III.

INTEGRATED LOGISTICS

Warehousing - A logistical Challenge - Material Handling System - Role of Material

handling in logistics, Material Handling guidelines, Material handling equipment’s- Material
Storage -Principles, Design, Methods - Reverse Logistics – Green Logistics.

WAREHOUSING: CONCEPT
A warehouse is a place used to store inventory. Most tasks that occur in a warehouse are
related to inventory management. These tasks include collecting receipt of products, issuing
of products, recording changes and tracking the movement of the inventory. At times, the role
of a warehouse includes processing of the inventory from entry to exit, and, at times, it is
limited to providing storage facility for products in transit from the point of origin to the point
of destination.

Nowadays, warehouse management has an important role in effective customer service.

Warehousing can play a pivotal role in minimizing supply chain inefficiencies, improving the
value addition during the logistical flow of products and inventory management that includes
consolidation and customization of inventory.

Before the goods are shipped to the point of consumption, a warehouse serves a place where
the goods can be stocked temporarily. A warehouse is an important cog in the supply chain of
products as it forms a crucial part of the chain. If a warehouse is eliminated from the supply
chain, the entire logistics industry would come to a standstill. The smooth supply of goods is
only possible because of warehouses. They form the spine of the supply chain. The size of the
warehouses varies depending upon the number and nature of goods.

Warehousing Elements:

Whether the purpose is strictly storage or storage plus order fulfillment, warehouses use
specific elements that help manufacturers, distributors, and retailers monitor inventory and
store it safely. An overview of basic elements includes:

 Shelving and rack systems that offer maximum storage capacity and easy product
access.

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  A climate control system for the product being stored. This is particularly important
for frozen products or those requiring refrigeration, including certain pharmaceutical
or laboratory products, and others that degrade if exposed to too much heat.

 Inventory control software that tells the product owner – who isn’t necessarily the
building owner – where all individual units are in the system at all times.

 Equipment that can move products from point A to point B – forklifts, pallet jacks,
bins that hold products for orders, and conveyor belts, for example.

 Shipping supplies for order fulfillment.

 People who load products into a warehouse and others (“pickers”) who fill orders in a
true distribution centre, plus those who manage the facility and operation.

 Security to protect stored products.

 Access to cost-effective transportation to bring products in or move them out as

orders are fulfilled. That often means easy access to interstates, rail lines, or airports.

WAREHOUSE MANAGEMENT SYSTEM:

Warehouse Management System (WMS) is the cornerstone of the logistics system. A WMS
constitutes an internal system of the logistics companies, which is highly configurable to
control and manage aspects of storage, distribution, others. A robust WMS is what an
organization needs for an efficient and productive operation, which includes inventory
balance, manage materials, pickup process and auditing.

Importance of WMS:
Warehouse management process is important to meet the most primary business objective,
which is to keep the operations cost low as possible and maximize the profit margin.

1. Inventory Control and Management: The common challenge of most businesses is to

maintain the accuracy of the inventory. An effective WMS will help to manage the inventory
in a fast, easy, and efficient way. It can improve the accuracy of the inventory by decreasing
the order cycle time and improve the order fulfillment. WMS will help to decrease the
inventory level by tracking every aspect of the inventory using real-time information. It will
also serve all clients as WMS facilitates quick response to customers’ demands and queries.

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2. Centralized Location: A warehouse management system saves huge time and cost by
getting a centralized storage location. Storage, shipping and distribution are much easy to
have a centralized location as it can overcome the production gap. It can reach the supplier
also the target market. Thus all can have a continuous flow of goods in and out which
determines the firm’s logistics supply chain system. The centralized location of logistic
warehousing gives the opportunity to have security stocking. It means the manufacturer can
fulfil customer’s orders on time and deliver the right product at the right time.

3. Improve production quality: The production quality will improve by effective inventory
quality and management. The manufacturer can stay up to date with vendor, suppliers and
better track the raw materials or product shelf life. Thus not monitoring the quantities but the
entire production process. It is now easier to get rid of defective products and ensure a high
quality finished goods. By improving the production quality, the manufacturer can also
maximize the company productivity as WMS boosts speed, efficiency, and quality control.

4. Leverage seasonal growth: It takes utmost advantage of the festive and other shopping
seasons to scale the operations. Since it is easy to track the entire production process with
real-time information, the manufacturer can also monitor consumer behavior during peak
season. The tracking system can handle client problems and deliver high-quality customer
service. Warehousing and logistics ensure easy tracking of the shipment through automation
and real-time information. It means that, manufacturer will have better accuracy and reduce
customer complaints by creating availability of what they need. Thus leveraging the seasonal
growth and boosting up operations without additional cost. It means that gaining new
opportunities to hit the high sales number. By having right warehouse management systems,
the manufacturer can sell faster and boost profit which means the high return of investment.

5. Risk management: Warehouse management system is important to handle the fluctuations

in demand and supply and avoid losses. Handle risks with the help of real-time information
on an increase or decrease in the demand of the product. Make the selling decisions
considering the violent rise or fall in prices.

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Materials Handling System:
Materials handling occurs whenever a material is moved may be in a manufacturing, dis-
tribution (warehouse), or office environment. Materials handling also occur during prepara-
tion for shipment, transportation may be by sea, air or land, and moving material in and out of
carriers.
International Material Management Society has defined the Materials Handling as “Materials
handling is an art and science involving the movements, packaging and storing of substances
in any form”.

