Evaluation of Material Handling System

Evaluating the material handling (MH) system is crucial for identifying inefficiencies, measuring performance, justifying improvements, and ensuring the system continues to meet operational objectives effectively. It involves assessing costs, time, utilization, and other qualitative factors.

Key Evaluation Methods & Metrics:

1. Cost Analysis:
   • Focus: Quantifying the total cost associated with all MH activities.
   • Components: Labor (operators, maintenance), equipment (depreciation, energy, repairs), material damage, downtime caused by MH issues.
   • Metrics:
     • Cost per Unit Handled: Total MH Cost / Units Moved.
     • MH Cost as % of Total Production/Operating Cost.
   • Purpose: Track cost trends, compare different methods, identify high-cost areas.
2. Time Analysis:
   • Focus: Measuring the time consumed by handling activities versus productive work.
   • Metrics:
     • Handling Time Ratio: (Time Spent Handling) / (Total Cycle Time). Lower is better.
     • Delay Time: Measure production time lost waiting for materials.
   • Purpose: Identify time wastage, assess impact on lead times and throughput.
3. Productivity & Utilization Ratios:
   • Materials Handling Labour (MHL) Ratio:
     • MHL = (Personnel in MH) / (Total Operating Workforce)
     • Indicates: Labor intensity of MH activities.
   • Direct Labour Handling Loss (DLHL) Ratio:
     • DLHL = (Handling Time Lost by Production Workers) / (Total Production Worker Time)
     • Indicates: Impact of MH inefficiency on direct labor productivity (waiting, fetching). Crucial metric.
   • Equipment Utilisation Ratio:
     • Utilisation = (Actual MH Equipment Operating Hours) / (Total Available Hours)
     • Indicates: How effectively MH equipment assets are being used. Low suggests overcapacity; high might indicate a bottleneck.
   • Movement/Operation Ratio:
     • Ratio = (Total Moves) / (Total Productive Operations)
     • Indicates: Potential for excessive handling, possibly due to poor layout or lack of unit loads.
4. Qualitative Assessment:
   • Focus: Evaluating aspects not easily captured by numbers.
   • Factors:
     • Safety: Accident rates, near misses related to MH.
     • Damage: Frequency and severity of product/material damage.
     • Flexibility: System's ability to adapt to changes.
     • Space Utilisation: Visual assessment of storage density and aisle congestion.
     • Ergonomics: Physical strain on workers.

Overall Efficiency Factors: The system's efficiency ultimately depends on:

• The appropriateness and efficiency of the handling methods employed.
• The efficiency of the plant layout (minimizing distances).
• The utilization level of MH equipment and labor.
• The speed at which handling tasks are performed.

Indian Example: An Amul dairy plant evaluates its MH system by tracking the cost per litre of milk handled, the utilization rate of its automated crate stackers and conveyors, the time lost in the packaging line due to delays in receiving packing materials, and the rate of product damage (e.g., leaking pouches) during internal transport and storage. Safety records related to forklift operations would also be a key evaluation point.

Regular evaluation using a combination of these methods provides insights needed for continuous improvement of the material handling system.