MRI 2315: Warehousing and Distribution

NMIT Johor Malaysia

The interface of marketing and supply chain network produces the warehousing and distribution in the value chain. The transport, warehousing, courier, supply chain, logistics, and distribution industry are the very backbone of businesses and sit within the Maritime Logistics and Shipping sector. Without these critical elements of commerce, cargoes and products would not move from vendor to purchaser and then ultimately to the consumer – end user.

MARKETING – Product Vs Customer

Price Vs Cost

Promotion Vs Communication

Place Vs Convenience

Physical Distribution Vs Channel

People Vs Consideration

Process Vs Coordination

Performance Vs Competence

Warehousing Presentation Vs Conduciveness

Services Packaging Vs Covering

Physical Evidence Vs Confirmation

Supplier – Manufacturer – Distributor – Wholesaler - Retailer

SUPPLY CHAIN AND MARKETING INTERFACE

These fast moving and vital parts of industry, create many career opportunities in all kinds of disciplines from being a warehouse person, to planning the distribution of goods to worldwide destinations. Undoubtedly, the supply, storage and distribution of goods are what make business work. These industries attract people from all kinds of backgrounds and professions. This supply chain related industry is one perfect industry to start your career path and do not necessarily have the best qualifications, as there are ample opportunities to start in very basic roles and work your way up.

What kind of jobs are available within the Supply Chain / Logistics / Transport / Warehousing / Courier / Distribution industry?

These industries, which are parts of Shipping and Logistics are perfect for someone who wants a real hands on job, as there are many opportunities within warehousing

and distribution that can give the job holder a real sense of involvement. The different kinds of jobs in this industry include:

Logistics Coordinator Supply Chain Coordinator Logistics Manager Transport Manager Transport Planner Warehouse Manager Distribution Manager Routing/Scheduling Assistant Distribution Services Manager Traffic Technical Operator

This module opens up the understanding of basic Warehousing and Distribution. There are total of eight topics specifically designed to suit NMIT syllabus.

Learning Objective: To provide a sound understanding of material handling systems, systems efficiency, health and safety aspects in warehouse operation, inventory and materials management, land transportation, warehouse management, customer services, and information System and Technology.

Learning outcomes:• Describe modern business Warehousing and Distribution Management and its

application in the business world, so as to enhance customer satisfaction.• Explain the operations of the warehousing systems in the information age and

effectively utilize the concepts learnt to gain a sustainable competitive advantage for the company.

• Identify solutions associated with warehousing operations problems.• Apply problem solving skills including identifying, formulating and solving

warehousing and distribution problems.• Define the roles and functions of customer service as part of warehousing and

distribution

Topic 1. Material Handling Systems and Their Objectives1.1 Overview of the various types of automated and non-automated materials handling systems. 1.2 Examine the role of packaging in warehouse operation. 1.3 Demonstrate the important role of computer technology in materials management. 1.4 Cost reduction, increased productive capacity and better working conditions. 1.5 Types of handling equipment in manufacturing and warehousing: conveyors, cranes, hoists, trucks. 1.6 Advantages and limitations. Automatic guided vehicles (AGV). Automatic storage and retrieval systems (AS/RS). 1.7 Materials Handling  Topic 2. Analysing and Measuring The Efficiency of Existing Systems2.1 The unit load concept.2.2 Selection of the most appropriate equipment in particular situations2.3 Integration of warehousing systems. 2.4 Economic analysis of systems.

Topic 3. Health and Safety Aspects in Warehouse and Material Handling Systems3.1 Types of legal liability. 3.2 Negligence, duty of care, breach of duty, causation and remoteness, damages. Contributory negligence.3.3 Statutory duty and employers’ liability. Topic 4. Inventory and Materials Management4.1 Basic concepts of inventory management.4.2 Calculate safety stocks.4.3 Production policies influence inventory levels.4.4 Interrelated within Inventories and customer service levels.4.5 Financial aspects of inventory strategy.4.6 Ways to recognize poor inventory management and improvement methods

Topic 5. Transportation5.1 Roles of transportation in logistics management. 5.2 Alternative transport modes. 5.3 Examine the impact of deregulation on carriers and shippers. 5.4 Examine the issues of transportation cost and performance measurement. Topic 6. Warehouse Management6.1 Types of warehouses 6.2 Layout and design 6.3 Utilization of warehouse space 6.4 Warehouse management system.

