INTRODUCTION

Material Handling involves the movement of material, manually or mechanically

in batches or one item at a time within the Plant. The movement may be horizontal, vertical or
combination of horizontal or vertical. Material Handling is the movement, storage, control and
protection of materials, goods and products throughout the process of manufacturing,
distribution, consumption and disposal. The focus is on the methods, mechanical equipment,
systems and related controls used to achieve these functions. Briefly, Material Handling is the
moving of materials from the raw stage through production to ultimate Customer with the least
expenditure of time and effort so as to produce maximum Productive Efficiency at the lowest
Material Handling cost.

Material Handling is concerned with motion, time, quantity and space. Material Handling
Institute describes this as follows:

1) Material Handling is MOTION. Parts, material and finished products must be moved from
store to location. Material Handling is concerned with moving them in the most efficient manner.

(2) Material Handling is TIME. Each step in any manufacturing process requires that it supplies
are on hand the moment it needs them. Material Handling must assure that no production process
or customer need will be hampered by moving material arranged of location too late or too early.

(3) Material Handling is QUANTITY. Rate of demand varies between steps in the
manufacturing process. Material Handling has the responsibility of being sure that each location
continually receives the correct quantity of parts.

(4) Material Handling is SPACE. Storage space, both active and dormant, is a major
consideration in any building as space costs money. Space requirement are greatly influenced by
the Material Handling flow pattern.

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DEFINITION'S OF MATERIAL HANDLING

1) BASIC DEFINITION:

Materials handling may be defined as the art and science of movement,

handling and storage of materials during different stages of manufacturing considered as
material flow into, through and away from the plant. It is in fact, the technique of getting
the right goods safely, to the right place, at the right time and at the right cost.

Material Handling is the art of implementing movement-economically and safely. In the classic
sense, Material Handling is the act of creating Time and Place utility, as distinct from
Manufacturing, which creates form utility. The proper application of Material Handling
knowledge will result in the smooth integration of all the process in an enterprise into one
efficient Production Machine.

2) BY J.R. BRIGHT:

Material Handling is a system designed in order to get the materials. At right a) place b) at right
time c) in right quantity d) in good condition e) at minimum cost.

3) BY HENRY FEYOL :

It is a system of auxiliary equipment that improves flow of material which intern reduces
stoppage in production machines and thus increases productivity of machine. These equipment
are designed in order to supplement the production machines.

4) BY JAMES APPLE :

It is that branch of Engineering concerned with development of special Machinery for

transporting goods through various manufacturing stages to finished product stage. It is
systematic physical movement of material.

5) BY NATIONAL PRODUCTIVITY COUNCIL :

It is a system which forms the single factors of movement, transfer, warehousing, in process
handling and shipping into one interdependent cycle considering the most economical solution
for the respective plant.

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FUNCTIONS OF MATERIAL HANDLING

Material handling embraces three functions namely;

1) Moving

It includes movement between machines or workstations, between department, between

buildings, the loading and unloading of carrier's, as well as much of more handling done at work
place.

2) Storage

It includes storage of material and tools and supplies between and around all of the above
location, including finishing good, warehousing, and the other storage related activities that lie
between the producer and consumer.

3) Selection

a. To choose production machinery and assist in plant layout so as to eliminate as far as possible
the need of material handling; and

b. To choose most appropriate material handling equipment which is safe and can fulfill material
handling requirement at the minimum possible overall cost.

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OBJECTIVES OF MATERIAL HANDLING

All tangible and intangible benefits can be reduced to four major objectives. The application of
material handling methods and equipment to be of greatest benefits should be governed by the
following:

1) REDUCED COSTS:

Cost-Reduction programs have two broad goals; either to reduce the cost of Material Handling or
to reduce total production cost; by improved handling procedures. The latter concept net
reduction in total manufacturing costs. The Ways in which cost reductions are realized through
improved material handling are;

i. Reducing material handling labour.

ii. Reducing the Material handling work done by direct labour. High-skill and high-cost
labour should not be assigned low-skill and low-cost labour.

iii. Reducing indirect labour associated with material handling activities, such as shipping,
production control personnel, inspectors, etc.

iv. Reducing waste and damaged materials through more careful handling.

v. Reducing paper work and associated clerical help through handling systems that
minimizes control requirements.

vi. Reducing the amount of material in the system by faster through-put and less in-process
storage.

vii. Reducing the amount of subsidiary materials such as packaging materials and other
protective devices such as trays, racks and special containers.