Objectives of Materials Handling:

As we know that with the rise of factory system, men continued to develop handling equip-
ment to perform jobs where human or animal muscles were insufficient in either capacity or
speed. Later on it becomes important to reduce materials handling labor in order to reduce
production cost. Therefore main objective of materials handling engineer is to reduce product
cost the one overall goal. Materials handling equipment is not production machinery, but is
auxiliary equipment that improves the flow of material which in turn reduces stoppages in
production machines and thus increases their production.

Objectives of a proper materials handling system are:

1. Reduction in Cost: Reduction in total cost of production can be achieved by either
reducing materials handling or by improved handling procedure or both. The objective of
reduction in cost of production through improved materials handling can be achieved by:
(a) Reducing material handling labor.
(b) Material handling work should not be assigned to skilled or semi-skilled labor.
(c) Reducing indirect labor expenses on activities connected with storage, inspection, quality
control, repair, tool room, shipping etc.
(d) Reducing damage of materials during handling.
(e) Better utilization of space.
(f) Reducing in process storage.
(g) Increasing productivity.
(h) Reducing expenditure on packaging and other protective devices.
(i) Decreasing inventory.

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2. Increase in Capacity: Improved materials handling system results in increase of capacity
by better utilization of space. Improved handling system can increase the capacity in the
following ways:
(a) By better utilization of space: Racks or containers that stacks item upon each other
making full use of air space should be preferred. From this point of view use of overhead
cranes, conveyors, lift trucks etc., are very suitable.
(b) By reducing travel space or excessive wastage of space: For this purpose a study of flow
of materials between operations should be done considering the flow paths, volume of
material, timing etc. This study may help in reducing travel time and space requirements.
(c) By improving equipment utilization: This can be achieved by ensuring regular supply and
distribution of material. This will reduce the idling of machine.
(d) By faster loading or unloading: This can be achieved by employing conveyor system,
cranes, loaders, rail road cars, tipping trucks etc.

3. Improvement in Working Conditions:

(a) Safety aspects: Safety of men, material and associated equipment not only prevents loss of
money but also enhances the moral of workers.
(b) Easy working: By using proper handling equipment heavy jobs can be handled with ease,
faster speed and at a constant rate throughout the period of production. This enables high
morale and lower workers turnover.
(c) Fool proof operation: Due to absence of manual handling, there are no chances of con-
fusion resulting in placing of material at wrong location or disruption of production.

4. Improved Customer Service: Customer’s service will be improved by following proper

and improved materials handling system which will enable regular and timely market supply
by avoiding disruption in production schedule. These are the main sources of good customer
service.

Functions of Materials Handling:

The basic function of material handling-the movement of material- is as old as man, but the
need of materials handling developed from the development of factory system, which started
from the industrial revolution which took place in late eighteenth and early nineteenth
centuries.

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The industries, supermarket, offices, construction projects and the banks all are engaged in
moving things. In early days man was physically handling the material, however over a
period of years he has started applying mechanical principles like lever, wheel, pulley etc.

The material handling, though does not add value to a product, it generally adds significant
element of cost. Material handling generally costs between 20 to 35% of the cost of the
product, with certain exceptions. Earlier, it was a general belief that most of this cost is
inevitable and cannot be easily avoided, but now-a-days need for reduction in materials
handling costs through systems approach is being realized.
Not only cost, majority of production time is also consumed in handling materials before,
during and after the manufacture. The materials handling time and cost can be reduced by
proper selection, operation, maintenance and layout of these handling devices.

The materials handling problem must be studied at the time of planning of various machines
and tools to be required and before the erection of factory building. Materials handling is a
prime consideration in designing new plants, and existing plants can also be modify by the
application of modern materials handling devices. These devices increase output, improve
quality, speed up the deliveries and therefore, reduces the production cost.

Costs Included in Material Handling:

Materials handling includes following costs:
Materials handling cost = cost of handling + cost of transportation + cost of packaging + cost
of space + cost of handling equipment including operation, maintenance and depreciation etc.
In any industry materials handling is of following 3 types:
1. Handling of individual part or unit by men,
2. Handling in room, department, or plant
3. Handling of materials during the entire process of production and distribution, starting
from raw material source, going through the factory and distribution network to the ultimate
customer and beyond, to waste disposal and recycling.

This can be shown as below:

Raw material → Supplier → Transportation → Receiving → Storing → Issue →
Manufacturing or fabrication → Packaging → Shipping → Dealer or Distributors warehouse
→ Retailers → Customer → Disposal → Recycling.

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Since materials handling is concerned with the movement of materials, every movement has
following elements:
1. Picking up the load,
2. Transporting the load, and
3. Setting the load down.

Systems Concept for Materials Handling:

Systems concept for materials handling means, adopting a materials handling system from
overall optimization point of view. This means that it is not necessary to buy the latest
materials handling equipment, materials handling engineer must put all the elements of the
system together to see whether it is profitable for the enterprise. Materials handling engineer
must have basic criteria for selecting a handling system of adequate monetary pay back, if all
other things are equal. Systems approach for materials handling demands that all elements of
problem, its cause and effect be analysed so as to accomplish to desired objectives.

