more prevalent in material handling, leading to a shift in required skills and potential challenges for workers to adapt to new roles². Furthermore, over-reliance on complex automated systems can introduce new points of failure; a system malfunction can halt operations across an entire facility, leading to costly downtime and impacting overall risk management strategies. Data fragmentation and outdated infrastructure can also hamper the full potential of these advanced systems in optimizing supply chain management¹. Ensuring the proper asset management of these complex systems is vital to mitigate these risks.

Material Handling vs. Supply Chain Management

Material handling and supply chain management are closely related but distinct concepts.

Material Handling: This refers specifically to the physical movement, storage, and control of products within a defined space, such as a warehouse, factory floor, or distribution center. It focuses on the micro-level processes and equipment used to manage the flow of goods. Its goal is to maximize efficiency and safety in these localized operations.

Supply Chain Management: This is a broader, macro-level concept that encompasses the entire network of businesses and activities involved in getting a product from its raw material stage to the final customer. It includes everything from sourcing and procurement to manufacturing, logistics, distribution centers, and customer service. Material handling is a crucial component of supply chain management, representing the physical execution of many supply chain strategies. While supply chain management deals with the strategic planning and coordination across multiple entities, material handling focuses on the tangible processes within specific facilities.

FAQs

What are the main objectives of material handling?

The primary objectives of material handling are to reduce costs, improve efficiency, enhance safety, optimize space utilization, and improve customer service by ensuring timely and accurate delivery of goods.

What are common types of material handling equipment?

Common types of material handling equipment include conveyors, cranes, forklifts, automated guided vehicles (AGVs), robotic systems, shelving, racking, and automated storage and retrieval systems (AS/RS). These tools assist in various tasks like lifting, transporting, storing, and sorting materials within facilities.

How does material handling impact business profitability?

Effective material handling can significantly boost profitability by reducing operational expenses related to labor, damage, and storage. It also improves throughput and speed, leading to faster order fulfillment and higher customer satisfaction, which can drive increased sales and market share. Poor material handling, conversely, can lead to increased costs and reduced competitiveness.

Is material handling only about automation?

No, material handling is not solely about automation or robotics. While these technologies are increasingly important, material handling also includes manual methods, semi-automated systems, and the strategic planning of processes, layouts, and information flow. The goal is to find the most efficient and safe method for a given task, which may or may not involve extensive automation.