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2) INCREASED CAPACITY

Material handling improvements can increase capacity in the following ways,

a) Better space utilization

Modern storage systems make use of "AIR RIGHTS" by means of racks or

containers that stack upon each other when full and nest completely when empty, e.g. handling
systems, particularly cranes and conveyor can operate in unused space above production
activities. They can be arranged to operate outside buildings in unnecessary stairways, through
underground passage-ways, or other unusable space. This can release prime space for production
and storage. The net result is a great increase in space utilization and handling efficiency.

b) Improving the layout to reduce travel or excessive waste of spaces

By analyzing the flow of materials between operations, the volume involved in

the flow paths and the timing of material movement, it is usually possible to reduce travel time
and space needs. Rearranging equipment and providing handling systems that reduces the
distance material must travel are usual practices.

c) Higher equipment utilization

Many pieces of expensive production equipment do not operate at their potential

capacity because are limited by the rate at which materials are supplied to, or removed from, the
equipment or the work area. A proper handling system, or efficient control of an existing
handling system can greatly increase production equipment utilization.

d) Faster loading and discharge of common carriers:

The adaptation of portable conveyor systems & cranes to the loading of motor
carriers greatly reduces loading time. Thus the transportation unit can spend more time moving
and less time sitting the loading dock. This not only lowers operating cost but reduces the
number of docks or terminal spaces required, with a corresponding reduction in loading crews
(workers) and of supervision.

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3) IMPROVED WORKING CONDITION

a) Safety to men, materials and associate equipment:

These may be enhanced by a proper material handling system. Insurance cost.

Accident cost, lost time associated with accidents, etc. is all reduced by proper material handling.
Material and equipment damage are also greatly reduced.

b) Easier jobs

When heavy objects must be handled, the rate of output may be significantly
affected by the physical ability and condition of the operators. Moreover, heavy work can only
be done by men, and often only by young men. Many handling system have been justified in
part, by the fact that they have taken the high effort out of the task, resulting in a steadier flow of
work throughout the day and in higher production. It also may mean lower employee turnover,
less training on replacement workers and better morale in the work force.

c) Lighter Work

If the work is physically lighter, it may be possible to use operators at different

job classification i.e. at lower wage rate.

d) Fool proof operation:

In some activities it is also too easy for an operator to become confused and to
direct material to a wrong location, to use the wrong amount, to mishandle or damage materials,
or to otherwise disrupt production operation. Handling systems are sometimes installed to insure
that such errors will not happen. In the mixing of fertilizers, foods, and other bulk products that
are formulated to order, this may be very attractive benefit.

4) IMPROVED SALABILITY OF PRODUCTS

Handling systems often enhance the value of a product to the customer. The
adaptation of such handling system may make the difference in the customer's decision to use
one vendor instead of another. This may be accomplished by the following means.

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a) Speed of service:

If the handling procedure can provide goods or materials promptly, accordingly to

the customer's desire, or with a significant time advantage over competitors, it may be the prime
reason that business is obtained or retained.

b) Helping customers cut costs

The development of the unit load has enabled vendors to help customer cut there
of cost since they need not handle individual items or undertake the expense of palletizing on
their own docks.

The reduction in packaging or packing materials and their cost is sometimes

obtained through unit load techniques. This may enable the vendor to cut his cost to the
customer. Also, the use of materials by the purchaser may be simplified by proper unit load
design thereby reducing the cost of unpacking and disposing of the packaging material. Unitizing
by the vendor may be done at the end of his assembly lines, or other final operations.

C) Sales value of an outstanding installation :

While it might be hard to prove that a handling system is justified in promotional

value alone, a tremendous amount of publicity can accrue to a truly outstanding system. Several
managers have been heard to argue vigorously that by taking prospective customers through their
new factories, the visitors have become so impressed that an order was obtained because of the
impression of efficiency, quality and service conveyed by the installation. An outstanding plant
is admired by employees as well as customers.

In brief, the primary objectives are;

1. To save money

2. To save time

3. To save men

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PRINCIPLES OF MATERIAL HANDLING

The principles presented here represent an accumulation of experience equivalent

to untold years of practice. They are adapted from those stated in the literature, with certain
changes made for clarification and with several new one added to round out the coverage of the
field. In reviewing the principles it will be found that nearly every one applies to several aspects
of Material Handling and aids in accomplishing one or more objectives.

1. PLANNING PRINCIPLE:-

All Handling activities should be planned.

DESCRIPTION:

If there is one principle on which all should agree, it is that handling activities
should be planned, and not left to chance. Remember, Handling may account for 25 to 80 percent
of all the productive activity. Management most certainly deserves to have this sizable portion of
total activity planned - not left to chance.

SUGGESTIONS FOR CARRYING OUT THE PLANNING PRINCIPLE:

a) Avoid placing material directly on the floor, without a pallet or other support underneath.

b) Assure adequate storage space at the workplace for the proper amount of material, both ahead
of and following the operation being planned.

c) Plan to use the same container throughout the system; avoid frequent changes of containers.

d) Consider floor Load capacities, ceiling heights, truss capacities, column spacing, etc.

e) Apply the principle of Motion Economy

f) Provide necessary clearances in and around each work place – for proper handling of materials
and for maneuvering handling equipment.

g) Arrange for instruction for each operator in the correct method.

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h) Plan for correct location of material supply and disposal in work in work area.

i) Provide adequate means for scheduled scrap removal.

j) Plan for productive operations and inspections to be done during material movement.

k) Combine operation to eliminate intermediate handlings.

l) Do make judicious use of Manual Handling.

m) Plan to minimize walking.