Systematic analysis should lead to solutions which satisfy the following important conditions:
1. There should not be any other problem created by the new system proposed to be
implemented.
2. Amount of return on investment must justify the proposed handling system.
3. The system must take care for reasonably long period of time, and that it must permit
expansion or modification without much cost and difficulty.
4. The new system must be simple to implement so that it is easily acceptable by man-
agement as well as by operators.
In short the new handling system must have technique and method which can easily fit the
existing system and has least total cost of the system and meets the ultimate objective of the
materials handling.

By following the systems approach, materials handling engineer must achieve the following:
1. Increase the production effectiveness by having right quantity of material, at right places at
the right time, by avoiding delays and following the orderly flow of material or item. This
helps in improving the productivity.
2. Minimize unnecessary labor and make the enterprise more profitable.
3. Reduce damage due to materials handling and thus saves expenditure due to scrap and
rework. This can be achieved only if we have sufficient data related to the damages e.g.,

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identification of product or item, whether in transportation, storing, picking or setting down,
packaging material or method, type of container etc.
4. Reduce accident rates.
5. Effective utilization of space by proper layout planning.

Steps in Analysing Materials Handling Problems:

Following factors should be studied to analyze the materials handling problems:
1. Establish the scope of the study.
2. Pinpoint the areas of plant layout to be covered by the study.
3. Determine volume expected to be handled per unit time by the new system.
4. Nature and type of the materials to be handled.
5. Determine the handling cost of the items being handled by the present system.
6. Determine details of distance to be moved, with details of curves, slopes etc.
7. Determine, how to move the material i.e., in tray, bundles, pallets etc.
8. Determine the details of the equipment used viz., capacity, speed, flexibility etc.
9. Determine the time taken for the movement.
10. A thorough survey should then be made considering the systems approach.
11. Alternative systems should then be evaluated from all angles including financial,
physical, safety, acceptance by the management and operators, and its effects on working,
safety and overall environment.

Activity Areas of Materials Handling:

For effective materials handling, materials handling engineer must look after handling work
in different areas, some of them are:
1. Packaging and packing of raw material for the industry.
2. Loading and transportation to the plant.
3. Unloading activities.
4. Receiving, storage and issue of material for production.
5. In-process handling.
6. In-process storage.
7. Work-place handling.
8. Infra-departmental handling.
9. Inter-departmental handling.
10. Intra plant handling.

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11. Packaging.
12. Warehousing.
13. Packing.
14. Loading and transportation to customers/distributors/dealers place.

Relationship of Materials Handling with Other Departments:

In the past materials handling was neglected and due importance was not given to this
function in the industries. This was simply due to lack of awareness on the part of
management. But now a day this aspect is being given its due importance and materials
handling engineers play a vital role in the industries. In order to carry out the functions of
materials handling, the personnel of this department work in close association with other
departments of the enterprise, such as with the following:
1. Purchasing Department: To facilitate in deciding the size of order, packaging, packing and
transportation system from suppliers place to the plant.
2. Stores Department: Handling and storage of materials and supplies is determined by the
characteristics of the items and the nature of storage methods.
3. Production Control Department: Handling department must cooperate with production
control department in following fields:
(a) Directing path of material movement.
(b) Moving material in lots or containers of predetermined sizes.
(c) Making optimum use of mechanical handling in picking, accumulation and loading.
(d) Meeting production requirement with the handling equipment.
(e) Materials handling system itself must incorporate features of production control, in-
ventory control and accounting.
(f) Moving materials as per schedule and to avoid rush deliveries, partial loads or duplicate
moves.
4. Industrial Engineering Department: Since materials handling function is a division of the
broad field of industrial engineering, materials handling engineer has to work in close
cooperation with other industrial engineers dealing different functions, e.g.;
(a) With the process engineering in designing the manufacturing process to establish line
balancing, in-process handling, and storage operations.
(b) With the methods engineering in designing the individual work places, the methods used
in performing the operations.

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(c) With the work standards personnel in establishing work standards for materials handling
operations for using as the basis of incentive schemes for material handlers.
(d) With plant layout personnel in developing the overall flow pattern and the arrangement of
the facilities in the plant.

Relation between Plant Layout and Materials Handling:

There exists a very close relation between plant layout and materials handling. The method of
handling materials definitely influences the plant layout and the plant building. If all the
devices required for a particular set of operations are determined but fail to arrange them
properly then it is said that layout is not a good one. Effective layout means minimum
handling operations.
In the plant:
(i) If materials are to be moved by hand operated or power trucks, passages are provided for
their operation.
(ii) If materials are to be moved by overhead cranes, passages are almost missing but the
overhead space is unobstructed.
(iii) If materials are to be moved by pipe lines, ducts such as paint in automobile body
building plants and saw dust as in wood working plants, arrangement should be made for
their methods of handling.
(iv) If the building is multi-storied, elevators, and conveyors of different types may be
utilized. Gravity conveyor may be utilized in moving material in a multi-storied building or
one built on a sloping grade.

