This article is sponsored by American Crane & Equipment Corporation.
In the supply chain, labor and materials — or, more specifically, the proper storage and handling of materials — play a crucial role in achieving a successful operation and overall financial stability. "Every link in the supply chain relies on proper material handling processes and efficiently-run warehouses to store goods ranging from raw materials to equipment to finished goods,” says Karen Norheim, president and COO of American Crane & Equipment Corporation, a Pennsylvania-based manufacturer of cranes, hoists, and other material handling equipment.
For example, she explains, when raw materials are frequently moved from one location to another, even if they’re just being transported a short distance within a storage facility, the likelihood of degradation and damage increases significantly.
"Not only does this result in extra expenditures, but it also lengthens and delays project timelines,” Norheim explains. Luckily, there are several options available for reducing material handling costs in the supply chain.
Implementation – and Optimization – of New Technology
Innovations in machine learning, AI, GPS technology, and sensors have created an environment in which all aspects of material storage, transport, and production can be continuously monitored in real-time. Plus, automatic temperature and moisture controls, along with predictive algorithms for accurate decomposition rates, can significantly reduce the need for regular human intervention in the supply chain.
For example, if something out of the ordinary occurs, an internal alert system can send out messages to warehouse staff and other employees. These notifications can even include recommendations regarding the optimal hierarchy of steps and the likelihood of material loss at each decision point.
Alternatively, a “smart warehouse” system may simply be used to adjust the storage temperature or moisture, and then await further action from a designated employee.
Storage Space Planning
A nearly empty warehouse, or one that has reached maximum capacity, may not only affect the integrity of raw materials but also overall production efficiency. Wasted space translates to extra overhead, which doesn’t generate a return on investment. Lack of space may also result in more employee touchpoints, as workers attempt to ensure that all materials are adequately stored and accounted for. Furthermore, an overcrowded warehouse can put employees at risk of injury.
Business cycles ebb and flow. Whether done quarterly, biannually, or yearly, conducting periodic reviews of industry shifts and changes — and how they may impact the inflow and outflow of materials — is highly recommended. Advanced technology can help here as well, providing predictions as to how much space would be required for different scenarios.
Enhanced Employee Communication
Despite the introduction of more and more sophisticated robotics systems — which aren’t cheap to implement, but do pay for themselves over time — human employees are still very much needed. Since they are in the trenches on a daily basis, they have firsthand knowledge as to what’s working and what isn’t. It’s essential to get their input on ways to optimize material handling efficiency and incorporate their feedback into managerial and strategic decision-making.
When new technology is deployed, employees should be thoroughly trained on all aspects of the nascent system. While the enthusiasm surrounding AI and its numerous possibilities is understandable, final decisions on how to increase efficiency, reduce costs, and maintain a safe work environment are ultimately human responsibilities, and the voice of the employee should always be considered in tandem with feedback from algorithms and other technologies.
Reducing Material Handling Costs
Reducing material handling costs is a multifaceted challenge, requiring a full assessment of worker efficiency, technological and equipment capabilities, storage capacity, and material flow.
Keeping the above tips in mind will help guide you through the process, ultimately bringing about more seamless, efficient handling processes — and, of course, significant cost savings.