2. SYSTEMS PRINCIPLE:-

Plan a system integrating as many Handling activities as is possible and

coordinating the full scope of operations (receiving, storage, production, inspection packaging,
warehousing, shipping, and transportation.)

DESCRIPTIONS

Each Handling activity should be considered a portion of the whole Handling

system, and planned as an integral part of the system.

SUGGESTION FOR CARRYING OUT THE SYSTEMS PRINCIPLE:

a) Consider the entire scope of the handling activity, i.e., beyond the area under immediate
consideration.

b) Plan flow between work areas.

c) Integrate operations into the handling system, such as : processing , inspect ion , packaging ,
etc

d) Arrange for alternative Handling Methods - in case of emergency.

e) Move material directly to production whenever practical, rather than an intermediate storage
area- to avoid re-handling.

f) Work closely with suppliers, customers and carriers.

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g) Be aware of future requirement changes in product, process, volume, etc. - and allow for
necessary flexibility.

3. MATERIAL-FLOW PRINCIPLE:-

Plan an operation sequence and equipment arrangement to optimize material flow.

DESCRIPTION:

The Material-flow pattern is actually the backbone of most production facilities,

and one of the first steps in Planning a Material Handling systems is the design of the Material-
flow pattern. This may be largely determined by operation sequence, which in turn will
determine the pattern of equipment arrangement.

SUGGESTIONS FOR CARRYING OUT THE MATERIAL PLOW PRINCIPLE:

a ) Avoid crowded conditions.

b ) Eliminate obstacles from Material flow.

c) Carefully observe building and carrier restrictions.

d) Plan movement in direct path.(Avoid backtracking, zigzag flow, crooked paths .

e) Arrange for alternate path, in case of difficulty.

i) Be aware of cross traffic and take necessary precautions. Avoid traffic Jams.

g) Keep related work areas close together.

h) Use Product-type layout when possible

i) Plan proper location of subassembly and feeder lines.

j) Comb inc operations to eliminate handling between times.

k) Plan for definite pickup and delivery locations.

l) Minimize moves between Floors, Buildings.

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4. SIMPLIFICATION PRINCIPLE :-

Reduce, combine, or eliminate unnecessary movements and /or equipment.

DESCRIPTIONS:

Simplification is one of the by-words of efficiency, motion economy, and many

other aspects of industrial operation. .It should likewise be a goal in Material Handling. As used
here, it implies, primarily, the reduction or elimination of moves as well as the elimination or
reduction of equipment that is not being properly utilized.

SUGGESTIONS FOR CARRYING OUT THE SIMPLIFICATION PRINCIPLES:

a) Apply the principle of motion economy

b) Reduce or eliminate long or complicated Moves.

c) Plan direct moves.

d) Deliver materials to correct location (spot) the first time¯

e) Avoid unnecessary Handling.

f) Eliminate re-handling.

g) Plan to use materials out of original container.

h) Minimize number of moves per process.

i ) Minimize walking.

j) Avoid use of variety of equipment types and / or makes.

k ) Provide proper number of containers.

l) Plan for adequate equipment capacity.

m) Do not mechanize for the sake of mechanization.

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5. GRAVITY PRINCIPLE:-

Utilize gravity to move material whenever practicable.

DESCRIPTION:

This is certainly a very obvious principle- but one that is all too frequently
overlooked because of its simplicity. Many material moves can be made efficiently by proper
application of the Law of gravity.

SUGGESTIONS FOR CARRYING OUT THE GRAVITY PRINCIPLES:

a) Use Roller or wheel conveyors, slides chutes, etc., between operations.

b) Use ramps between varying work or floor levels.

c) Sloping floors (slight) can be utilized where considerable hand truck movement is in one
direction.

d) Use chutes to connect conveyors at different levels.

e) Use spiral chutes to connect conveyors between floors.

6. SPACE UTILIZATION PRINCIPLE:-

Make optimum utilization of building cube.

DESCRIPTION:

Factory and warehouse space are expensive. Therefore, wasted space is wasted
money. Inherent in this principle is that both square feet and cubic feet are to be given
consideration. One square foot contains as many cubic feet as "clear" height will permit items to
be stacked.

SUGGESTION FOR CARRYING OUT THE SPACE UTILIZATION PRINCIPLE:

a) Move equipment and operations closer together (not too close)

b) Eliminate or condense "temporary" storage piles of materials

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c) Stack material to use full cube available.

d) Use racks to permit higher stacking.

e) Use stacking containers to permit stacking without racks.

f) Analyze space utilization to "find" additional square or cubic feet.

g) Check on economic order quantities and economic lot sizes for possibilities of reducing
amount of material required on hand.

h) Clean out storage areas and dispose of obsolete or useless materials.

i) Use narrow-aisle handling equipment to permit reduction of aisle widths.

j) Use Handling equipment not requiring fixed floor space , i.e., mobile or overhead Equipment.

k ) Don't pile materials directly on floor - use pallets, skids , etc., to permit stacking.

l) Consider reinforcing floors to permit heavier floor loads and stacking to greater heights.

m) Use collapsible container to save space required by empties.

n) Consider possibility of nesting parts products, containers.

o) Review possibility of increasing inventory turnover.

p) Design Pallets etc. to effectively utilize space between columns.

