Part I Introduction
9.1 Material Handling
9.1.1 History
MH is not a new subject. Human beings who first inhabited Earth were faced with the problem of moving things. They needed to transport both themselves and the materials they needed for their existence.
History has recorded continual progress in MH. Probably one of the greatest achievements in the ancient world was the construction of the pre-Inca temple near Cuzco, Peru. Stones weighing as much as 20 tons were quarried at the bottom of a val- ley and moved more than 2000 feet up to the temple site. In 1913, the Ford Motor Company instituted the first mechanized progressive-assembly line. World War II stimulated the implementation of MH mechanization. Companies that had government cost-plus contracts were encouraged to make capital expenditures for MH equipment.
Progress in current modern facilities is evident in the use of both mechanized and automated MH equipment to provide desired efficiencies [1].
9.1.2 Definition
One idea of how the concepts of material management, physical distribution man- agement, and business logistics are related is that they overlap in MH, which can be described as the systematic physical movement of materials. The areas of
Logistics Operations and Management. DOI: 10.1016/B978-0-12-385202-1.00009-8
©2011 Elsevier Inc. All rights reserved.
overlap present management with its most serious MH problems. The most impor- tant areas that are influenced by MH are shown in Figure 9.1.
The following are some of the definitions of MH.
1. In Ballou’s definition, MH is physically moving objects or goods in small quantities over relatively short distances [3].
2. The way materials and products are handled physically is the subject of MH movement.
To this point, the emphasis has been on the movement of products that are packaged in customer-sized boxes [4].
3. For Magad and Amos, MH is the art and science of moving, storing, protecting, and con- trolling materials [1].
4. MH means providing the right amount of the right material, in the right condition, at the right place, in the right position, in the right sequence, for the right cost by the right methods [5].
The first definition conveys the fact that MH is a physical movement between short distances. It is an activity that takes place in warehouses, production facilities, and retail stores and also between transportation modes, so it must be repeated many times [6]. In the second definition, the emphasis is on the concept of building blocks: MH is moving products as building blocks such as boxes, bottles, and cans [4].
The first and second definitions regard MH as a science that studies the move- ment of physical materials, whereas the third and fourth definitions consider MH also to be an art. The third definition conveys the fact that the MH design process is both a science and an art, and that MH function involves moving, storing, pro- tecting, and controlling materials. It is a science-based discipline involving many areas of engineering, so engineering design methods must be applied. Thus, MH
Purchase
Distribution
Marketing Materials
management
Materials handling
Business logistics
Physical distribution management
Figure 9.1 The movement of goods [2].
design process involves defining the problem, collecting and analyzing data, gener- ating alternative solutions, evaluating alternatives, selecting and implementing pre- ferred alternatives, and performing periodic reviews. It is an art because MH systems cannot be explicitly designed based solely on scientific formulas or mathe- matical models. As mentioned in the fourth definition, MH requires knowledge and appreciation of right and wrong, which is based on significant practical experience in the field [6].
The fourth definition exactly explains the abstract of the MH functions. The right amount refers to the problem of how much material is needed. The right material refers to the fact that an accurate identification system is needed. The right condition is the state in which the customer desires to receive the material.
The right sequenceof activities affects the efficiency of a manufacturing or distri- bution operation in MH. Theright placeaddresses both transportation and storage.
The right time means on-time delivery. The right cost does not mean the lowest cost. Minimizing cost is solely the wrong objective in MH system design. The more appropriate goal is to design the most efficient MH systems at the most reasonable costs [6].
9.1.3 MH Principles
No mathematical model can provide extensive solutions to overall MH problems.
Applying experience is an important key in managing the MH processes. MH prin- ciples are the essence of practical experience. Condensed from decades of expert MH experience, these principles provide guidance and perspective to those who design MH systems.
These are some of the MH principles that have been developed by the College Industry Council on Material Handling Education after designing and testing MH systems through rigorous engineering analysis. Some of the principles are the results of Eastman’s experiences in practice [4]. The principles are more important when laying out the intended design or when troubleshooting to discover why a system is not performing well. The principles are as follows [1].
G Orientation principle: Look at the entire system and study it first to learn how it operates.
Identify the system components and their relationships. Also, look at relationships to other systems to find physical limitations.
G Planning principle: Prepare a plan to meet the basic requirements. In a reasonable form, an MH plan identifies the material (what), the moves (when and where), and the method (how and who).
