Material handling relates to the loading, unloading and movement of all types of materials. Today, we have numerous ways by which material handling is done and it is generally classified according to the type of equipment used. Material handling may involve as much as 50 percent of the total production cost of a business's goods. Hence, the objectives of material handling become crucial to the organization.

Cost Reduction

One of the main objectives of material handling is the reduction of production cost. Material handling can constitute as much as 50 percent of total product cost and effective handling of materials can help minimize this cost. When handling costs are reduced the overall unit cost is reduced as a direct result. Sophisticated management theories, including just-in-time production and supply chain management are primarily concerned with materials handling.

Increasing Warehouse Capacity

When materials are not stored correctly in a warehouse, much of the facility is being wasted. This wastage adds to the cost of the product. Focusing on efficient storage in terms of cubic as well as floor space becomes important. Minimizing aisle space is also necessary with respect to increasing the amount of storage space. In both cases effective use of material handling will help to reduce warehousing cost of materials.

Improving Layout to Reduce Waste

A complete analysis of the flow of materials between operations, volumes, flow paths and timing is a must for efficient material handling. When space requirements are optimized and travel times reduced through the use of efficient handling systems and equipment, material handling becomes more cost effective. Further, this will lead to enhanced productivity.

Optimal Equipment Utilization

Expensive equipment often fails to operate at full potential simply because the material handling system does not permit it to. For example, the rate at which materials are supplied or removed could cause a drop in equipment performance by simply leaving it standing idle. With a proper material handling system in place or more efficient control of an existing system, equipment utilization can soon be maximized.

Increasing Safety

Safety in any organization is a primary concern and an efficient material handling system can make a direct contribution to the safety of workers, materials and associated equipment. With an efficient system in place, accident costs, lost time and damage to materials, among other things, can be reduced.