Topic 7. Customer Service7.1 Define customer service. 7.2 The central role that customer service plays in an organization’s marketing and logistics efforts. 7.3 Identify opportunities for improving customer service performance. Topic 8. Information System and Technology8.1 Describe information systems as a combination of transaction, decision support, and communication systems. 8.2 Describe the role of information system functionality, major modules and external interfaces of supply chain information systems. 8.3 Discuss the enterprise integration and administration, enterprise operations, enterprise planning and monitoring, and communication technology applications.

Topic 1. Material Handling Systems and Their Objectives1.1 Overview of the various types of automated and non-automated materials handling systems. 1.2 Examine the role of packaging in warehouse operation. 1.3 Demonstrate the important role of computer technology in materials management. 1.4 Cost reduction, increased productive capacity and better working conditions. 1.5 Types of handling equipment in manufacturing and warehousing: conveyors, cranes, hoists, trucks. 1.6 Advantages and limitations. Automatic guided vehicles (AGV). Automatic storage and retrieval systems (AS/RS). 1.7 Materials Handling

Learning Outcome: Warehousing roles in the logistics management Importance of Material Handling System in Warehousing Various material handling equipment in the warehouse

Introduction:

Warehousing is an important component of logistic management while distribution activity is the function of marketing. We need different types of goods in our day-to-day life. We may buy some of these items in bulk and store them in our house. Similarly, businessmen also need a variety of goods for their use. Some of them may not be available all the time. But, they need those items throughout the year without any break. Take the example of a sugar factory. It needs sugarcane as raw material for production of sugar. You know that sugarcane is produced during a particular period of the year. Since sugar production takes place throughout the year, there is a need to supply sugarcane continuously. But how is it possible? Here storage of sugarcane in sufficient quantity is required. Again, after production of sugar it requires some time for sale or distribution. Thus, the need for storage arises both for raw material as well as finished products. Storage involves proper arrangement for preserving goods from the time of their production or purchase till the actual use. When this storage is done on a large scale and in a specified manner it is called ‘warehousing’. The place where goods are kept is called ‘warehouse’. The person in-charge of warehouse is called ‘warehouse-keeper’.

Warehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them available conveniently when needed. In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale. Warehousing is one of the important auxiliaries to trade. It creates time utility by bridging the time gap between production and consumption of goods. The effective and efficient management of any organization requires that all its constituent elements operate effectively and efficiently as individual Strategic Business Units (SBUs) / facilities and together as an integrated whole corporate.

Across the supply chains, warehousing is an important element of activity in the distribution of goods, from raw materials and work in progress through to finished products .It is integral part to the supply chain network within which it operates and as such its roles and objectives should synchronize with the objectives of the supply chain. It is not a ‘Stand-alone’ element of activity and it must not be a weak link in the whole supply chain network. Warehousing is costly in terms of human resources and of the facilities and equipment required, and its performance will affect directly on overall supply chain performance. Inadequate design or managing of warehouse systems will jeopardize the achievement of required customer service levels and the maintenance of stock integrity, and result in unnecessarily high costs.

The recent trends and pressures on supply chain / logistics-forever increasing customer service levels, inventory optimization, time compression and cost minimization – have inevitably changed the structure of supply chains and the location and working of warehouses within the supply chains network. Material handling system is then introduced to solve the problem of effective warehousing.

1.1 Overview of the various types of automated and non-automated materials handling systems.

One of the basic components of any manufacturing system is its Material Handling Systems. One of the basic components of any marketing distribution system in the warehousing is also Material Handling Systems. We shall first study the different types of material handling systems that are currently in use. Next, we shall pick a common type of MH system, a conveyor, and look at some details of how to go about designing a conveyor system for a factory.

Material handling discharges an important role in manufacturing and logistics industries. Almost every item of physical commerce was transported on a conveyor or lift truck or other type of material handling equipment in manufacturing plants, warehouses, and retail stores. While material handling is usually required as part of every production worker's job, also known as "material moving machine operators" These operators use material handling equipment to move various goods in a variety of industrial settings including transporting construction materials around building sites or shifting goods onto ships and air carriers.

Material handing is integral to the design of most production systems since the efficient flow of material between the activities of a production system is heavily dependent on the arrangement (or layout) of the activities. If two activities are adjacent to each other, then material might easily be handed from one activity to another. If activities are in sequence, a conveyor can move the material at low cost. If activities are separated, more expensive industrial trucks or overhead conveyors are required for transport. The high cost of using an industrial truck for material transport is due to both the labor costs of the operator and the negative impact on the performance of a production system (e.g., increased work in process) when multiple

units of material are combined into a single transfer batch in order to reduce the number of trips required for transportDefinition: Material Handling refers to activities, equipment, and procedures related to the moving, storing, protecting and controlling of materials in a system.Efficient short distance movement in or between buildings and a transportation agency.• Four dimensions

• Movement• Time• Quantity• Space

• Material handling means providing the right amount of the right material, in the right condition, at the right place, at the right time, in the right position and for the right cost, by using the right method.