Modern materials handling technique makes possible a continuous flow of materials and
work in process between building and from one floor to another, thus removing restrictions of
space and building construction, which was handicapped in the past. Today in advanced
plants handling devices operated by electronic controls are used.
Position of Plant Layout and Materials Handling Departments in an Organisation:
Position of plant layout department and materials handling department vary from
organisation to organisation and depends upon its size and type of product manufactured.
The functions of these departments are generally assigned to:
1. Plant engineer/manager
2. Plan layout engineer/manager
3. Industrial engineer/manager

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4. Production engineer/manager
5. Process engineer
6. Materials handling engineer.

It has generally been observed that most of the organizations assigned the job of plant layout
and materials handling to either ‘Plant Engineering’ departments or ‘Industrial Engineering’
along with other functions as illustrated hereunder:
1. Plant Engineering:
(a) Plant construction,
(b) Housekeeping,
(c) Repair and maintenance,
(d) Safety and security,
(e) Facility design, and
(f) Utilities.

2. Industrial Engineering:
(a) Cost and economy studies,
(b) Work-study,
(c) Operation research,
(d) Systems engineering, and
(e) Facilities designing.

Basic Materials Handling Systems:

1. Equipment Oriented Systems:
(a) Industrial Truck Systems: Platform trucks and skids, fork trucks and pallets, and tractor-
trailers.
(b) Conveyor systems.
(c) Overhead systems: Overhead cranes, and monorails.

2. Material (Load) Oriented Systems:

(a) Unit handling system.
(b) Bulk handling systems: conveyors, power shovels, scoops, cranes, draglines, and con-
struction equipment.
(c) Liquid material handling systems.

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3. Method (Production) Oriented Systems:
These are described in terms of the types of production in which they are used:
(a) Manual system.
(b) Mechanized or automated systems,
(c) Mass production handling systems.
(d) Job shop handling systems.

4. Function Oriented Handling Systems:

(a) Transportation systems: For horizontal motion.
(b) Elevating systems: For vertical motion over vertical or steeply inclined routes.
(c) Conveying systems: Horizontal, vertical or combined motions.
(d) Transferring systems: Horizontal, inclined or declined motions through the air.
(e) Self-loading systems: Intermittent motion with machines that pick up, move and set down,
i.e., unit load systems.

Principles of Materials Handling:

Since it is not possible to acquire experience by a materials handling engineer himself on all
types of problems, he has to take advantage of others’ experience. On the basis of-experience
gained by himself and also by others he should try to solve the handling problems.
On the basis of these experiences facts, systematic approach and other ideas, certain
principles have been developed. These principles have been implemented, practiced and
perfected during several years. These principles of material handling are useful in all the
fields may it be engineering, office or elsewhere.

The word ‘principle’ can be defined as a prescribed guide to accepted procedures established
through past practice and is accepted as authoritative by practitioners, and without which a
system would be less effective. Therefore, when these principles of materials handling are
applied by materials handling engineer, even if he is not much experienced, he can find
correct solution faster.

These principles are general guides, and can be put to use by means of different activities. In
the table below, principles of materials handling are given, and against each of them activities
necessary for implementing the principle are indicated.

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(A) Principles Related to Planning:
1. Planning Principle: All material handling activities should be planned.
(i) Material should be placed on pallet or any other support and not on the floor directly.
(ii) One container should be used throughout and avoid frequent changes.
(iii) Utilize truss capacities and ceiling heights.
(iv) Provide sufficient storage space at the work-place.
(v) Each operator must be instructed/trained to follow correct method.
(vi) Plan for scrap removal means.
(vii) Efforts are made to combine operations like inspection during productive operation.
(viii) Minimize movement of men and material.

2. Systems Principle: Handling activities be integrated and coordinated. Handling activities

are receiving, storage, in-process handling, inspection, packaging, warehousing, shipping and
transportation.
(i) Consider all the handling activities while giving a detailed consideration to an activity.
(ii) Material flow between work areas is planned.
(iii) Integrated activities into the handling system.

3. Simplification Principle: Reduce, combine or eliminate unnecessary movements and/or

equipment.
(i) Motion Economy principles by applied.
(ii) Reduce or eliminate, long and complicated movements.
(iii) Deliver the material at correct spot in first instance.
(iv) Eliminate re-handling.
(v) Reduce variety of equipment.

4. Material Flow Principle: Material flow pattern must be determined by operation sequence
and pattern of equipment arrangement.,
(i) Avoid overcrowding.
(ii) Eliminate obstacles in the flow.
(iii) Move in a direct path and avoid back tracking.
(iv) Move greatest weight and/or bulk for least distance.
(v) Minimize movements between floors,, and buildings.
(vi) Plan proper locations of sub-assemblies.

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(vii) Plan related work areas close together.
(viii) Avoid traffic jams and take necessary precautions for cross traffic.

5. Gravity Principle: Utilize gravity where possible.

(i) Use slides, chutes, hoppers etc. where possible

6. Unit Size Principle: Increase size, quantity, weight of the load handled. Since larger the
load, lesser will be the cost per unit handled.
(i) Handle unit loads. Unit loads described separately.
(ii) Use containers.
(iii) Containers should be standardized.
(iv) Use standardized pallets.
(v) Optimize unit loads.

7. Space Utilisation Principle: Optimum utilization of building space. As space means

money.
(i) Equipment or work area may be kept in reasonably close position.
(ii) Inventory at temporary stores must not be kept too much.
(iii) Utilize height of building and use rack to permit higher stocking.
(iv) Use concept of economic order quantities and economic lot sizes.
(v) Dispose obsolete or scrap items in time.
(vi) Use handling equipment requiring minimum aisles.
(vii) Use mobile or overhead equipment.
(viii) Use collapsible containers to save space required by empty ones.