G Systems principle: Integrate the handling, packaging, and storage activities that make up a coordinated system.
G Unit-load principle: Pick up products as a unit.
G Space utilization principle: Optimize the utilization of all space.
G Standardization principle: Standardize the methods and equipment employed. Reduce customization.
G Ergonomic principle: Adapt working conditions to workers’ needs and abilities.
G Energy principle: Reduce energy consumption by the MH activities.
G Ecology principle: Minimize adverse effects on the environment when selecting MH sys- tem components.
G Mechanization principle: Use machines, where they can be justified, to replace human effort.
G Flexibility principle: Use methods and components that can work with reasonable toler- ance and can perform a variety of tasks.
G Simplification principle: Change handling procedures by eliminating, decreasing, or com- bining unnecessary movements or equipment.
G Gravity principle: Rely on gravity to move materials easily wherever possible.
G Safety principle: Provide safe MH system components to handle the entire system.
G Computerization principle: Use computers to operate both individual pieces of equipment and massive supply chains spread across several continents.
G Systems flow principle: Integrate data flow with the physical material flow in handling to make a coordinated system.
G Layout principle: Organize an operation sequence and equipment layout for all variable system solutions.
G Cost principle: Recognize that all MH alternatives have associated costs and that these costs must be carefully considered as the system is devised. Investment proposals must be presented to top management for approval.
G Maintenance principle: Schedule a plan for maintenance on MH equipment.
G Obsolescence principle: Establish a long-term and economical program to replace obso- lete equipment and methods, paying special consideration to after-tax life-cycle costs.
G Automation principle: Apply electronics and computer-based systems to operate and con- trol the entire system activities.
G The team-solution principle: Collaborate with MH team members to devise the best system.
G The just-in-time principle: Hold products that are not moved until needed.
G Minimum travel principle: Systems should be set up so that loads move the shortest distances.
G Using the right equipment: Use equipment that is needed for MH.
G Designing capacity for present and future: Consider the development of MH systems in future system design.
G Developing technological assessments: Prepare assessments that make operations simple with using technological facilitates.
G Using the systematical approach: Consider the components and their relationships as an integrated system to unify them and increase efficiency.
9.1.4 MH Equipment
MH equipment and systems often represent a major capital expenditure for an orga- nization to set up. The decisions related to the MH can affect many aspects of the organization operations.
Equipment analysis is an important part of analyzing an MH system. A reason- able solution often requires more than one individual piece of equipment. The vari- ous pieces of equipment that comprise an integrated system are needed. Materials management personnel who are involved in developing solutions must become acquainted with the diverse types of MH equipments and their applications [2].
The following are some of the criteria for selecting MH equipment.
G Cost
G Reliability and maintainability
G Service facilities
G Operating characteristics
G Safety and environmental characteristics
G Compatibility and the system’s concepts
MH equipment is classified as continuous(e.g., conveyors),discontinuous(e.g., cranes and industrial trucks), orpotential movement(e.g., unit-load equipment, pal- lets, and containers) [2].
In some studies such as Stock and Lambert’s research on logistics management issues, automation is the classification base in the first level. In another point of view, applications are used for the classification base [6]. This list includes almost all MH equipment as follows.
1. Containers and unitizing equipment A. Containers
1. Pallets
2. Skids and skid boxes 3. Tote pans
B. Unitizers 1. Stretch wrap 2. Palletizers
2. Material-transport equipment A. Conveyors
1. Chute conveyor 2. Belt conveyor 3. Roller conveyor 4. Wheel conveyor 5. Slat conveyor 6. Chain conveyor 7. Tow-line conveyor 8. Trolley conveyor 9. Power and free conveyor 10. Cart-on-truck conveyor 11. Storing conveyor B. Industrial vehicles
1. Walking 2. Riding 3. Automated
Automated guided vehicles Automated electrified monorail Sorting transfer vehicles C. Monorails, hoists, and cranes
1. Monorail 2. Hoist 3. Cranes
3. Storage and retrieval equipment A. Unit-load storage and retrieval
1. Unit-load storage equipment Pallet-stacking frame Single deep selective rack Drive-in rack
Mobile rack
2. Unit-load retrieval equipment Walkie stacker
Counterbalance lift truck Narrow-aisle vehicle
Automated storage (AS) retrieval machines B. Small-load storage and retrieval
1. Operator-to-stock storage equipment Bin shelving
Modular storage drawers
2. Operator-to-stock retrieval equipment Picking cart
Order-picker truck 3. Stock-to-operator equipment
Carousels
Vertical lift module Automated dispenser
4. Automatic data-collection and communication equipment A. Automatic identification and recognition
1. Bar coding
2. Optical character recognition 3. Magnetic strip
4. Machine vision
B. Automatic paperless communication 1. Radiofrequency data terminal 2. Voice headset
3. Light and computer aids 4. Smart card
9.1.5 Unit-Load Design
Baily and Framer define aunit loadas a standardized combination of a number of items into an integrated one that can be handled as a single item. Reasonable rea- sons for designing unit loading include making the MH easier, reducing costs, and increasing transportation security. The elementary principle behind the unit load is making smaller units more convenient, economical, and easier to handle, transport, and store [2].