7. UNIT SIZE PRINCIPLE:-

Increase quantity, size, weight of load handled.

DESCRIPTION:

Wherever practical, individual items should gathered and made up into loads.

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SUGGESTIONS FOR CARRYING OUT THE UNIT SIZE PRINCIPLE :

a) Examine every move of one item for possibility of making up unit loads.

b) Purchase materials in unit loads.

c) Work with vendors towards design of larger unit loads.

d) Use containers to consolidate items.

e) Use uniform, standardized containers.

f) Design pallet pattern to efficiently utilize pallets and storage space.

8. SAFELY PRINCIPLE:-

Provide for safe handling methods and equipment.

DESCRIPTION:

It should be obvious that all handling activities in operations or being planned -

should be safe, since an objective of material handling is to improve working conditions by
providing safer work situations. A high proportion of all industrial accidents is in the material
handling aspects of the production activity.

GENERAL CAUSES OF INDUSTRIAL ACCIDENTS:

I) Unsafe Conditions, Environmental Causes.

a) Inadequate guarding ( of Conveyors, Trucks, etc )

b) Unguarded (equipment.)

c) Defective condition (of equipment).

d) Hazardous arrangement (stacks of material, pallet loads, arrangement of trucks, etc._

II) Unsafe Acts of Persons.

a) Operating without authority (trucks, etc.)

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b) Operating at unsafe speed.

c) Making safety devices inoperative (governors, etc.)

d) Using unsafe equipment (needing repairs)

e) Unsafe loading (machines, conveyors, cranes, trucks, etc.)

f) Taking unsafe position or posture (in stacking, in trucks, etc)

g) Working on moving equipment (trucks, conveyors, etc.)

III) Unsafe Personal Causes

a ) Improper attitude (taking chances, disregarding instructions)

b) Lack of knowledge (poor instructions, new man, unskilled)

SUGGESTION FOR CARRYING OUT THE SAFETY PRINCIPLES

a) Install adequate guards and safety devices on handling equipment.

b) Keep handling equipment in good operating condition.

c) Furnish mechanical handling equipment for difficult, hard, hazardous handling activities and
to handle dangerous materials.

d) Do not permit handling equipment or devices to be overload or operated over rated capacity.

e ) Keep aisles clear and uncluttered .

f ) Install adequate lighting.

g) Maintain floor in good condition.

h) Avoid crowded conditions.

i ) Provide good house-keeping.

j ) Stacks material carefully.

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k) Be sure operation are properly instructed in method and / or use of equipment.

l) Provide mechanized part feeding and removal devices,

m) Plan for removal of undesirable dust fumes, smoke, etc.

n) Isolate inherently dangerous equipment, operations etc.

o ) Allow Liberal factor of safety.

9 .MECHANISATION/AUTOMATION PRINCIPLE :-

Use mechanized or handling equipment when practicab1e.

DESCRIPTION:

Used judiciously, mechanized or automated handling devices and equipment can

be of extreme value in increasing material handling efficiency. However, handling operations
should not be mechanized for the sake of, mechanization alone, nor should they be over -
mechanized in terms of the function to be performed.

SUGGESTION FOR CARRYING OUT THE MECHANIZATION/AUTOMATION

PRINCIPLE:

a) Consider use of mechanization for:

o Large quantities or volume of materials

o Frequent , repetitive moves, even though short

o Long moves

o High - effort, hazardous, difficult moves.

o Two - man lifting/moving tasks.

o Replacing excess manual handling

o Moving heavy containers.

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 o Handling and done by direct labour.

o Scrap removal.

b) Do not over mechanize.

c) Design or select containers suitable for Mechanical Handling.

d) Use equipment that is self controlled and self programmed when practicable .

e) Consider mechanization of people flow and equipment movement as well as material

movement.

f) Mechanize communication to facilitate material movement.

g) Utilize automatic couplings, switches transfer, etc.

10. EQUIPMENT SELECTION PRINCIPLE :-

In selecting Handling equipment, consider all aspects of the MATERIAL to be

handled, the MOVE to be made, and the METHOD(S) to be utilized.

DESCRIPTION:

This principle is primarily a reminder to be extremely careful in selecting &

specifying handling equipment by being sure that al1 phases of the problem are thoroughly
analyzed.

SUGGESTIONS FOR CARRYING OUT THE EQUIPMENT SELECTION PRINCIPLE:

a) Select versatile equipment to carry out a variety of tasks and adjust to changing conditions.

b) Select standardized equipment to avoid a multiplicity of makes and models - and to minimize
inventory of repair parts.

c) Prove that the move is necessary.

d) Compare Cost on the basis of dollars per unit handled,

e) Consider indirect or intangible factors in justifying investments.

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EFFICIENCY OF MATERIAL HANDLING

The efficiency of material handling could be judged by the following principles:

1. "Equipment built for motion should be kept in motion; idle Equipment should be kept
inexpensive".