• “Material handling is the movement and storage of material at the lowest possible cost through the use of proper method and equipment”.

• It is simply picking up, moving, and lying down of materials through manufacture.

• It applies to the movement of raw materials, parts in process, finished goods, packing materials, and disposal of scraps.

• In general, hundreds and thousands tons of materials are handled daily requiring the use of large amount of manpower while the movement of materials takes place from one processing area to another or from one department to another department of the plant. The cost of material handling contributes significantly to the total cost of manufacturing.

• Material handling is a necessary and significant component of any productive activity.

• A properly designed and integrated material handling system provides tremendous cost saving opportunities and customer services improvement potential.

1.1.1 What is a material handling system?• A material handling system can be simply defined as an integrated system

involving such activities as handling, storing, and controlling of materials.• The word material has a very broad meaning, covering all kinds of raw

materials, work in process, subassemblies, and finished assemblies.• The primary objective of using a material handling system is to ensure that the

material in the right amount is safely delivered to the desired destination at the right time and at minimum cost.

• The material handling system is properly designed not only to ensure the minimum cost and compatibility with other manufacturing equipment but also to meet safety concerns.

1.1.2 Objectives of Materials HandlingHaving understanding the definition of materials handling, the objectives of materials handling are obviously to reduce the overall operation costs and increase efficiency. By doing so, accident can be avoided and damage can be prevented. In the event of materials handling, efficient utilising of space for maximum quantity of goods and consume the shortest time so to speed up the cycle time of storage.

The main objective of the efficient materials handling is to decrease the costs. Materials handling equipment does not come under the production machinery but is an auxiliary equipment which can improve the flow of materials which in turn shall reduce the stoppages in production machines and thus increases their production.

In brief followings are the objectives:

(1) Cost reduction by:

(i) Decreasing Inventory level

(ii) Utilizing space to better advantage

(iii) Increasing productivity.

(2) Waste Reduction by:

(i) Eliminating damage to material during handling

(ii) Being flexible to meet specific handling requirements of different nature.

(iii) Making proper control over stock during in and out handling.

(3) Improve Working Conditions by:

(i) Increasing productivity per man-hour

(ii) Increase in machine efficiency through reduction of machine down time

(iii) Smoothing out workflow

(iv) Improving production control.

(4) Improve Working Conditions by:

(i) Providing safe working conditions

(ii) Reducing worker’s fatigue

(iii) Improving personal comfort

(iv) Upgrading employees/workers to productive work.

(5) Improve Distribution by:

(i) Decreasing damage to products during handling and shipping.

(ii) Improving location of storage facilities.

(iii) Increasing the efficiency of shipping and receiving.

1.2 Examine the role of packaging in warehouse operation.

Although warehousing main function traditionally is storage. Other functions are getting more and more attention these years. Packaging Logistics is a fairly new concept that has during the last years developed and gained increased attention by both industry and scientific community (Johnsson 1998; Twede 1992; Dominic et al. 2000; Öjmertz 1998; Twede & Parsons 1997;Henriksson 1998; Saghir 2002). The concept of packaging logistics focuses on the synergies achieved by integrating the systems of packaging and logistics with the potential of increased supply chain efficiency and effectiveness, through the improvement of both packaging and logistics related activities. One way to achieve this is to concentrate on packaging development that benefits packaging related activities in the logistical system, often called logistical packaging. This one-sided way of approaching the packaging logistical issues is dominating in literature and the logistics discipline. There have been few efforts to present an adequate definition of packaging logistics, and these have been fragmented and vague in available literature. Warehousing is an important component of logistics. Therefore packaging also plays an important role in warehousing.

What Is Packaging?

Packaging bundles up your application's executable files into a single file, called a distribution unit, so that it is easier to deploy and install your application to your user's computer.

With the Microsoft development environment you can package the files required to run your application (for example Java class files, Windows .exe or .dll files, HTML pages, and so on) into easily manageable and movable distribution units. Examples of packaging are:

Putting all the application files for an application into a single setup (.exe) file which, when run, installs the application and adds an item to the Windows Start menu.

