Six areas where material handling is costing you
on June 11, 2014
While often ignored, material handling can end up being one the largest cost areas for a business. It can also present a great opportunity for profit improvement. Material handling is simply the transport of material from one point to another. This includes storage, packaging and shipping. It rarely adds value or functionality to the product and businesses seldom adequately track and quantify all the costs associated with material handling. Companies usually do not spend significant resources in material handling improvement and optimization.
The following are some typical areas where material handling is costing you more money than it should:
- Excess Handling: It would be interesting to just follow a product through its production and delivery cycle and record all the time the product is moved; moving it from a container/package to the] manufacturing line, putting it back in a container and moving it to WIP or storage, moving the material from a storage container to a packaging container. The process starts all over again when it arrives at the customers dock. Companies will use multiple material handling carts, storage containers, and shipping crates. Why not combine these into one? Why can’t the shipping container double up as the storage container and be also used to bring material out to the production line?
- Product Damage: Most companies do a pretty good job in tracking in process scrap and rework, but shipping damage is not part of most quality control programs. The most costly time to scrap a product is at shipping because the product is finished; all the value has been added. Are customers any less upset if there product is late because of shipping issues? Making sure you have the right packaging/ transport system for your product can save thousands of dollars on product damage, not to mention added efficiencies for product transport and handling.
- Safety and Ergonomics: Material handling represents one of the largest categories for accidents and work related injuries. Moving and lifting heavy and awkward material puts stresses and strains on the human body as well as creating risks for trauma type injuries. Workman’s comp, lost time, retraining, is all significant costs associated with any accident and injury. Many of these injuries can be avoided with improved material handling systems.
- Packaging Materials: Often the least expensive materials are initially chosen for packaging and handling, but the paradox is that from a material usage standpoint this could be the most expensive option. Are packaging materials being used once then disposed? A well designed reusable system could save money in the long run as well as be more environmentally friendly.
- Inventory Costs: Poor material handling systems can indirectly create more inventory as more material is put in line to insure all operations have material flowing to them.
- Storage Space: Factory space is expensive and sometimes it is impossible to add more space to a facility. Minimizing storage space is the same as expanding your factory. You have more room to make more products instead of more space to store it. Reducing inventory helps reduce space, but even something as simple as collapsible or stackable containers will reduce storage space for your packaging containers.
Packnet has developed a variety of custom packaging solutions for heavy industrial applications for over 20 years. Investing in custom packaging solution can be a sound investment that improves your profits as well as increases employee satisfaction. Packnet offers a free no-obligation packaging assessment. Take advantage of this offer and see how much your current packaging is really costing you.