Inefficiencies And Costs Associated With Material Handling

Many businesses use materials to make products for the market, and handling those materials and products is an essential component of manufacturing, shipping, and selling them to consumers. Leaders and executives need to consider how they manage their material handling, to ensure that they are not wasting valuable time, money, and other resources on this component of the business. To help, here are the five most common costs associated with material handling, which leaders should look for in their organization.

Overhandling

Materials always need to be moved, counted, sorted, stocked and prepared — that is the nature of physical inventory. However, every time an employee touches a material, they are using the time (and likely other valuable resources) which is costing their company money.

Ideally, workers will keep the handling of materials to an absolute minimum, which will help reduce associated costs. Businesses should develop processes that streamline material handling and prevent overhandling from occurring, like organizing warehouses and factories to make locating and using materials conveniently.

Companies might reach out to vendors to ensure that tasks like inspecting, counting, and sorting are completed before shipment, so employees can simply receive and store materials that are delivered.

Bottlenecks

When material handling systems are not functioning properly, employees and equipment will have periods of downtime when they must wait for the opportunity to work. Perhaps specific materials are not available in the proper quantities to ensure continuous workflow; perhaps early processes take longer than later processes, forcing some staff to work harder than others.

If the availability of materials is the issue, companies need to order more materials and more often to keep enough on hand for efficient production. If processes are to blame for the downtime, leaders might brainstorm improvements to processes or give some staff additional responsibilities to keep them occupied.

Inefficiency in operations can cost companies up to 30 percent of their revenue. If bottlenecks are occurring, business leaders need to work quickly to alleviate that pressure and keep operations flowing at a regular and profitable pace.

Damage

Rough handling can and does result in damage to materials — and that damage can be exceedingly costly. Careless or untrained staff may apply incorrect techniques; the wrong type of equipment may be in use or expired materials may simply fall apart. In any case, the damage increases a company’s expenses by forcing leaders to repair or replace essential materials and tools.

Damage is always a threat to materials, and in truth, some percentage of materials are likely to be damaged regardless of the care and training of staff. Still, businesses should work to reduce the amount they spend recovering from damage with efficient solutions. For example, impact sensors might provide information about when rough handling occurs, and reusable packaging can eliminate costs associated with packaging damage and waste.

Space Management

Space management is the art and science of industrial organization, and problems that arise from poor space management include both overhandling and bottlenecks. Companies need to maximize the spaces they use in material handling to ensure efficiency and avoid unnecessary costs.

Ideally, businesses should carefully analyze their storage and production spaces before making decisions about the type, quantity, and location of items that will fill the space. Experts tend to advise against utilizing more than about 27 percent of the cubic area of space to ensure that traffic congestion does not contribute to wasted resources. However, businesses can take advantage of tall racks, overhead racks, raised platforms, and more to optimize their space management.

Equipment

Just because an organization has a warehouse full of materials doesn’t mean that the organization needs to invest in a fleet of heavy equipment. Machines like forklifts and conveyor belts might look sophisticated, but they are undeniably expensive and certainly take up a large amount of space.

Businesses need to be certain that these tools will enhance the efficiency of materials handling before acquiring them. In most cases, simpler and less expensive solutions will provide the necessary services.

Materials handling is an unavoidable component of operations for many organizations, and the more efficient this component becomes, the more an organization can thrive. By avoiding the above five common costs associated with materials handling, business leaders can redirect funds to business growth.

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