2."Continous material movement is most economical"

This principle states that materials handling efficiency is Greatest when it

approaches a steady flow of materials, in as straight as possible, with minimum interpretations
and minimum backtracking and where movements approach continues rather than intermittent
flow. It is not; always possible, in practice, to completely achieve the objective of this rule.
However, it is the target towards which we Aim our thinking. Conveyors systems, both overhead
and floor types, are excellent examples of the application of this idea.

3. "Materials' handling economy is generally directly proportional to the size of load

handled"

We all recognize, however, that as the load size increases There is a point reached
beyond which it becomes more costly, and less Practical. From this, it is also logical to conclude
another important axiom: "there is a definite ideal load size in a given material handling
operation ".

4. "Storage space is best measured in terms of cubic content"

The "space saving" rule states that equipment should be Selected so as to allow
utilization of cubical space for temporary and Permanent storage.

5. "Material Handling Operations are only as good as the physical layout of the plant will
permit"

Good layout of machinery, fixed equipment and aisle areas are fundamental to
good product handling. Where you are erecting a new building, you have unlimited opportunities
to layout the various areas allowing proper aisle widths, sufficient storage areas, and erect your
Plant with material movement in mind.

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6."Standardization of methods, types of equipment and sizes of Equipment is desirable for
good material handling efficiency"

The most efficient system is generally that which is Simplest. It is not hard to
understand why standardization is important, because it permits interchangeability of equipment
between Department and plants; it allows stocking of fewer replacement parts; It simplifies
employee training in the equipment. In addition, it-enables management to shift equipment from
department to department Depending on the production load changes. Another aspect of
standardization for the sake of economy in that of choosing equipment That is considered
"standard" by the material handling equipment Manufacturer.

Standardization does not require that only one size container, for example, is
permissible; rather it implies the fewest number possible. In some instances it would be
impossible to standardize on one size container especially where a large number of Different
parts are handled. Repeat in standardization does not mean one it means the fewest number.

7. "The value of equipment is directly proportional to its Flexibility"

The greater the variety of uses and applications to which a Piece of equipment
can be put, the greater is its flexibility, and the More valuable it becomes from a material
handling standpoint. Flexibility in equipment offers the distinct advantage that It is readily
adaptable to any unforeseeable changes that comes up from Time to time. in any progressive
organization methods and equipment and Constantly in the state of change and improvement.
Flexible machinery Takes these changes in stride, and does not have to be scuttled before its
completed.

8. " The use of mechanized equipment instead of manpower generally increases efficiency
and economy in handling."

By the use of mechanized equipment instead of manpower, Efficiency and

economy in material handling is obtained. Mechanized equipment must, of course, be able to
justify Itself on a rupee- and- basis, like any investment management may Make. Some of the
advantage of mechanized equipment is as follows, to both management and labor;

(a) Over all safety is increased

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(b) Workers are less fatigue at the end of the day

(c) Work done by power is generally cheaper

(d) Larger volume of work handled per operator is accomplished

(e) Greater speed of handling is obtained, resulting in less Idle time for skilled workers, better
production control, a larger volume of goods manufactured and displaced workers put on other
jobs in the plant.

9. "Productivity increases as working conditions become safer".

Unless mechanized equipment makes s given handling job safer for the plant
personnel, it will costlier in the last analysis. In material handing there is an old axiom, "if it is
safe, it is not worth it "

10. " The ratio of dead weight to payload must be kept minimum."

Mechanical handling equipment which is unencumbered by excessively

unnecessary dead weight can perform at top efficiency. For example, an aluminum conveyor is
now being substituted in many instances for heavier metal (steel) conveyors where operations
require moving the handling conveyor. Another good example is the reduction in weight of
highway trailers and unit load containers, pallets and skids to eliminate the necessity for hauling
excess weight.

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LIMITATIONS AND NEGATIVE ASPECTS OF MATERIAL HANDLING
SYSTEMS

It is bad engineering and worse management practice to look only at benefits and
to ignore limitations. Handling systems, at times, have consequences that may be distinctly
negative. These too, should be evaluated before the changes are adopted. Some such possible
disadvantages are

1) Additional capital investment:

It must be verified that the cost of the handling system is more attractively
invested in the system under consideration than in any other part of the business. It should be
assured that the gains expected are not based upon a more mechanized system v/s present
practice, but rather the proposed new system v/s the best version of present practice.

2) Loss of flexibility

Proposed system must be flexible enough to be economically and quickly adapted

to the likely range of changes in the product or production techniques. If not, change over cost
and time loss must be included in the evaluation, or it must be shown that the investment will be
satisfactorily recovered before the proposed handling system will require modification.

3) Vulnerability to downtime;

Since a handling system is a composite of mechanical and electrical machinery

and controls, it must be recognized that it may break down at any times. What happens than how
long will it take to get back to service and what will be done when repairs are being made. If this
is serious-, the handling system must be re-design to provide for better reliability, for alternate
handling techniques in event of breakdown or for in-process- storage that can feed subsequent
operations while be system is being repaired. All of these can result in additional costs that must
be charged against the handling system.

