4.material Handling and Layout

MATERIAL
HANDLING
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

SYSTEMS
Dr. Sandhya
Logistics Makkar
Management, 3e Author: Vinod V. Sople
Lal Bahadur Shastri Institute of management
2
Material handling is the movement, protection,
storage and control of materials and product
As a process, material handling incorporates a wide

range of manual, semi-automated and automated

equipment and systems that support logistics and make
the supply chain work.
A company’s material handling system and processes are

put in place to improve customer service, reduce
inventory, shorten delivery time, and lower overall
handling costs
Dr. Sandhya
Logistics Makkar
What factors are important for considering Material Handling
Equipments?
Dr. Sandhya
Logistics Makkar
• Should enhance the warehouse productivity
• Compatible to the storage system and layout
• Not to be underutilized
• Hygiene and human safety
• Cost Implications

• Volumes to be handled
• Speed in handling
• Product characteristics—weight, size and shape
• Nature of the product—hazardous, perishable and crushable
Dr. Sandhya
Logistics Makkar
Material Handling Stages
• Unloading the incoming material from transport vehicle.
• Moving the unloaded material to assigned storage place in the

warehouse.
• Lifting the material from storage place during order picking.
• Moving material for inspection and packing.
• Loading the boxes/cartons on the transport vehicle.
Dr. Sandhya
Logistics Makkar
Material Handling Principles
• Standard equipment should be preferred to keep low capital

investments.
• Equipment designed for continuous flow should be preferred.

• Portable or movable equipments to be preferred.
• Gravity flow should be incorporated in the system design.
Dr. Sandhya
Logistics Makkar
Material Handling Systems
• Manual
• Mechanical

• Semi-automatic
• Automatic
• Information guides
Dr. Sandhya
Logistics Makkar
Selection Criterion
The major criterion for selection of right systems are:
• Units moved per hour

• distance of the movement covered

Higher volumes over large distance require sophisticated
system and higher investment
Dr. Sandhya
Logistics Makkar
Manual handling
Manual handling is used when the volumes are less and investment
in material handling do not ensure more benefit.
It is the cheapest and common method

Low volume, low speed, less distance are the limitations
Cartons should not be more than 20 kgs, manual loading and

unloding is done
Dr. Sandhya
Logistics Makkar
Mechanized System
Mechanized equipment need not be powered equipment e.g
wheeled trolley can be driven manually. It may use simple machines
like lever, pulley with motors attached etc.
The prime consideration is layout of warehouse for free movement

of equipment and goods as equipment requires space
Benefit: Transfer the fatigue from human to machine bringing speed

and reliability in material movement
Mechanization enhances the system productivity
Speed up the flow, reduce damages, safe for human beings to
operate
Dr. Sandhya
Logistics Makkar
11

Wheeled trolley
Dr. Sandhya
Logistics Makkar
• Lift equipment: Moving and lifting inventory

Dr. Sandhya
Logistics Makkar
• Dock Equipments: Ease load and unload
Conveyors

Dr. Sandhya
Logistics Makkar
Carousels
14
Used in order
picking
The units are kept
on an oval track

and moved
towards order
selector
Items selected are
put into cartons
and moved to
packing areas
Dr. Sandhya
Logistics Makkar
Cranes
15

Overhead cranes Stacker cranes
Dr. Sandhya
Logistics Makkar
Semi Automated and Automated Systems
Both mechanized and automated systems are used
Automated systems are customised according to the needs

And is fully computerised
e.G sorting devices powered with conveyor belts, robots, AGVs
https://www.greyorange.com/warehouse-sorting-system
Dr. Sandhya
Logistics Makkar
Semi Automated and Automated Systems
Automated Systems require high investment

Human factor is minimized and restricted to programming and
controlling
Benefits: Speed Accuracy, productivity

Cons: investment, complexity of development and must be synced with
storage system
The system is then connected with computer programming
Dr. Sandhya
Logistics Makkar
18
Other Equipments

Dr. Sandhya
Logistics Makkar
Facility Accessories

Dr. Sandhya
Logistics Makkar
Storage Systems
Bins & Containers

Dr. Sandhya
Logistics Makkar
Packaging Equipment

Dr. Sandhya
Logistics Makkar
• Pallett racks for storage

Dr. Sandhya
Logistics Makkar
LAYOUT
Dr. Sandhya
Logistics Makkar
General warehouse layout
Planning the layout of your warehouse is centred on

balancing two things:
1.Providing enough storage space for your inventory;

2.While still having enough working space for staff and
equipment to move around and complete their tasks.
i.e the objective is optimal storage and movement with

maximum efficiency
Dr. Sandhya
Logistics Makkar
Warehouse Layout should have following
•Receiving new stock area(unloading).
•Unpacking stock area.