8. Safety Principle: Safe handling methods and equipment for better working conditions and
to avoid unsafe conditions.,
(i) Provide adequate guards and other safety devices.
(ii) Handling equipment is kept in good operating conditions.
(iii) Highlight handling hazards, moving vehicles or danger areas.
(iv) Make arrangement for removal of undesirable fire, dust, smoke etc.
(v) Emergency switches or controls be provided.
(vi) Proper instructions and training for safe operation to the operators.
(vii) Keep floor clean.

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(viii) Provide good housekeeping.
(ix) Keep aisles clear.
(x) Do not overload handling equipment or devices.

(B) Principles Related to Equipment:

9. Mechanization Principle: For increasing efficiency use mechanized handling equipment
but to the desired extent only.
(i) Mechanization is useful for large quantities, long, frequent, high effort or hazardous
moves.
(ii) Replace excess manual handling or where large numbers of persons are engaged on
handling jobs.
(iii) Moving heavy containers.
(iv) Design containers suitable for mechanical handling.
(v) Use mechanized communication where required.

10. Flexibility Principle: Equipment’s capable of handling variety of tasks be used.,

(i) Buy versatile and flexible equipment.
(ii) Buy adjustable racks.
(iii) Utilize accessories and attachments.

11. Equipment Selection Principle: Select equipment very carefully considering all aspects of
materials, movements, and the method.
(i) Select versatile equipment.
(ii) Cost per unit to be handled should be compared.
(iii) Consider standardization aspects.
(iv) Equipment should be economical on long term basis.

12. Standardization Principle: Standardize equipment as well as methods.

(i) Standardize the equipment, containers and pallets.
(ii) Standardize methods.
(iii) Train employees on standardized equipment and methods.

13. Light Weight Principle: Reduce weight of equipment.

(i) Equipment should have less dead weight to pay load ratio.

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(ii) Use light weight pallets, skids and containers.

14. Motion Principle: The handling equipment should be kept in motion i.e., minimum period
for loading, unloading or other idleness.
(i) Reduce loading/unloading time.
(ii) Use mechanical means or other means for quick loading and unloading.
(iii) Use tractor trailers, so that tractor can be used for other work while the trailer is being
loaded/unloaded.
(iv) Minimize downtime.

15. Idle-time Principle: Reduce idle and unproductive time.

(i) To avoid idle manpower, deliver material at a desired rate.
(ii) Do not use productive labor for handling.
(iii) In order to utilize manpower fully, more than one machine can also be allotted to one
man.
(iv) Equipment should be fully utilized.

16. Obsolescence Principle: Obsolete methods and equipment be replaced by efficient

methods and equipment.
(i) Obsolete equipment be identified and replaced by new equipment.
(ii) Beware of new technological developments and remain in constant touch through books,
journals, attending, conferences etc.
17. Maintenance Principle: Preventive maintenance practices are adopted for handling
equipment.
(i) Preventive maintenance is carried out to avoid breakdowns.
(ii) Carry out schedule maintenance and daily inspections and take remedial measures.
(iii) Set up regular maintenance schedule.
(iv) Train operators for proper operation and maintenance.
(v) Maintain adequate spare supplies.
Principles Related to Operation:

18. Control Principle: Control production and inventory through materials handling
equipment.
(i) Provide direct mechanical paths for materials movement.

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(ii) Materials be moved in lots, batches, containers of a predetermine quantity or size.
(iii) Materials handling system should have built in features of controlling production,
inventory, and accounting.
(iv) Material is moved as per schedule.

19. Capacity Principle: Production capacity should be fully achieved.

(i) Ensure uniform desired rate of flow.
(ii) Equipment is operated at optimum rate.
(iii) Plan to utilize forward as well as return runs of the equipment.
(iv) Vehicles, conveyors, containers etc. should be loaded to full capacity.
(v) Utilize overhead space.
(vi) Aisles should be obstacle free and wide enough for speedy movement.
(vii) Store items not affected by weather.

20. Performance Principle: Performance of handling is measured in terms of cost per unit
handled, safe working condition, and increase in production rate or reduced manpower for
handling.
This is the effect of all preceding activities.

Limitations of Material Handling:

While evaluating a material handling system its disadvantages must also be considered.
Some of the disadvantages are:
1. Additional capital investment.
2. Loss of flexibility: A mechanical system is generally designed for a particular size, shape,
volume and for a particular sequence of operation and hence it is difficult to change, and
require additional cost for modification for likely range of changes in the product or
production techniques.
3. Breakdown: Being mechanical and electrical system, the handling system may breakdown
at times, and may take some time for repairs.
4. Every mechanical handling system requires timely maintenance, which means addition of
skilled maintenance manpower, maintenance spares, cost of maintenance time required for
servicing and arrangement during this period to continue production.

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Role of logistics equipment’s – Material handling devices:
Material handing is the general term for the machines and equipment used for the purpose of
making cargo handling work more efficient and using fewer labor resources in cargo
handling work that places a large burden on workers. These machines and equipment are
called material handling devices. This section describes the material handling devices used at
logistics worksites by the work they perform.