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4) Maintenance

If it is planned to install additional handling mechanization, almost surely it will

be necessary to take on more maintenance. This may mean the addition of new maintenance
skills, or a provision for obtaining them when needed. It may be that extra pieces of handling
equipment should be provided for use during downtime or breakdowns. It may be necessary to
plan for periodic overhauls by skilled technicians. It may be necessary to carry a large supply of
repairs parts, or a new or enlarged maintenance facility and staff may be required.

5) Auxiliary equipment costs

Frequently a new handling system carries with it requirements that involve hidden
or unrecognized costs for auxiliary equipment or service, e.g. adopting a fork lift truck means
more than taking on the mobile equipment, its power supply, and its maintenance. The point of
identifying this drawback is neither to discourage nor disparage the adaptation of modern
handling methods, but to emphasize that a careful balance of the total benefits and limitations is
required before wise decisions can be reached.

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PURCHASE MANAGEMENT

Purchasing is a function of procuring goods and services from sources external to

the organization. In the words of Alford and Beaty,”Purchasing is the procuring of materials,
supplies, machine tools and services required for the equipment, maintenance, and operation of a
manufacturing plant.” According to yet another authority,” Purchasing is the procuring of
materials, tools, stores and services required for the manufacture of a product, maintenance of
the machines, and un-interrupted running of the manufacturing plant in a manner that guarantees
the marketing of the company’s products in the quantities desired, at the time promised and at
the competitive price consistent with quality desired.” Purchasing in essence is the task of buying
goods of right quality, in the right quantities, at the right time and at a right price.

Since raw materials, components and services account for a significant as much as
50 to 70% proportion of the company’s total expenditure, effective purchasing, therefore, can
result in a substantial savings to the company. Mere one percent saving can give benefit
equivalent to eight to nine percent rise in sales volume.

Traditionally, purchasing was regarded as one o the activities of the production

management.

However many progressive managements have already realized that in lieu of

changing business conditions, growing competition, continual in the costs of inputs, purchasing
must be given status equal to that of other major functions.

Objectives of Scientific Purchasing:

Objectives of scientific purchasing include the following:

i) To procure at a competitive price the needed materials, supplies, tools and services of the
right quality, in the right quantity and at the right time.

ii) To maintain continuity of supply to ensure production schedule at minimum inventory

investment.

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 iii) To ensure the production of goods of better quality the competitive price by procuring
materials which best suit the product and the purposes for which they are intended.

iv) To suggest better substitutes to materials which are currently being used with a view to
lower cost and maintain quality of the products.

v) To render assistance in standardization, variety reduction, value analysis and other cost
reduction programmes.

vi) To advise on probable prices, deliveries, and performance of items under consideration
by the design, development and estimating department.

vii) To create goodwill and enhance the company’s reputation for fairness and integrity
through dealings with the suppliers.

viii) To enable company to maintain competitive position and earn a fair return on its
investment.

Methods of Buying:

The buying department of the company is responsible to provide goods and services required by
the company at the minimum cost and optimum quantities. The request to procure may be
received either from stores department or from one of the functional departments.

Such requests may be received:

i) Either for direct materials or for indirect materials.

ii) Either for production items or for non-production items

iii) Either for low priced items or for expensive items

iv) Either for items sold at premium or for items sold at discount

v) Either to meet immediate needs or satisfy needs at a later date

vi) Either for seasonal items or for non-seasonal items.

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Different Methods of Buying:

1) Tender Buying:

Government department and public sector undertakings in India follow this

method of buying. Private sector organizations to adopt tender buying if the value of the
purchase exceeds the prescribed limits, say Rs. 25000 or Rs. 50000 fixed by the management as
policy decision. Salient characteristics of the system are:

• The buying department establishes bidders’ list and invites them to submit bids.

• Bids on receipt are evaluated by comparison and the right supplier is selected.

Advantage of the method:

• Tender buying is the purchaser’s most important single tool to select qualified supplier on
the basis of competitive prices.

• It eliminates possibility of favoritism, patronage, and personal preferences.

Disadvantage of the method:

Tender buying is costly and time consuming and therefore used by private sector undertaking
only when the value of purchase is high.

2) Group purchasing

Group purchasing refers to ‘buying of items of trivital value in a single purchase order.’

Characteristics

• Minimum and maximum levels are fixed for each item within each classified group.

• Stocks on hand are reviewed periodically, say once a month or once in 12 months.

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 • Quantity equal to the difference between the ‘maximum level’ and stock on hand is
procured for each item

3) Hand to mouth buying

Hand to mouth buying also called buying according to the requirements refers to
the frequent purchases of an item in small quantities.

Characteristics

• Purchases are made only when demand arises.

• Purchases are made to cover immediate requirements.

• Quantity purchased is generally small though at time at large quantity may be purchased.

• The terms of contract is negotiated.

Advantages

• Lower inventory investment.

• Low carrying charges.

• Reduced deterioration and obsolescence of materials.

• Limitation of losses from price declines.

Disadvantages

• Comparatively higher price due to urgencies and loss of quantity discounts.

• Possible losses occasioned by an upward jump in prices.

