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Ways to Improve Material Handling Efficiency

 
Critical Factors when Choosing an Order Picking System

 

Planning a Warehouse or Distribution Center

 

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The Five Most Common Mistakes When Planning a Distribution Center by TriFactor's Craig Bertorello and featured in Supply & Demand Chain Executive (online).  

 

Seven Factors to Consider When Choosing an Order Picking System by TriFactor's Richard Gillespie and featured in Industrial Distribution (online).

 

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TriFactor Home > TriFactor Learning Center > Return on Investment (ROI) Considerations

Return on Investment (ROI) Considerations

Material handling warehouses or distribution centers must balance many different areas to create a realistic Return on Investment.  Businesses large and small are concerned with their bottom line; these ROI Considerations have been outlined as a supplement to your operation's assessment.

 

Labor Savings 

  • Standard Wages plus an industry average Burden rate of 30%
  • Floor / Line Operators
  • Supervisors / Managers
  • Maintenance
  • Quality Control
  • Overtime reduction due to increased throughput
  • Reduced recruiting process costs due to reduced labor force / reduced turnover
  • New Hire training time can be reduced
  • Throughput increases may reduce need for incremental seasonal labor
  • Decreased inventory can create reduction in receiving labor 

Throughput 

  • Reduced overall order cycle time / faster response time to customer
  • Simplified material flow paths
  • Better system reliability / more uptime
  • System balancing / elimination of bottlenecks
  • Less expediting
  • Reduced inspection
  • Reduced rework
  • Capacity to handle new products
  • Improved scheduling and workflow 

Accuracy 

  • Reduce product stock outs due to increased accuracy
  • Reduce transit costs for mis-shipments between stores and DC

Brick and Mortar Savings 

  • Increased throughput lengthens the amount of time that the current facility will meet growth and throughput demands
  • Saving associated with available cash that is not needed for building expansion
  • Existing annual equipment budgets can be reduced
  • Elimination of excessive aisle space / better cube utilization 

Safety and Ergonomics 

  • Worker’s Compensation claims can be reduced due to less handling of product.  A careful review of prior claims can identify prior avoidable injury and claims
  • OSHA accessed penalties / safety violations
  • Reduced product handling may reduce questionable worker’s compensation claims
  • Reduced noise levels
  • Ergonomically designed workstations   

Inventory 

  • Shrinkage can be reduced
  • Effective inventory management may allow for JIT inventory practices, which reduces carrying costs.
  • Damage reduction, both visible and concealed can create significant savings through reduced handling
  • Fewer returns due to higher accuracy and less product damage
  • Reduced replenishment
  • Reduced safety stock

Image 

  • Increase overall market image to both customers and suppliers.
Client Partners Comments: conveyor systems, material handling engineering, material handling consultants
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