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:
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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 Objectives
1.1 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 Systems
2.1 The unit load concept.
2.2 Selection of the most appropriate equipment in particular situations
2.3 Integration of warehousing systems.
2.4 Economic analysis of systems.
Topic 3. Health and Safety Aspects in Warehouse and Material Handling Systems
3.1 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 Management
4.1 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. Transportation
5.1 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 Management
6.1 Types of warehouses
6.2 Layout and design
6.3 Utilization of warehouse space
6.4 Warehouse management system.
Topic 7. Customer Service
7.1 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 Technology
8.1 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 Objectives
1.1 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-today 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 ‘warehousekeeper’.
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 transport
Definition: 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
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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 Handling
Having 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:
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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.
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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.
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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.
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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.
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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.
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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:
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Through the choice of suitable packaging, it is possible to produce directly from the
packaging or into the packaging without intermediary processing procedures.
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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].
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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
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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
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Basic considerations include:
• Soft materials
• Plastic
• Environmental issues
• Recycling (reverse logistics)
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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 equipment
The 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 equipment
It is usually non-automated storage equipment. Products such as pallet racking,
shelving, casters and carts, belong to storage and handling.
Engineered systems
Engineered 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.
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Automated Guided Vehicle Systems (AGVs) such as unit load carriers,
towing, pallet trucks, fork trucks, and assembly line.
The Components of an AGVs
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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
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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 materials
One 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
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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
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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 fullscale 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?
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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 Trucks
Industrial 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 Handling
Bulk 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 Cart
On-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.
Conveyors
Conveyors 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:
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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:
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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 queued
Right 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 rightangle 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?