Putting all the Java .class and .gif files that implement an applet into a cabinet (.cab) file. Then, when an HTML page that references the applet is loaded, you can download and install the applet.

Packaging Types:

Packaging may be looked at as being of several different types. For example, a transport package or distribution package can be the shipping container used to ship, store, and handle the product or inner packages. Some identify a consumer package as one which is directed toward a consumer or household.

Packaging may be described in relation to the type of product being packaged: medical device packaging, bulk chemical packaging, over-the-counter drug packaging, retail food packaging, military material packaging, pharmaceutical packaging, etc.

Various household packaging types for food

Aluminum can with an easy open lid

It is sometimes convenient to categorize packages by layer or function: "primary", "secondary", etc.

Primary packaging is the material that first envelops the product and holds it. This usually is the smallest unit of distribution or use and is the package which is in direct contact with the contents.

Secondary packaging is outside the primary packaging, perhaps used to group primary packages together.

Tertiary packaging is used for bulk handling, warehouse storage and transport shipping. The most common form is a palletized unit load that packs tightly into containers.

These broad categories can be somewhat arbitrary. For example, depending on the use, a shrink wrap can be primary packaging when applied directly to the product, secondary packaging when combining smaller packages, and tertiary packaging on some distribution packs.

• Consumer packaging• Marketing managers primarily concerned with how the package fits

into the marketing mix.• Industrial packaging

• Logistics managers primarily concerned with efficient shipping characteristics including protection, ability to withstand stacking when on a pallet, cube, weight, shape and other relevant factors.

.

External cover with functional content

Optimal packaging of a product is a critical factor in logistics. And the reason is clear: Without it, many logistics processes could not be performed at all or could be carried out only at great additional cost. The function of the packaging is not just to protect the product. It performs many other jobs as well. These include providing information about the contents as well as enabling and facilitating other logistics processes -

including transport and handling as well as storage, order processing and warehousing.

No logistics without packaging

The different logistics functions of the packaging - that is, protection, storage, transport, information and handling - are an outstanding example of the interdependencies that exist in logistics. As a result, the packaging may be regarded only as a part of the entire logistics system. In packaging design, a compromise that addresses all functional areas must be found. The correct design of packaging can help lower overall logistics costs and raise the level of supply and/or delivery service.In addition to the logistics functions, packaging must also fulfill production functions, marketing functions and usage functions. This means: Through the choice of suitable packaging, it is possible to produce directly from

the packaging or into the packaging without intermediary processing procedures. Packaging can lend a special character to a product, enabling it to be distinguished

from the competitors’ products. Important functions can also be assigned to packaging, including roles in advertising and sales promotions [2].

In light of environmental considerations, it is essential for packaging design to meet these needs. Ideally, the design should make it possible for a customer to recycle the packaging or facilitate its use for other purposes.

 

Protective function

Good service includes the ordered good’s arriving in satisfactory condition. The packaging should protect the product from mechanical and climatic stresses during delivery.

 

Warehouse function

Packaging is required to facilitate the storage of a product. If possible, the packaging should be stackable and meet the demands of the storage equipment. In addition, it should facilitate practical storage of the packaging supplies - e.g., through collapsible boxes.

 Transportation function

The packaging also has the task of facilitating the transport of a product or actually enabling the product to be transported. Likewise, the packaging’s form and size should permit the optimal use of the transport space with the

lowest possible packaging weight.

 

Handling function

The goods should be combined by the packaging into units that simplify their processing during transshipment and delivery. The form and size of the packaging units must also facilitate the employment of technical aids such as forklifts or storage and retrieval systems. If the commodity is handled manually, then grip holes in the packaging can be necessary.

 Information function

The packaging should be marked in such a way that the products in it can be identified easily - e.g., by color, pictures or labels. Furthermore, packaging of fragile, perishable or similar products requiring special treatment during delivery should be clearly marked with pictures, symbols or explanations. During automated transportation and processing procedures, automatic product recognition is facilitated by suitable information appropriate to the packaging, e.g., barcodes or radio frequency identification (RFID) tags.

The Role of Packaging

• Identify product and provide information (communication)• Improve efficiency in handling and distribution• Containment • Unitization• Apportionment • Convenience in Handling• Protection• Interfaces with Customers, Production, Environment, Logistics

Packaging Materials

• Basic considerations include:• Soft materials• Plastic• Environmental issues• Recycling (reverse logistics)

• Packaging Box

• Packaging Tape

A comparison of various packing material characteristics.