Equipment Used in Logistics: Material Handling Devices

There is a large amount of heavy labor involved at logistics worksites, such as in loading,
unloading, and transporting cargo. Material handling device is a general term for the
machines used to make this logistics work more efficient. These machines perform a variety
tasks including moving raw materials, works in process, and completed products. There are
many material handling devices used at logistics worksites. These include forklifts, carts,
pallets, conveyors, conveyance robots, sorters, picking systems, and automated warehouses.

GUIDELINES ON MATERIAL HANDLING:

The foundation for a safe workplace starts with policies and procedures that senior
management must put in place. A comprehensive health and safety policy would include the
appropriate level of guidelines on material handling and the associated employee training
program. A key portion of the policy would be the safety compliance activity that is essential
for the business to operate. Most importantly, the policy would inform on the shared
responsibilities of each employee in keeping the workplace safe.

Safety Training for Materials Handling:

There is employee safety risks involved with materials handling in distribution centers,
warehouses, and shop floors and loading docks. The mitigation of safety risks starts
with proper training in awareness, procedures and safety equipment. Safety training should be
mandated for any new employees involved with lifting, carrying, loading or
transporting materials in any form. In addition to new hire training, the safety risks and
potential safety compliance rules may require re-certification on an annual or other regular
time cycle.

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Materials Handling Safety Procedures:

The day to day handing of materials continues free of accident or injury when safety
procedures are consistently followed. Procedures start with awareness of the specific
materials handling risks involved and the proper safety equipment for the situation.
Procedures would cover the types of material, and the conditions of the work area.

Here’s a list for safely lifting and moving materials:

 Maintain the correct posture: avoid bending over and keep lifts close to the body

 Lift in a careful, deliberate manner and avoid any sudden lift movements

 Never lift materials from a sitting position, or twist to pick up a heavy object

 Use the correct grip on objects; lifts should be shoulder high and with full grasp
of the hands

 Get assistance from co-workers to avoid successive lifts of heavy objects

 Always make use of conveyors, slides or other devices, to avoid unnecessary

lifting or pushing of objects

 Always go around a blocked pathway, never step over an obstacle while carrying
material

 Maintain a clear line of site; objects should not block vision; lift only where there
is sufficient lighting

 Whenever possible; reduce load sizes, adjust bulky objects to ease movement

 Regularly stretch back and leg muscles during the day and keep in good physical
shape

Benefits of Material Handling Systems: The latest developments in material handling

systems support the needs of various companies that require handling equipment. With the
complex material handling processes, it is truly a great advantage to have a feasible material
handling system that adapts to the unique needs of operators and industrial companies. The
following are the helpful benefits of using material carts and trains in transporting containers
or unit loads from the warehouse to the building site:

 save money
 increase safety

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  reduce downtime
 improve ergonomics
 increase efficiency
 reduce fork transport traffic
 increase capacity
 save space
 increase flexibility
 improve the work environment

What is material handling and storage?

Material handling is the movement, protection, storage and control of materials and products
throughout manufacturing, warehousing, distribution, consumption and disposal.
The material storage system allows materials to be stocked for a specified period of time,
before they are re-introduced, or are introduced for the first time, into the automation system.
Each of these material types is typically stored under different conditions and controls.

Storage is defined as ‘the marketing function that involves holding goods between the time of
their production and their final sale.’ It bridges the gap between the time when goods are
produced and the time when these are ultimately consumed as there is always a time gap
between production and consumption. Storage involves making of proper arrangement for
retaining goods in perfect state without losing properties and qualities till these are needed by
the ultimate consumer and taken to the market. It creates both time and place utilities. “If
transportation and communication define the length and breadth of the market area, then
storage and its accompanying function of finance give depth to the market.” In simple words,
storage is the process of preserving goods from the time they are produced till they are
needed for consumption.

Functions, Benefits and Importance of Storage:

The importance of storage can be recognized with the various benefits/functions it provides:
1. Creation of Time Utility: There are products which are produced continuously throughout
the year while consumption is seasonal. Storage enables goods to be made available to buyers
whenever they are in demand.

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2. Creation of Place Utility: Another function of storage is to make goods available to a
buyer at his place of business when he needs them. It creates place utility by warehouse
location, e.g., a retailer can obtain goods within a few hours or minutes by contacting the
wholesaler’s storage.
3. Finance Function: Storage helps to obtain or raise loans by providing collateral security
of the goods stored.
4. Creation of Form Utility: Certain commodities improve in quality or desirability while in
storage, e.g., curing of tobacco, liquor etc. Thus, storage created form utility in certain goods.
5. Stabilizing Prices: Another function of storage is to stabilize prices by making the goods
available in the market whenever there is demand.
6. Regular Production: Storage performs the function of smoothing out irregularities in
production. In the present age of competition, every manufacturer tries to produce in
anticipation of demand so as to provide free supply in the market well in time.
7. Ability to Face Natural Calamities: Storage enables the society to face natural calamities
such as floods, famine, drought etc. In such emergencies, commodities can be made available
from the storage.
8. Reduction of Risk: Storage reduces the risk of owner of goods as the owner of goods can
store merchandise with reputed warehouses which absorb a part of the risk.
9. Saving in Transportation Costs: Storage allows accumulation of stocks to be transported
in bulk quantities so as to reduce the transportation costs.
10. Economies of Large-Scale: Storage enables a concern to achieve the economies of large-
scale production, large-scale buying and selling, etc. as the goods may be kept in stores.