• Acceptance of sub standard goods in emergency.

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4) Scheduled buying

Scheduled buying is the process of procuring an item in staggered deliveries

according to the delivery schedule furnished to the supplier by the buyer.

Characteristics

• A purchase order covering annual requirements is placed with the supplier.

• The supplier is given the estimate of the procurement needs covering a mutually agreed
period of time.

• Fresh delivery schedules are given to the supplier prior to completion of the previous
schedule.

• Monthly deliveries are usually specified except for perishable material, bulky items and
others required in large quantities or where supplier has setup production facilities
especially for the buyer.

Advantages

• Both buyer and seller enjoy the savings resulting from regularity of production and small
inventories.

• Buyer is assured of supply of goods while supplier is assured of business.

• Supplier can effectively plan his factors of production while buyer can plan his
requirements of finance.

5) Blanket orders

Blanket orders refer to the purchase of variety of items from single sources, usually a
middleman.

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Characteristics

• A blank order specifies the category of items covered by the order,

• The items covered by the order generally have low unit value.

• More than one middleman may be selected to avoid hold-ups in case of non-availability
of an item with one.

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STORE MANAGEMENT

Storekeeping is a service function which deals with the physical storage of goods
under the custodianship of a person called storekeeper or stock controller. Goods stored may be
either, stores or stock. Unworked materials or raw materials are usually referred to as stores and
the place where they are kept is known as stores room. Finished products ready for shipment are
usually called stocks and are housed in a place called stock-room. Storekeeping, therefore, is that
aspect of materials which is concerned with physical storage of goods.

Store functions concern receiving, movement, storage and issue of items- raw
materials, bought out parts, tools, spares, consumables etc. –required for production,
maintenance and operation of the plant and finished goods until is dispatch to customers. Store,
therefore, is the custodian of all goods that are received in the company until they are consumed
or sold and naturally it assumes the responsibility of receiving, storage, preservation, issue, and
accounting functions.

According to Maynard responsibilities of store management are ‘to receive

materials, to protect them while in storage from damage or unauthorized removal, to issue
materials in the right quantities, at the right time, to the right place, and to provide these services
at the least cost.”

Benefits of storekeeping

Storekeeping, it is now realized, is a much as science as production or marketing.

It is a key result area for management. Efficiency in production, maintenance and distribution
largely depends on the efficiency of the store department and its personnel at the operational
level. Inventory management with its impact on the profitability of a company relies ont the
efficiency with which store personnel maintain records, implement procedures and report on
performance.

Store management benefits the organization in the following ways

• Scientific stock control, it reduces losses due to accumulation of inventories.

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 • Efficient stores issues, it reduces down time in production and increases profit.

• Periodic reviews, it detects obsolete and non-moving items and helps the firm to get rid
of unproductive inventory.

• Follow up with purchase; it helps to avoid stock outs and the production losses.

• Paper records keeping, it provides exact picture of inventory in store to higher

management.

Rules for preservation

Five common rules for preservation

1. Materials should not be allowed to have direct contact with the floor.

2. All items those with limited life in particular should be issued on first in first out
principle.

3. The user department should be informed of the expiry date in advance.

4. The store should be kept free from rodent menace for which the following measure is
essential.

a. The floors should be in concrete or bricks.

b. The edges of the doors and windows should be lined by tin plates.

c. Windows sills should be kept at least one meter above the floor level.

5. Store should also be given periodically, a spray of suitable pesticides or fungicides to get
rid of termites, white ants and fungi.

Precaution and specific method of preservation

1. Metals (iron and steels)

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 • The material should be stored at least 15 to 20 cm above the ground.

• Metals should be either painted by anti-corrosive paints or covered by a film of oil,

grease or mineral jelly.

2. Wood and wood products

• They should be treated with creosote oil which makes the wood unattractive to insects to
eat.

• They should be kept away from place where excessive heat is generated.

3. Textiles

• Small textiles goods should be stored in airtight almirah and boxes.

• Napthalen balls should be placed between layers and packed.

4. Leather goods

• They should be periodically turned to change their location.

• Fungus growth should be wiped off with a cloth.

5. Chemicals

• The chemicals should be stored in a cool and dry place.

• All containers- drums, carboys, etc. – must be properly corked.

6. Lubricants

• Drums should be kept horizontally in 2’ o clock position on dunnage, covered by

tarpaulis.

7. Cutting tools

• Cutting tools are affected mainly corrosion and bad handling.

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• The manufactures of drills, reamers, taps, milling cutters etc. usually apply a coat of
grease before wrapping them in polythene layers.

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Security of stores

Security of stores include measures against

• Daily closing of stores and custody of keys

• Theft by outsiders

• Pilferage by employees

• Malpractices by stores staff

• Prevention of fire

• Menace of redents and termites

1. Daily closing of stores and custody of keys:

• Daily closing of stores should be properly supervised.

• Stores keys must be numbered and registered.

• Key movement register should be maintained. Any one collecting and

depositing a key particularly after the factory hours, should be required to
sign the register.

• All duplicate keys should be kept under the custody of the senior officer.