Unit load is an extension of the building-block concept to large quantities.
Based on that concept, unit loading involves securing boxes to a pallet; the boxes or containers secured to a pallet are a unit load. The term unitizationdescribes this kind of handling [3].
The high cost of manual labor has made the individual handling of small packages and items prohibitively expensive. If a number of items can be handled as a unit, then MH costs are reduced by moving larger loads, which eliminates unloading and reloading, cuts travel time, uses space more efficiently, reduces inventories, and facilitates shipping, transport, and receiving [6].
The size and type of unit load depend on a whole range of factors, the most important being the goods or materials to be handled; the size, weight, strength, and shape of intermediate packs; the type of storage required; the type of transport required; the type of handling equipment that may be available; and the quantities of goods and materials to be handled [2].
The unit load has several advantages. First, it adds protection to the cargo because the pallets are secured by straps, shrink-wrapping, or some other bonding device. Second, because removing a single package or its contents is difficult, pil- ferage is discouraged. Third, the unit load enables mechanical devices to be substi- tuted for hand labor. Many machines have been devised that can quickly build up or tear down a pallet load of materials. Robots can be used when more sophisti- cated integrated movements are needed for loading or unloading. Ballou [3] pre- sented an example of robot-assisted palletizing and depalletizing in the printing industry in which bundles of printed pages must be stacked in a specified order.
Unit-Load Criteria
Two important limits that help determine the unit-load design are those for size and weight. The unit-load size must be standardized so it can be handled easily and economically with modern equipment. Some unit loads may be bigger or smaller to meet other criteria and/or product characteristics.
The weight of the unit load must be kept within the capacities of the MH equip- ment and the storage facilities. Unit loads of some high-density materials such as steel, flour, and stone are smaller than optimal size in order to keep the unit-load weight within limits [3].
The unit load calls for a standard base or container. Among the possibilities are:
G Pallets
G Stillages
G Skids
G Slip sheets
G Containers
G Self-contained cartons
G Intermediate bulk containers
9.1.6 Designing MH Systems
Design is the most important step in operating an MH system that will accomplish its objectives. From a variety of possible alternatives, the designer selects one set that will result in an efficient and economic system.
The design process is not a well-defined algorithm that the designer can follow through to a successful outcome. It is both a procedure and an art based on empiri- cal experience, engineering knowledge, and ingenuity.
The MH systems design process involves the following six-step engineering design process [5]:
1. Define the problem and identify the system scope and objectives of the MH system.
2. Identify the requirements and analyze them for moving, protecting, and controlling materials.
3. Generate alternative designs for satisfying the MH system requirements.
4. Evaluate alternative MH system designs.
5. Select the preferred design for moving, protecting, and controlling materials.
6. Implement the selected design, including selecting suppliers and equipment, training per- sonnel, installing equipment, and periodically auditing system performance.
Problem Definition
MH problems must be first identified clearly so that a solution can be achieved.
Existing operations should be reviewed, beginning with receiving activities and continuing all the way to final shipment.
The problem may arise from a critical incident, management’s perception that improvement is needed, competitive pressures, or even other parts of company such as warehouses.
The objectives of MH systems are the end results that the system is expected to accomplish. As Stock and Lambert mentioned in their research, a typical objective is cost reduction. Others may be better customer service, greater space productivity, increased efficiency, or decreased accidents and damages. Those criteria which measure the extent to which the systems design is expected to meet the objectives [6].
Analyzing the Requirements
The next step is to analyze the problem and related information gathered so far based on the problem definition. The designer reviews what has been learned and what there is to work with. A major result of this analysis is limiting the number of alternatives to be investigated based on the objectives that are identified in the pre- vious step. Careful selection of the most promising choices to investigate is the key to efficient use of engineering resources and to a successful design outcome.