Need for storage: The need for storage arises mainly because of the time gap between
production and consumption of goods.
The need for storage is highlighted by the following reasons:
1. In the present competitive world, production is carried on in anticipation of demand and
not necessarily for immediate sale. Thus, the producer has to make sufficient arrangements
for the storage of goods.
2. Many commodities are consumed regularly throughout the year while their production has
seasonal character. Such commodities have to be kept in storage in the season when they are
available in plenty to be used or sold on demand.
3. Some commodities have regular production but seasonal consumption. Such commodities
also need storage for the period when there is no demand.

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4. Certain commodities have to be stored to improve their quality such as curing of tobacco,
liquor etc.
5. Raw materials have to be stored to enable continuous production without stoppage.
6. Storage of goods is a necessity during depression when there is little demand and prices are
going down.
7. Middlemen have to keep stock of goods to enable them earn profits by storage of goods
and making the goods available on demand.
8. Storage is needed to adjust demand and supply of goods in the market.

What is reverse logistics?

Reverse logistics is defined as the practices and processes set up for organizing product
returns from points-of-sales to the manufacturer in order to repair, recycle or dispose of these
articles in the most cost-effective way. It is “the process of planning, implementing, and
controlling the efficient, cost effective flow of raw materials, in-process inventory, finished
goods and related information from the point of consumption to the point of origin for the
purpose of recapturing value or proper disposal. More precisely, reverse logistics is the
process of moving goods from their typical final destination for the purpose of capturing
value, or proper disposal.

When a manufacturer’s product normally moves through the supply chain network, it is to
reach the distributor or customer. Any process or management after the sale of the product
involves reverse logistics. If the product is defective, the customer would return the product.
The manufacturing firm would then have to organize shipping of the defective product,
testing the product, dismantling, repairing, recycling or disposing the product. The product
would travel in reverse through the supply chain network in order to retain any use from the
defective product. The logistics for such matters is reverse logistics.

Why are products returned?

Returns happen for a variety of reasons, which include:

 The customer is unhappy with the product because it is not what they were looking
for or what they expected.
 The product is faulty or defective.
 The item is obsolete and has outlived its serviceability.

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  Overstock that must be returned to the warehouse installation. This stock is vital for
the running of a business, although they are just used in specific occasions.
 Seasonal stock, in other words, products that are only sold during certain time periods
(like seasonal wear or toys during Christmas) and that must be stored the rest of the
year.

Returns entail shipping and received goods must be sorted according to their SKU and
condition. This has repercussions on staffing hours, the extra space needed to do this work
and means higher associated costs.

Eco-friendly reverse logistics:

There is a close connection between reverse logistics and environmental protection. It focuses
on managing the products, components and materials that have been used and discarded and
of which the manufacturer bears some sort of responsibility. Its objective is to reuse these
products and, where possible, reduce the final amount of waste.

Working with scrapped products stops fresh raw materials from having to be used to
manufacture new items. This results in a direct reduction of manufacturing overhead, as well
as less power usage and lower levels of air and water contamination. For reverse logistics to
be as efficient as possible, it is also fundamental to involve the consumer. Businesses are
responsible for being part of this process, for example, by creating campaigns that promote
and encourage the active role of the people in a community in recycling.

Benefits of reverse logistics:

Setting up reverse logistics provides companies with the following advantages:

 Minimize the environmental impact. Reuse of materials in manufacturing processes

helps stave off the misuse of unprocessed raw materials and requires less power. This
practice will directly benefit society as a whole.
 Improve corporate image and customer satisfaction. There are significant competitive
benefits for businesses using reverse logistics. More and more customers are
interested in doing business with companies who are committed to environmental
issues.

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  Discover new ways of reworking materials. Recouping the monetary value of items
that were rejected can open up new business opportunities. Outlets are a prime
example, specializing in selling last season’s products or those with small flaws at a
lower than usual prices.
 Stock control. Reverse logistics means better stock organisation, which stops the
housing of obsolete products and minimizes possible errors.
 All these advantages have a positive effect, likewise, on cutting costs and boosting
revenue.

Reverse logistics is becoming more relevant throughout the business world. Even though
these practices contribute to a cleaner environment, they are also a clear business opportunity
thanks to savings from salvaged products. In any case, companies should put together an in-
depth study of their needs and objectives to find a returns management solution that works
for them.

Green Logistics: Eco-logistics or green logistics refers to the set of sustainable policies and
measures aimed at reducing the environmental impact caused by the activities of this business
area. This logistics concept affects the configuration of processes, structures and systems or
equipment in the transport, distribution and storage of goods.

The traditional approach to logistics often leaves environmental sustainability on the sidelines
during decision-making. On the other hand, the aim of green logistics is to find a balance
between ecology and economy. How can you manage it? Why include green logistics policies
in your company? What challenges does this particular logistics paradigm face? Here we
analyze the main issues related to sustainable logistics.

The objectives of green logistics:

Green logistics seeks to:

 Measure the carbon footprint of logistics operations to establish a starting point for
considering sustainability measures and controlling their results. One of the most
widespread methodologies for calculating energy consumption and greenhouse gas
emissions is the UNE-EN 16258:2013 international standard.