•A warehouse office.
•Main storage area.
•Excess, obsolete or dead stock storing area.
•Packing area.
•Shipping station.
Dr. Sandhya
Logistics Makkar
Typical Warehouse Layout
Material Inward and Inspection

Rack/Bin Storage
Bulk Storage
Place
Place
Order Picking Section
Packaging Section
Material Dispatch Section
Dr. Sandhya
Logistics Makkar
27
What other factors to consider for designing of warehouse

Dr. Sandhya
Logistics Makkar
Warehouse Layout Design Guidelines
• Make maximum use of available area.
• Use ‘unitized‘ load system.

• Minimize the goods movement by proper storage
locations.
• Provide flexibility for changes in future.
• Design for safe, clean and secure space.
Dr. Sandhya
Logistics Makkar
How do you determine the exact
location each product should be

stored?
Dr. Sandhya
Logistics Makkar
Labelling areas of warehouse

Dr. Sandhya
Logistics Makkar
Bigger warehouses with more rows may need to add a little
more detail:

Dr. Sandhya
Logistics Makkar
Where will you store what items?

Dr. Sandhya
Logistics Makkar
• Keep better selling products closer to the packing desk
Research conducted on over 200 retailers found that 60% of a

company’s sales tend to come from just 20% of their products.

Meaning you can severely reduce picker walking time by:
Identifying that 20% of products from past sales data in your business;
and then storing these as close to the packing desk as possible.
Dr. Sandhya
Logistics Makkar
• Allocate separate area for slow, fast and medium moving items
i.E Nature of products is important
• Defining the location for obstacles, like staircase, office, buildings

• Defining the minimum path for the movement
• Assigned places for Material handling equipments
Dr. Sandhya
Logistics Makkar
Factors Influencing Warehouse Layout
Design
• Inventory turnover (High it is –near to loading dock)
• Storage method (Storage and open space ratio : 70:30

For automated systems it is 80:20)
• Product configuration( heavy loads vs light units)
• Product characteristics(shelf life-stock rotation,

supervision)
• Housekeeping(clean safe working condition)
Dr. Sandhya
Logistics Makkar
Warehouse Decision
Product
Product Type
Characteristics
• Solid Value
• Liquid • Density/Weight Tactical Decision
Storage allocations
• gases • Perishability
• Order picking
• Hazardous
• Transportation
Resources Strategic Decisions

Objectives
• Cost Reduction Type • Layout
• Competency
level • Equipment
• Stock Turnover • Private
• Financial • Storage scheme
• Productivity • Public
resources
• Contract • IT
Operational Decisions
• Work allocations
• Job scheduling
• Performance monitoring
Dr. Sandhya
Logistics Makkar
Raymonds: Design of Warehouse Operations
• What are the problems faced by Mr. Naik in a

warehouse

• What is the objective of Mr. Naik
• Why according to you the problems have occurred
• What are you recommendations to Mr. Naik
Dr. Sandhya
Logistics Makkar
38

Dr. Sandhya
Logistics Makkar
Q1. Storage Strategy: No Mix or Mix Strategy
Advantages of No Mix Strategy: Disadvantages of No Mix Strategy:
1. Only 1 SKU is placed in one bin 1. Could lead to underutilization
due to variability in number and
2. Improves product visibility
size of pieces
3. Enhances picking efficiency

Advantages of Mix Strategy: Disadvantages of Mix Strategy:
1. More than 1 SKU is placed in one 1. Difficult to retrieve piece
bin
2. Increases the walking time of
2. High Bin Utilization picker
3. Low productivity etc.
Dr. Sandhya
Logistics Makkar
Q1. contd…Use Ex 4
• With the current warehouse layout it is not possible to

adopt no-mix strategy
• Market 1 and 2 alone constitutes 12,006 SKU’s (ex-4)

and only 9,967 bins are available in warehouse for bolt
pieces (total = 10, 504 , rolled bins = 537)
• In order to implement no-mix strategy, around 1500-2000
more bins are required only for mkt1 and 2, i.e. more
space and investment. There is no scope for that
Dr. Sandhya
Logistics Makkar
Raymond has now adopted Hybrid Storage Strategy
• For some markets no mix strategy and for others mix
strategy is adopted
• No Mix Strategy is adopted for Mkt 1,2,4,11(imp)

