Five Material Handling Costs You Can Avoid

Material handling can cost quite a lot of money. Apart from the obvious expenses, there can also be hidden material handling costs that are not appreciated at first. However, with a few clever, yet simple steps, you can reduce these costs to a minimum. With the right planning, you can analyze your actual needs and requirements, and where to look for handling costs in order to be able to avoid them or reduce them.

Damage

One of the biggest contributing factors to the high costs of material handling is damage. When product damage piles up, it can cause significant losses to the organization. A good way to reduce damage is to control the health of your material handling equipment. Documenting where and how damage occurs most frequently is a helpful way to avoid it. Moreover, employee training is absolutely necessary for avoiding damage.

Utilizing Vertical Space

Whether it’s a warehouse or a manufacturing facility, utilizing the vertical space of the facility is extremely important in order to avoid additional material handling costs. Wasting vertical space in a facility is equivalent to wasting valuable floor space. Utilizing vertical space properly allows you to store more inventory while taking up the same amount of floor space. Installing overhead material handling equipment keeps the floor space free for other tasks.

Excessive Movement

Unnecessary movement of products by employees generates extra costs and is also unproductive. An excessive amount of time spent picking, moving, repackaging, sorting, and preparing goods usually results in lost productivity. It’s important to evaluate what is really necessary for terms of touch labor and reduce it to a minimum to save time and money. It might not seem so but according to the U.S. Census Bureau; unnecessary motion of materials costs the U.S. about $4.3 billion every year.

Incorrect Material Handling Equipment

Thanks to innovations in technology and manufacturing, there is a plethora of different kinds of material handling equipment available in the market these days. But not everyone has the perfect knowledge of the various kinds of handling equipment. In many facilities, material handling devices are used improperly and for the wrong purpose or they are being used incorrectly. This adds to the material handling cost as you can’t achieve maximum benefits. It’s important to regularly evaluate your material handling processes and equipment to analyze if you’re using the right tools for the job and providing the maximum benefit to your operators.

Inefficient Inventory Storage

A very prevalent cause of added handling costs is inefficient inventory storage due to misallocated product storage space. Optimizing your storage can give you surprising benefits in terms of efficiency and saving time and cost. It is advisable to have a proper strategy for where and how inventory is stored, according to factors such as how quickly the SKUs move. You should frequently review inventory movement to determine whether or not to re-slot inventory. This also allows the manager to pinpoint any slow movers and get rid of excess inventory.

Reducing costs has become one of the most important things since the Covid-19 pandemic. Follow these tips to bring down your material handling costs.