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What Are the Top Ten Material Handling Costs?

Apr 24, 2013 | Blog


Many of us don’t realize the extent of all the hidden material handling costs. These costs are constantly being accumulated in many different areas. To effectively control these costs you must know where to look for them. Here is a list (in no particular order) of ten areas to watch for cost reduction possibilities.

#1: Production Bottlenecks

Here, a whole line of machines are shut down due to poor systems therefore in the long run costing you more money and time.

#2: Idle Machine Time

The cost of machine downtime is calculated on the basis of lost productivity. When a machine is slowed down or stopped because of inadequate material flow, the cost must be charged to material handling.

#3: Poor Space Utilization

Space is money, we all know that. There are many system techniques and designs that can be applied to put space to better use. Such as utilizing unused overhead space.

#4: Re-handling of Material

Every time an item is handled it costs money. Techniques should be devised to reduce the number of times an item is handled in reducing your material handling costs.

#5: Damaged Material

Breakage is usually a high-cost factor at best. Improper techniques and equipment can increase this cost manyfold.

#6: Large Inventories

Inventories tie up capital and require large storage facilities, which cost more. Usually, the more efficient a system, the smaller inventory/storage space is required.

#7: Excessive Maintenance

Maintenance costs are two-fold, the time and material spent on the corrective action plus the loss of the equipment’s production time. Improper application or use of equipment is the major factor in increasing your system’s costs.

#8: Inefficient Use of Labour

Productive workers are paid to produce right? So every minute they spend handling material is a minute lost to the productive effort and budget.

#9: Delay

When transportation facilities are kept idle beyond specified limitations, extra charges are incurred. Proper material handling can go a long way toward reducing material handling costs.

#10: Inefficient Use of Equipment

Material handling systems cost money. This is a given, however, equipment should always be selected with an eye for function and efficiency.

It takes real creative thinking and analysis to spot the areas where cost reduction can be made. You must constantly observe minute details. PACLINE offers cost-effective solutions for your material handling concerns.


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