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  Reduce air, soil, water and noise pollution by analysing the impact of each logistics
area, especially those related to transport.
 Use supplies rationally by reusing containers and recycling packaging.
 Spreading sustainability to the supply chain, eco-logistics is also shaped by the design
of products and their packaging. Both must be designed to minimize their
environmental impact.

What are the challenges facing green logistics today?

Today, the logistics industry is not known for its high degree of sustainability. Companies
face significant obstacles in implementing environmental policies in the field of logistics.
This is due to several causes:

1. Dependence on fossil fuels, especially in transport: Effective, economically viable

solutions have yet to be found to wean the sector’s fuel reliance in goods transport.

2. Last Mile Deliveries’ impact on urban traffic: In particular, e-commerce deliveries have
greatly increased the volume of delivery vehicles in large cities and many operate without
carrying full loads when faced with mixed orders.

3. Lack of infrastructure: Local authorities are in the process of regulating emission limits.
However, a cross-sectoral agreement is needed to put measures in place to build new
facilities that meet the wants of those involved in logistics activities.

4. Businesses which need to invest: Whether logistics operations are carried out in-house or
outsourced, the tight rates and margins involved don't always let you think about investing in
infrastructure, process automation or more efficient handling equipment.

5. The invisibility of logistics to consumers: Generally, logistics isn’t sustainable because

neither is the customer. An additional problem exists: for the customer, logistics is invisible
and increasingly so. It is difficult to apply green logistics policies when the customer
demands, for example, 24-hour deliveries that prevent consolidating your loads or making the
most of transport flows. Moreover, logistical costs are often not itemized in an invoice or are
negligible. This diminishes their relevance and, therefore, reduces the reasons for a business
to invest in its environmental sustainability.

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How to apply eco-friendly logistics approaches strategies:
1. Include eco-friendly criteria in your procurement policies: Sustainability criteria can be
included in a company's purchasing and procurement policy when it comes to assessing
suppliers' proposals. These can refer to:

 Product characteristics: e.g., buying eco-friendly packaging and limiting the use of
plastic in packaging.
 Manufacturing processes: international regulations guarantee favourable
environmental management. Mecalux is ISO 14001 certified, which ensures that an
environmental management system has been implemented in the company's global
operations.
 The supplier's location, prioritizing those closest to its facility.

In this way, the possibility of purchasing eco-friendly supplies could be evaluated. For
example, more and more efficient industrial vehicle options curtail greenhouse gas emissions,
especially in the light duty class. Moreover, it is worth looking into whether funding or a
subsidy is available to help purchase them.

2. Optimize transport fleet management: Transport is a major carbon footprint area in the
logistics chain. Aside from buying cleaner running vehicles, to limit emissions, it is necessary
to use systems that assist delivery route planning and prioritize load pooling. Not only do you
achieve higher efficiency in fleet management, but you also cut back the overall emissions
produced by the transport.

3. Have a warehouse that follows sustainable construction and management standards:

The boom in the logistics sector is driving demand for new warehouses or forcing companies
to redesign their infrastructure to meet market requirements. As such, there are different ways
in which eco-logistics can be reflected in warehouse design:

 The so-called 4.0 logistics buildings take centre stage: their design and construction
incorporate environmental protection measures that guarantee sustainable
management of the building. The Bream or Leed certifications are two of the seals
that endorse logistics warehouse sustainability. These certifications are granted by
analysing issues such as the water and energy consumption efficiency, the use of

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 alternative energy sources, the selection of construction materials and waste
management throughout the entire process.
 In-warehouse monitoring and promotion of energy savings: these can be implemented
in different ways. For example, the total automation of certain processes in the
warehouse makes it possible to limit artificial lighting needs (emulating the
methodology known as lights-out manufacturing). Another way to adhere to
sustainable logistics approaches is to use as little packaging as possible on products to
limit resource wastage, or to make use of adaptive packaging options which are more
versatile.

4. Enable measures to reduce and recycle the waste produced in warehouse: One of the
measures to help apply environmental logistics in a warehouse is to use sustainable criteria to
manage the generated waste. For example:

 Establish a waste sorting process according to materials to be recycled.

 Roll back in-warehouse paper usage by implementing IT solutions such as the Easy
WMS warehouse management software.
 Control special waste management so that they comply with appropriate recycling
procedures.

5. Improve stock management and reverse logistics processes: Achieving a more efficient
storage facility follows one of eco-logistics core principles: reducing waste through overall
process improvement. Some measures to achieve this are:

 Scale down movements within your warehouse through a combination of good

storage location management and optimized picking plans.
 Prevent stock damage caused by manual handling of goods. Deploying robots and
automated systems in your warehouse resolves this issue.
 In the case of perishable goods, accurately manage the FIFO criterion to control
expirations and prevent goods from spoiling.
 Establish quality control processes for returned products that leverage reverse
logistics management.

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Why go green in your logistics?

There are compelling reasons why green logistics is gaining ground:

 Green logistics policies represent a strategic advantage over the competition. Not only
do they revalue your brand and set it apart, but they also prepare your company for
the future, which inevitably must be sustainable.
 Energy saving measures is an effective strategy for coping with rising supply costs.
 They ensure that a company is prepared to comply with environmental regulations.

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