The Importance of Material Handling for Supply Chain Management: What and How to Optimize

Recent global disruptions have pushed businesses to explore new ways for optimizing their supply chain. The biggest challenge is to counter the inefficiencies, delays and negative customer experiences caused by subpar material handling practices.

The material handling equipment industry is poised to reach a staggering $193 billion by 2030, underscoring the significant investments businesses are making to tackle these challenges.

However, pouring money solely into costly equipment isn’t the only route to success. Strategies and innovations such as ergonomics, standardization and improved layouts can also help combat challenges and build future-proof solutions.

As companies deal with mounting supply chain stress, optimizing material handling to maximize profits has become more crucial than ever. In this article, we’ll dive into the advantages of optimized material handling and go over concrete strategies you can use to optimize it while balancing other factors.

Advantages of Optimizing Material Handling

Here are some compelling reasons to optimize your material handling processes:

Boosts productivity and efficiency: By optimizing your material handling system, you can prioritize critical tasks effectively. This allows employees to demonstrate enhanced competence and productivity in essential business operations.
Cuts down overhead costs and wastage: The optimization of storage and material movement can lead to a reduction in inventory levels. Consequently, businesses can effectively combat rising warehouse costs — which have seen a notable increase with total warehousing property costs rising by an average of 8.4% — and minimize the risks of damage and wastage.
Reduces accidents and improves job satisfaction: Among top workplace accidents in the United States in 2022, overexertion was identified as the most debilitating one. Implementing smart material handling systems can optimize the amount of manual labor required for day-to-day operations, thereby reducing the risk of such accidents. This improvement in safety measures also helps alleviate stress levels, contributing to overall employee satisfaction.

By boosting productivity and efficiency, reducing costs and wastage, and improving safety measures, businesses can establish a competitive edge and future-proof their supply chain. As they navigate the complex challenges of a rapidly evolving global market, it’s essential to prioritize optimizing material handling to achieve success.

Strategies for Material Handling Optimization

An effective material handling system controls inventory in real-time, encourages efficient order picking and transport, reduces operational costs and optimizes the overall flow of goods in a facility.

To manifest these benefits, businesses can implement the following actionable tips and strategies:

1) Standardization and Simplification

Since efficiency is often hindered by complexity, merely simplifying processes or investing in standardization can yield striking results. When it comes to simplification, the ideal approach is to minimize unnecessary movement. This not only saves workers’ effort and time but also has the potential to conserve valuable space.

For instance, consider the scenario where finished goods are directly moved to a loading dock without storing them in a warehouse first. This reduction in extra movements translates into time savings and eliminates the need for storage space — resulting in cost benefits.

Standardization can also lead to further operational efficiency. One example is investing in bulk material handling systems. These systems allow for the simultaneous movement of multiple goods, eliminating the need for several trips and optimizing productivity.

2) Ergonomics for Employees

When streamlining material handling processes, it is crucial to prioritize ergonomics to optimize the human factor. By finding ways to minimize repetitive motions and reduce manual labor, overall safety and efficiency can be improved:

Conduct ergonomic assessments: Material handling tasks such as lifting, lowering, pushing and pulling should be evaluated for potential hazards. Implementing strategies like using stacked pallets as a lift-off point or prohibiting direct lifting from the floor can effectively mitigate risks and promote safer practices.
Optimize shelving for safe retrieval: While maximizing storage space is essential in warehousing, it is equally important to ensure that employees can retrieve items safely. Avoiding excessive heights or storing items too low can help prevent injuries and enhance efficiency during material retrieval.
Balance the human factor with efficiency: The ultimate goal should be to prioritize employee well-being while maintaining optimal productivity. For example, Amazon’s warehouses have implemented systems that enable order pickers to locate the nearest pickup point for a specific product by distributing single types of inventory across multiple picking points. This approach enhances efficiency while reducing unnecessary physical strain on employees.

By integrating ergonomic principles into material handling processes, warehousing companies can create a safer and more efficient work environment, leading to improved overall performance and employee well-being.

3) Intelligent Storage Layouts and Organization

With an ever-increasing need for storage, warehouse managers need to invest in intelligent systems and practices to effectively manage their operations. Here are some strategies to consider:

Maximize space utilization: Evaluate your storage layout to identify opportunities for space savings. For example, stack items more tightly, move shelving units closer together or explore alternative storage equipment to make the most of available space.
Categorize inventory with container types: Organize inventory using suitable material boxes and implement clear labeling to facilitate quick identification and retrieval. This practice helps streamline inventory management and reduces the time spent searching for specific items.
Establish a shelving hierarchy: Improve accessibility to frequently circulated items by arranging packages and regularly used supplies within easy reach of teams. This ensures that essential items are readily available, minimizing the time and effort required to locate them.

By implementing these practices, warehouse managers can optimize space utilization, enhance inventory management and improve overall operational efficiency.

The Future of Material Handling

As supply chains continue to evolve, the effective management of material handling plays a pivotal role in ensuring operational efficiency, cost reduction and customer satisfaction.

By recognizing the significance of material handling and implementing strategies to optimize its processes, businesses can position themselves for success in this new, dynamic landscape of supply chain management.

To conquer the future, they need to go beyond embracing technological advancements. The focus should be on seamless connections between people, well-organized warehouse loading and unloading, efficient information flow and smart products throughout the supply chain.