Main Interactions of the Packaging System

1.3 Demonstrate the important role of computer technology in materials management.

Modern business management cannot operate without computer and management information system. The advantages of computer technology in materials management

in today's organizations are sometimes hard to quantify since some elements are of intangible value. However, the positive impacts include: • Improvement on Return on Investment (ROI)

• Reduce cost • Enhanced asset and liability management

• Optimization of space utilized• Improve efficiency

• Reduce product processing time• Reduce order processing errors

• Enhanced customer service• Better exchange of information

1.4 Cost reduction, increased productive capacity and better working conditions.

The total cost per unit is the sum of the following: • Cost of material handling equipment – both fixed cost and operating cost

calculated as the cost of equipment divided by the number of units of material handled over the working life of the equipment.

• Cost of labour – both direct and indirect associated cost calculated in terms of cost per unit of material handled.

• Cost of maintenance of equipment - damages, lost orders and expediting expenses, also calculated, in terms of cost per unit of material handled.

1. Cost Reduction• Reduce costs• Better control and manage inventory• Reduce damage, maintain or improve product quality

2. Increased Productive Capacity• Increase space utilization (e.g. minimize aisle space)• Reduce delays • Reduced manufacturing cycle time (total time required to make a

product from the receipt of its raw material to the finished state can be reduced)• Order cycle – from the moment the customer issued the

P.O. till the time he/she receives the product• Move more materials at one time and faster• Materials move as short a distance as possible

3. Better working conditions• Reduce product handling, less product damage and accidents • Promote safety (e.g. less accidents) • Develop effective and improved working conditions

1.5 Types of handling equipment in manufacturing and warehousing: conveyors, cranes, hoists, trucks.

Storage and handling equipmentThe equipment that falls under this description is usually non-automated storage equipment. Products such as pallet racking, shelving, casters and carts, among others, belong to storage and handling. Many of these products are often referred to as "catalog" items because they generally have globally accepted standards and are often sold as stock materials out of Material handling catalogs

Storage and handling equipmentIt is usually non-automated storage equipment. Products such as pallet racking, shelving, casters and carts, belong to storage and handling.

Engineered systemsEngineered systems are typically custom engineered material-handling systems. Conveyors, Handling Robots, Automatic Storage and Retrieval System (AS/RS), Automatic Guided Vehicles (AGV) and most other automated material-handling

systems fall into this category. Engineered systems are often a combination of products integrated to one system. Many distribution centers will optimize storage and picking by utilizing engineered systems such as pick modules and sortation systems.

• Automated Guided Vehicle Systems (AGVs) such as unit load carriers, towing, pallet trucks, fork trucks, and assembly line.

The Components of an AGVs

• The vehicle. It is used to move the material within the system without a human operator.

• The guide path. It guides the vehicle to move along the path.• The control unit. It monitors and directs system operations including feedback

on moves, inventory, and vehicle status.• The computer interface. It interfaces with other computers and systems such as

the mainframe host computer, the automated storage and retrieval system, and the flexible manufacturing system.

The Type of AGVs

• AGVs towing vehicles: usually, towing applications involve the bulk movement of product into and out of warehouse areas. Towing vehicles are better used for large volumes with long moving distances of 1000 ft or more.

• AGVs unit load transporters: are equipped with decks that permit transportation of an individual unit load on board the vehicle. The deck can be powered or non-powered roller, chain or belt deck, lift-and-lower type, or custom deck with multiple compartments. Unit load transporters are often equipped with automatic load transfer and normally used in warehousing and distribution systems where the guide path lengths are relatively short but the volumes are high.

• AGVs pallet trucks: are designed to lift, maneuver, and transport palletized loads. The vehicle is used for picking up and dropping off loads from and to floor level, thus eliminating the need for fixed load stands. It can be loaded and unloaded in automatically or manually. For load transportation, the vehicle normally proceeds along the path to a specific storage area destination, pulls off onto a spur, lowers the pallet forks to the floor, pulls from the pallet, and then automatically returns empty to the loading area.

• AGVs forklift trucks: has the ability to pick up and drop off palletized loads both at floor level and on stands, and pickup height can be different from the drop-off height. The vehicles can position its forks at any height so that conveyors or load stands with different height in the material handling system can all be served. It is one of the most expensive AGVS types, so they are applied only in systems where full automation is required. A system with these vehicles requires a more intricate path layout and a method for accurately positioning the loads on the floor or on stands. It also requires greater discipline than other systems.