2. Theft by outsiders

• The entire factory should have a high compound wall or high barbed wire
fencing.

• The number of windows, glass shutters and open ventilators should be

minimum possible.

• Security guards should be put on duty at strategic points.

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 • Outsiders should not be permitted to enter inside the store beyond the
serving counters

• Stores should be insured against burglary.

3. Pilferage by employees

Pilferage is gradual removal of material in small quantities by the employees of the

company.

• Only authorized personnel should be allowed to enter the store.

• No personal property should be allowed to be kept inside the store.

• Fresh materials may be used against return old ones

• Surprise checks of a section of store items should be done now and then.

• Store staff should be searched before they are allowed to leave the main
gate after day’s work

• Immediate enquiry should be conducted as soon as any case of

malpractice is brought to light.

4. Malpractices by stores staff

Malpractices are the manipulations by store personnel with active help of outsiders.

• Outgoing trucks, trolleys, parcels etc. should be thoroughly checked.

• Gate passes should be made to take material out of the company.

• Indemnity bonds or bank security must be taken from stores employees at

the time of employment.

5. Prevention of fire

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 Fire is an accident caused by chemical reaction between combustible and oxygen.

• Careless handling, storage and disposal of inflammable materials.

• Open electrical circuits causing short circuits.

• Smoking by staff and clients in the store.

• Lightning

• Spark from shunting engine.

• Auto-combustion.

The following precaution should be taken

• Doors and staircase should be made of fire resistant materials.

• Smoking should be prohibited in and around the store houses.

• Adequate earthing should be provided to the external and internal wiring

of store buildings.

• Materials should be properly stored. Leakage of inflammable oils, greases

and fluids should be prevented.

• Defective wiring should be immediately replaced to eliminate possibility

of fire due to short circuit.

• Exits should be provided with panic bolts and should open outwards.

6. Menace of redents and termites

• If rodents menace is observed, the stores should be fumigated and rat

poison traps kept.

• For termites, white ants and fungi, suitable pesticides and fungicides
should be sprayed.

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36
MATERIAL HANDLING EQUIPMENT

The nature of industries, manufacturing processes involved and types/designs of machines &
plants in operation are innumerable, consequently the variety of materials handling equipment
and systems used in industry is also very large in number and diverse in concept and design.
New equipment are being designed and manufactured continuously. It is difficult even to
mention about all types of materials handling equipment being used, detailed discussions on their
functions and design aspects is just impossible within the limited span of the present book.
It is therefore, essential to classify such large number of materials handling equipment into a few
``basic types'' for meaningful discussion of these equipment. There has been many attempts by
stalwarts in the field of materials handling to classify equipment in different ways.

Industrial Vehicles/Trucks
These are manual or power driven vehicles suitable for movement of mixed or unitized load,
intermittently, where primary function is maneuvering or transporting. The vehicle/truck is
physically moved along with the load from one point to another via a flat or slightly inclined
route. This classification excludes highway vehicles, railroad cars, marine carriers and aircrafts.

a) low lift b) high lift c)operation of truck

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Unitized load on special racks with wheels which can be moved by forklift truck or by hand

Conveyors
These are gravity or powered equipment commonly used for moving bulk or unit load
continuously or intermittently, uni-directionally from one point to another over fixed path, where
the primary function is conveying of the material by the help of movement of some
parts/components of the equipment. The equipment as a whole does not move.

A flat belt conveyor with drive control

Roller conveyor

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Hoisting Equipment
This equipment are generally utilized to lift and lower and move unit and varying loads
intermittently, between points within an area known as the reach of the equipment, where the
primary function is transferring. Hoisting equipment may also be mounted on a powered vehicle
when the movement of the lifted load is not limited within a fixed area of operation.

Cranes

Bulk Handling Equipment/System

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In the large process industries and constructional projects, a wide range of heavy equipment is
used for handling and storage of large amount of bulk solids. These are called bulk handling
equipment.

Robotic Handling System

Specially designed robots are increasingly being used in materials handling application,
particularly in loading and unloading of jobs to and from a machine or a machining cell.

Containers and Supports

This classification generally includes all types of secondary devices and aids which are utilized
for storing, unitizing and movement of materials. Different types of pressure, tight, loose, closed
and open-top containers; platforms and coil supports and different securements such as
strapping, cinches (chain, rope, cables with tighteners), bulkheads, dunnage etc. are examples of
secondary devices and aids.

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Conclusion
Material handling is an integral part of manufacturing activity. it does not add
value to the product but adds to its cost. Material handling problems are largely due to problems
of bad plant layout. Many a problems of material handling can be avoided by improving the
existing plant layout.

Scientific purchasing is the function of procuring materials, parts, tools, supplies

and services of right quality, in the right quantities and at the right time.

Storekeeping concerns receiving, movement, storage and issue of material

required for production and maintenance and operation of the plant.

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Bibliography

• www.google.com
• www.wikipedia.com
• www.businessdictionary.com

Books
• Materials Handling by Dr. Eng. M. A. Soliman
• Production Management by Prof. Jhamb

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