• Bin dimensions are redefined and vertically partitioned, so
that small SKU can fit in the small compartments within
the bins
• Pallets are introduced(portable platforms for storing and
handling materials)
This has increased the capacity without expansion of WH
The bin utilization has also increased
Dr. Sandhya
Logistics Makkar
There are now 6 types of bins with different storage capacities
Bin Types Total bins Remarks

C1(55 cu inch) 462 On Pallets
C2(42) 6252
C3(15) 11774
C4(19) 1489 Used for suit lengths
C5(22) 1972 Used for Rolls
C6(10) 780
Dr. Sandhya
Logistics Makkar
Q2.
Pre defined storage policy based for each storage
type(mkts). A hybrid storage strategy for few markets and
no mix for other. Colour scheme is followed under each
storage type
Inward receipts from folding unit on Flat tables with racks

and separate tables for rolls instead of trolley.
Color(11) segregation tables nearby. Storage type of batch is
done on following
1. Grade/Colour/Length 2. Mkt segment 3. Season 4. Unit
of measurement 5. Suit Length 6. Special stock 7.
Roll/Fold Indicator 8. Storage unit type(mix or no mix)
Dr. Sandhya
Logistics Makkar
Barcode scanning
color displayed on system
 material kept on shelf of color
 option of transfer order is created based on strategy (if
batch storage type is no-mix, a TO needs to be created
which will give bin no. where it should be kept

Black zone bin is introduced: if bin is full of max capacity,
the batch is kept in black zone(bin no.is specified for black
zone for no-mix strategy)
Dr. Sandhya
Logistics Makkar
Ans 3
Clean orders are created and Raymonds outsourced this
function(BPO-Business Process Outsourcing)
Clean Orders: Clean orders are created after after examining
the stock availability in the warehouse and on the orders
received by sales team
 Heijunka Tool is installed for efficient picking

 Heijunka promotes visual management and load levelling
of picking operations
Dr. Sandhya
Logistics Makkar
Ans 4
Raymond has moved from manual packing to automated
packing. To pack 700 bales(consisting of SKUs) now only 3
persons are required instead of 25
Ans 6
Strategies that Raymond has adopted to measure its
warehouse operations

Untouched deliver orders(DO) (Day 1)
Partially Picked DO (Days 3)
Pending Transfer orders (Day 1)
Pieces pending in cutting area (2 days)
Underpicking rate
Picking productivity
Flow of pieces from folding to bin (Day 1)
Dr. Sandhya
Logistics Makkar
Ans 5
Raymond has adopted WH within WH

Dr. Sandhya
Logistics Makkar

4.material Handling and Layout

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MATERIAL

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

As a process, material handling incorporates a wide

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

A company’s material handling system and processes are

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

• Nature of the product—hazardous, perishable and crushable

• Unloading the incoming material from transport vehicle.

• Moving the unloaded material to assigned storage place in the

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

• Lifting the material from storage place during order picking.

• Moving material for inspection and packing.

• Loading the boxes/cartons on the transport vehicle.

• Standard equipment should be preferred to keep low capital

• Equipment designed for continuous flow should be preferred.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

• Gravity flow should be incorporated in the system design.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

The major criterion for selection of right systems are:

• Units moved per hour

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

It is the cheapest and common method

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Cartons should not be more than 20 kgs, manual loading and

The prime consideration is layout of warehouse for free movement

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Benefit: Transfer the fatigue from human to machine bringing speed

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Both mechanized and automated systems are used

Automated systems are customised according to the needs

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

e.G sorting devices powered with conveyor belts, robots, AGVs

Automated Systems require high investment

Benefits: Speed Accuracy, productivity

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

The system is then connected with computer programming

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Bins & Containers

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Planning the layout of your warehouse is centred on

1.Providing enough storage space for your inventory;

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

i.e the objective is optimal storage and movement with

•Receiving new stock area(unloading).

•Unpacking stock area.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

•Main storage area.

•Excess, obsolete or dead stock storing area.

Material Inward and Inspection

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

Order Picking Section

Material Dispatch Section

What other factors to consider for designing of warehouse

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd

• Make maximum use of available area.

• Use ‘unitized‘ load system.