• AGVs light-load transporters: They are used to handle small, light parts over a moderate distance and to distribute the parts between storage and number of workstations. They are designed to operate in areas with limited space.

• AGVs assembly-line vehicles: are adaptation of the light-load transporter for applications involving serial assembly processes. The guided vehicle carries major subassemblies such motors, transmissions, or even automobiles. As the vehicle moves from one station to the next, succeeding assembly operations are performed. The major advantage of the AGVS assembly line is lower expense and ease of installation compared with hard assembly lines. The line

can easily be changed by adjusting the guide path if necessary and by reprogramming.

Automated Storage and Retrieval Systems (AS/RS)

Automated Storage and Retrieval Systems (AS/RS) such as unit load, mini-load, person-on-board, deep lane, and storage carousel systems.An Automated Storage and Retrieval System (AS/RS) comprises the following:• A series of storage aisles having storage racks• Storage and retrieval (S/R) machines, normally one machine per aisle, to store

and retrieve materialsOne or more pickup and delivery stations where materials are delivered for entry to the system and materials are picked up from the system.

Function of AS/RS

• Receiving, identification and sorting, dispatching to storage, placing in storage, storage, retrieving from storage, order accumulation, packing, shipping, and record keeping for raw materials, purchased parts, work in process, finished product, pallets, fixtures, tools, spare parts, rework and scrap, office supplies, and so forth have traditionally been considered the functions of storage systems.

• An AS/RS attempts to achieve these functions by automating most of these procedures in a cost-effective and efficient manner.

• In general, an AS/RS performs a basic set of operations without human intervention, regardless of the specific type of system that is employed.

• Automatic removal of an item from a storage location• Transportation of this item to a specific processing or interface point

• Automatic storage of an item in a predetermined location, having received an item from a processing or interface point AS/RS components and terminology used

Type of AS/RS

• Unit load AS/RS: is used to store and retrieve loads that are palletized or stored in standard-size containers.

• Mini-load AS/RS: is designed to handle small loads such as individual parts, tools, and supplies. The system is suitable for use where there is a limit on the amount of space that can be utilized and where the volume is too low for a full-scale unit load system and tool high for a manual system.

• Person-on-board AS/RS: allows storage of items in less than unit load quantities.

• Deep-lane AS/RS: is another variation on the unit load system. The items are stored in multi-deep storage with up to 10 items per row rather than single or double deep. This leads to a high density of stored items.

• Automated item retrieval system

Why an AS/RS?

• An AS/RS is highly space efficient. Space now occupied by raw stock, work in process, or finished parts and assemblies can be released for valuable manufacturing space.

• Increased storage capacity to meet long-range plans.• Improved inventory management and control.• Quick response time to locate, store, and retrieve items.• Reduced shortages of inventory items due to real-time information and

control.• Reduced labor costs due to automation.• Improved stock rotation.• Improved security and reduced pilferage because of closed storage area.• Flexibility in design to accommodate a wide variety of loads.• Flexibility in interfacing with other systems such as AGVS, FMS (Flexible

Management System), and inspection systems such as coordinate measuring machines.

• Reduced scrap and rework due to automatic handling of parts.• Reduced operating expenses for light, power, and heat.• Helps implement just-in-time (JIT) concepts by getting the right parts, tools,

pallets and fixtures to the right place at the right time because of automatic control of storage and retrieval functions and accurate inventory management.

Types of Material-Handling Equipment

Industrial Trucks• Industrial trucks usually refer to operator driven motorized warehouse

vehicles, powered manually, by gasoline, propane or electrically. • Industrial trucks include hand trucks such as two-wheeled, four-wheeled, hand

lift, powered trucks such as tow tractors, stock chasers, forklift, tractor-trailer trains, industrial crane trucks, and sideloaders.

Industrial TrucksIndustrial trucks can go where engineering systems cannot. Their greatest advantage lies in the wide range of attachments available; these increase the truck ability to handle various types and shapes of material.

Industrial Trucks

Bulk Material HandlingBulk material-handling equipment is used to move and store bulk materials such as ore, liquids, and cereals. This equipment is often seen on farms, mines, shipyards and refineries.

On-Rails Transfer CartOn-rails transfer cart moves on the rails and can transfer heavy cargoes or equipment with the weight 1-300t between the workshops or warehouses in the factory. It is widely used in the line of metallurgy, coal, heavy manufacturing, automotive assembly, etc. In addition, there is the manual rail transfer cart or towed rail transfer cart, also called motorized transfer trolley.

ConveyorsConveyors can be used in a multitude of ways from warehouses to airport baggage handling systems.

