How Important Is Material Handling In Supply Chain Management?

Material handling is a vital business function in several industries as it entails controlling, moving, protecting and storing products from the raw materials to the final distribution. The overall process can be fully-automated, semi-automated or manual depending on the scale of operations.

Supply Chain Management

Before we look into the importance of material handling in the overall supply chain management, let’s have a look at what supply chain management is.

Supply chain management is the controlling the flow of the product, as it flows from supplier to the end user, in order to achieve a competitive advantage.

All the organizations involved in the supply chain, i.e. the supplier, the manufacturer, the wholesaler and the retailer, work together in order to perform efficiently and match supply with demand. The aim is to minimize the costs and wastage of materials and reduce inventory.

The Importance in supply chain management

Although most companies may consider material handling to be a no value adding activity in their supply chain, it plays an integral role in manufacturing and logistics, which amounts to 20% of the US economy.

Without an effective material handling function, products customers are ordering from Amazon or Alibaba may never reach their doorstep.

An efficient material handling function is vital for companies which are looking to streamline their supply chain.

Here are some ways in which material handling helps in supply chain management:

Designing

Material handling function should be designed in a way that enables seamless flow of goods while manufacturing. The overall production system depends a lot on the arrangement of the activities.

If two production activities are adjacent to each other, then a simple conveyor can be used in order to transfer goods from one activity to another. But if the activities are separated, then material handling needs to be designed in a much more efficient way.

Designing material handling activity is an opportunity for the supply chain manager to somehow improve the entire process, hence adding more value to the supply chain.

Resource Allocation

A very important feature of supply chain management is allocating costs to functions rather than departments.

Since material handling is in fact a function in the supply chain, companies can evaluate how much resource they are putting in the overall process. Once it is evaluated, a supply chain manager can come up with ways on how to reduce resources that are being allocated to the function, in order to add more value to the supply chain.

Unit Load Concept

A very important concept in material handling is the unit load concept. It represents a single unit or multiple units of an item which are arranged in a way that can be dealt with as a single unit.

Gaseous and liquid materials are usually the ones that can be handled in bulks, using drums or cylinders. Although it is a very simple concept, it can significantly reduce time and efforts in material handling, thereby improving the overall supply chain.

Factory Equipment is a supplier of top quality material handling equipment to various industries. Their products include hand trucks, drum handling equipment, scissors lifts and lift tables.

 

 

 

 

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