Another outcome is determining any additional data that must be collected and any additional changes that must be made in the problem statement, objectives, and constraints [6].
Analytical techniques can provide valuable information for the design and deci- sion-making process in this step. Some of these techniques are as follows [1].
Fromto chart: A fromto chart is a matrix used to summarize information regarding material movement between related predefined nodes. It can be used to prepare material
flow patterns, compare alternative, identify bottlenecks, and determine candidates for mechanization and automation.
Flow-process chart: The flow-process chart is a step-by-step record of activities per- formed to accomplish a task. The flow-process chart is useful for analysis and for deter- mining improvements, such as combining operations, eliminating unnecessary handling, simplifying a method, or changing a sequence or routing.
Flow diagram: The flow diagram is a graphical outline of the steps in a process similar to a flow-process chart. It is valuable for obtaining a macroperspective on the entire activity.
Product quantity (PQ) chart: The PQ chart is a graphical record of various products, parts, or materials produced or used for a particular time period. Quantities should be related to standard unit loads.
Simulation and waiting line analysis: These two analytical techniques help designers to simplify the problem analysis.
Developing Alternatives
To help develop alternative MH system designs, the MH system equation may be useful. The equation gives the key for identifying solutions to MH problems. It determines three important system components:Whatdefines the type of materials moved, where and when identify the place and time requirements, and how and whopoint to the MH methods. These questions all lead us to the system.
The MH system equation is given by [7]:
Materials1Moves1Methods5System
Evaluating Alternatives
The objective of this step is to determine the value of alternative MH systems so that the designer can find the optimum solution. Economic analysis is an obligation for determining the best solution to a problem. It is also important in preparing a justification of capital expenditures for consideration and approval by upper man- agement. Basic methods of cost comparison are discussed below.
Payback period: The most commonly used method for economic analysis—payback period—is the easiest method to compute and understand. It computes the time period required for estimated project savings to equal the investment. A serious shortcoming is the assumption that one alternative is better than another because it pays for itself more rapidly.
Return on investment (ROI): Unlike the payback period method, the ROI method takes into consideration the equipment’s useful life. Normally, it relates net profit after taxes and depreciation to the total investment, thus indicating what each alternative will earn with respect to the investment.
Discounted cash flow (DCF): DCF computes the total present worth of cash flow over the project’s life, using an interest rate equal to the company’s minimum required rate of ROI. This method considers the present value of money after interest payments have been added to it over a period of time. Basically, it finds the interest rate that discounts future earning of the project alternative down to a present value equal to the project cost.
Some noneconomic factors can help the designer evaluate alternatives:
G Capacity
G Ability to handle the product
G Maintainability
G Reliability
G Damage and safety
G Compatibility
G Installation and lead time
Selecting the Preferred Design
In this step, all of the design alternatives that were evaluated in the previous steps are compared with each other, and the one that satisfies the objective is selected. If the MH system follows more than one objective, then the multicriteria decision methods will help the designer select the right alternative that will satisfy the majority of objectives.
Implementing the System
Implementation means to give practical effect to and ensure actual fulfillment by concrete measures. In this step, the approved MH project is implemented into a physical operating system which moves materials. The effectiveness with which implementation is carried out will determine the degree of success attained by the MH system.
This step includes the following tasks.
Organize for implementation: The quality of the design, the smoothness of installation, and the efficiency of the resulting system all depend on good organization and competent personnel.
Determine roles in implementation: The MH system designer works with many other departments and individuals in the design and installation of an MH system. Some of these have the authority to require changes in design and operation. Others may be spe- cialists who can furnish valuable advice on some facets of the system design. The system designer must be able to work with all those involved to secure the best results.
Determine the implementation procedure: After the MH system design has been approved, the system designer has to coordinate carrying out the plan and installing the system. This requires considerable efforts, good technical abilities, and personnel skills.
Train personnel: It is not a necessary part of project implementation to train operating and maintenance personnel in new methods and equipment, but this may be a major effort as in a factory introducing new developed equipment for the first time. On the other hand, little new training may be required if the system is similar to existing ones [6].
9.1.7 MH Costs
MH represents a major portion of total costs for almost every type of business.
Depending on the nature of industry and the type of facility, MH may include 1080% of total costs. MH adds cost, but not value; hence, companies try to