Cranes and Hoists

1.6 Advantages and limitations. Automatic guided vehicles (AGV). Automatic storage and retrieval systems (AS/RS).

Advantages of materials handling system:

• Improve efficiency of a production system by ensuring the right quantity of materials delivered at the right place at the right time most economically

• Cut down indirect labor cost, and thereby reducing operating cost• Maximize space utilization by proper storage of materials and thereby reduce

storage and handling cost• Reduce overall cost by improving materials handling• Unobstructed Movements• Reduce damage of materials during storage and movement• Minimize accident during materials handling• Improve customer services by supplying materials in a manner convenient for

handlings• Easy interfacing with other systems• Increase saleability of plant and equipment with integral materials handling

features

Disadvantages Of Material Handling System:

• Additional investment :• Additional capital investment involved in any materials handling

system• Additional cost of auxiliary equipment• Materials handling system needs maintenance, hence any addition to

materials handling means additional maintenance facilities, costs and staff.

• Lack of Flexibility: Once a materials handling system get implemented, flexibility for further changes gets greatly reduced.

• Vulnerability to downtime whenever there is a breakdown: With an integrated materials handling system installed, failure/stoppage in any portion of it leads to increased downtime of the production system.

1.7 Materials Handling

Material Handling is a part of almost every consumer industry. No matter what product is being produced, at some point in its production cycle it is likely to be transported or stored by material handlers.

The material handling industry is essential and exciting. You have probably wondered how all the products you have ever purchased got to you in the first place. The material handling industry is responsible for how these products are stored, protected and moved from one point in the supply chain to the next, all the way to your local store or doorstep.

As products are shipped across the globe, one industry is responsible for the safe delivery of nearly every type of material, product and consumable. The material handling industry is one of America’s largest industries, and it is growing fast as companies are learning how to produce their products quicker and in greater quantities.

The material handling industry is powered by a large variety of equipment to power the supply process. Storage equipment, lifting equipment, conveyor belts, and information technology are all utilized to keep the material handling industry functioning and constantly evolving. Material handling equipment can be divided into four different categories: handling and storage equipment, engineering systems, industrial transportation, and bulk material handling.

It is important to almost every other industry and the entire global economy that the material handling process works properly. If the material handling industry just stopped working, it would cause a crisis worldwide. Thankfully, the material handling industry is always becoming more and more efficient at getting products to their destination as quickly as possible.

New technologies are presenting possibilities that were never available before, making the material handing industry a profitable opportunity for employment as the industry prepares for the challenges of today and the future. The material handling industry has opportunities for those with expertise in engineering, production and operations, manufacturing, administration, logistics, inventory control, supply chain management, systems integration, marketing and sales, information technology, customer services, and facility design.

Material handling means providing the right amount of the right material, in the right condition, at the right place, at the right time, in the right position, in the right sequence, and for the right cost, by using the right method(s).Naturally, if the right methods are being used, then the MH System will be safe and damage free. – Right amount: Because of JIT, production lot sizes have been reduced significantly and the amount and the cost of inventory is reduced. Contrary, in order to reduce the

cost of handling, the size of the unit load should be increased. Note that the right amount is not zero.In determining the right amount of material to stock in a warehouse, it is often required to determine the right amount to stock in the active picking area and the right amount to provide as safety stock.– Right material: The two most common errors made in order picking are the picking the wrong amount and picking the wrong material. For a MH System to move, store, protect, and control the right material, an accurate identification system must be included. Automatic identification is the key to accurate identification. The proliferation of bar coding technology, the emergence and maturation of radio frequency identification, and the continued development of magnetic and other identification technologies make it possible to provide the right material consistently.Reduce the number of part numbers by standardization and removing obsolete parts from the database. Simplify the part numbering system at all.

