Material Handling: The Next Generation

March 7, 2010
Smarter material handling systems are helping manufacturers improve order-to-delivery cycles.

The demand for material handling equipment decreased dramatically in 2009 since, with fewer orders to fill, manufacturers had fewer goods to move throughout their facilities and warehouses. In fact, according to the Material Handling Industry of America (MHIA), equipment orders dropped by 37% last year. The good news is that the recession appears to be over and equipment orders should grow 6% to 8% in 2010, although that still leaves a lot of ground to make up before the material handling sector returns to pre-recessionary levels.

"Industrial production activity is increasing, even though factory operating rates (utilization) remain very low by historical comparisons," says Hal Vandiver, MHIA's executive vice president of business development. "Demand created as the economy shifts from recession into recovery mode -- filling supply chain pipelines, re-establishing inventories and responding to pent-up demand -- is the principal impetus for improvement over the next few quarters in manufacturing, warehousing and distribution."

According to S. Menaka, technical insights research analyst with Frost & Sullivan, material handling systems help manufacturing companies cope with buying cultures that are in a continuous state of flux. These systems help companies reduce their inventory levels while improving their order-to-delivery cycles. The push toward globalization in particular is driving the development of newer and more efficient material handling technologies.

The current trend among material handling systems, Menaka observes, is "smaller and smarter." Many systems are being incorporated with electronic intelligence in the form of touch screen interfaces, distributed control functions that replace bulky control panels and upgraded software that interfaces with enterprise systems and warehouse management solutions.

Smart sensors and interactive interfaces are among the technologies available in the current wave of material handling systems. Color-coded indicators in the InfoLink system from Crown Equipment Corp. offer a dashboard view of lift truck performance based on the user-defined operating range for each opportunity.

"In order to reduce complexity in material handling operations, warehouses are deploying integrated warehousing that is capable of handling thousands of varieties of stock keeping units (SKUs), while reducing the overall complexity in customer delivery and distribution, adds Menaka, author of a recent study on material handling trends. "The resultant complexity in market segmentation has also enhanced the need for stringent tracking and tracing of product movement, which is also effectively done through the deployment of handling equipment."

Although material handling used to be considered a total in-house operation, thanks to the boom in outsourcing non-core tasks, material handling these days is frequently done by third-party logistic (3PL) providers, Menaka adds. "Cross-company collaborations have increased with integrated supply chains and concurrent movement of goods and information."

Green initiatives are becoming increasingly prevalent in the material handling industry. Industrial practitioners are opting for environmentally responsible material handling systems that reduce emission levels and produce less noise, Menaka observes. Manufacturers are also looking for solutions that lead to increased picking speed combined with flexibility, organizational flexibility combined with effective space utilization, and increased throughput at decreased labor cost.

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About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

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During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

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