Finally, it is important to recognize that moving, storing, protecting, and controlling the right material requires a decision as to which material to move, store, protect, and control. Not all material has to be controlled in the same way. Infrequently used material of low value does not require the same degree of control as frequently used material of high value.– Right condition: The first thing that comes to mind is top quality, and the absence of damage. If quality is what the customer says it is, then we must identify the customers of the handling system. But, quality is not all that the right material means. We are also concerned about the status of the material (its location, the processing steps that have been performed, its physical characteristics, its availability for shipment, and the need for tests or inspections).It is important to ascertain what each customer requires in terms of the condition of the material served by the handling system.– Right place: When material arrives, quite often it is placed in one or more “temporary” locations or staging points before it is eventually placed in storage. Regardless of weather material has assigned or randomized storage locations, it should be placed in the right location (place). It is also important for material locations to be entered quickly and accurately in the locator system.When material arrives on the manufacturing floor, it tends to be stacked on the floor or placed in “buffers” awaiting further processing. The decisions should be made regarding whether central storage or distributed storage is best for a particular application.In the design of workstation, from an ergonomics point of view, material should be placed within easy reach; hence, stooping, bending, and stretching of operator should be avoided. This also applies for the assignment of material to storage locations for an order picker.While there might be more than one right place for material, the number of wrong places far exceeds the number of right places. Aisle is never a right place for material to be stored, staged or queuedRight time: The need for the material handling system at the right time is increasingly important due to time-based competition. Quick response systems reduce the time required to manufacture and deliver products to customers. In order for the material handling system to be able to satisfy the requirements for timely responses, excess capacity in the system is generally required. Cycle-time reduction is a primary target

in continuous improvement programs, Total Quality Management (TQM), places considerable emphasis on reducing non-value-adding activities in the process.The notion of supply chain management hinges on reducing the length of the supply pipeline by reducing the time required to move, store, protect, and control the material throughout the pipeline. Although we advocated shorter overall system time, we did not advocate using faster equipment. Being to soon can be worse than being too late in material handling. Note that, the emphasis is on the right time, not the fastest time.– Right position/orientation: Machined parts are dumped into tote boxes; subsequently someone sorts out the parts and reorients them for the next operation. Physical orientation is often accommodated by changing the design of a part, by adding locator holes or pins, automatic orientation of parts might become feasible. Not only do parts and cases need to be oriented properly, but so do palletized loads. It is important for MH System designer to maintain the proper orientation of unit loads as they make right-angle transfers on a conveyor system.– Right sequence: Work simplification teaches that productivity can be increased by eliminating unnecessary steps in an operation and improving those that remain. Also, productivity improvement can occur by combining steps and changing the sequence of steps performed. The impact of the sequence of activities performed on the efficiency of an operation is very evident in material handling.An opportunity for systems improvements through sequence changes is often the design of the control system.Right cost:Remember, the objective of the firm is to maximizes the value provided to the shareholders; it is not to achieve a minimum cost of MH. The right cost is not necessarily the lowest cost.MH System can be a revenue enhancer, rather than a cost contributor. Today, firms compete on the basis of product functionality, product quality, service quality, time, and cost. To do so, the MH System must be both effective (does the right things) and efficient (does things right). Although, a significant percentages of direct labour time is devoted to material handling, generally, the majority of the material handling cost is buried in a firm’s overhead costs. In measuring such costs, both costs incurred (investment and operating costs for MH technology and personnel) and costs foregone (costs of inventories, space, inspectors, expeditors, and other personnel not needed because of the installation of the MH System) should be measured.Reduction in losses due to damage and pilferage need to be included.– Right methods: Finally, to do all the right things right, we need to employ the right methods. But, the right method is not necessarily the most sophisticated method, the newest method, or the least expensive method. Simply stated, a method is right if it satisfies the requirements of providing the right amount of the right materials, in the right condition, in the right sequence, in the right orientation, at the right place, at the right time, and at the right cost.

Exercises:

Assignment Questions

Choose a company from any industry and analyse its warehousing and distribution

strategies. In order to perform better and improve continuously in the process and

procedures of the warehousing management, you are required to design 21st century

innovative warehouse and what are the necessary steps the company must carry out to

achieve highest efficiency?

Multiple Choice Questions

1. Many organisations hold safety stocks as part of their inventory. Which of the following is a reason for holding safety stocks? (a) To improve stock holding levels (b) To improve stock accuracy levels (c) To cater for demand forecast errors (d) To cater for a large storage capacity.

2. Which of the following categories of materials handling equipment does a ‘counterbalanced type’ belong to? (a) Gravity Conveyor (b) Fork lift Trucks (c) Picking Robot(d) Warehouse Trolley.

3. When storing materials received on a broken pallet from a supplier, the material handler should: a. return the material. b. remove and replace the pallet. c. order another pallet from the supplier. d. return only the pallet to the supplier.

4. Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of warehousing and distribution?

a. Seven Rs

b. Council of Logistics Management

c. Society of Logistic Engineers

d. supply chain logistics

5. The three main warehouse functions are: ( ), ( ) and ( ). 

Essay Questions

1) Define logistics management and supply chain management. Why warehousing is crucial in the logistics management?