3.

1 MATERIAL HANDLING DEVICES (MHD): is mechanical equipment used for

the movement, storage, control and protection of materials, goods and products
throughout the process of manufacturing, distribution, consumption and disposal.
The different types of handling equipment can be classified into four major
categories: transport equipment, positioning equipment, unit load formation
equipment, and storage equipment.
IMPORTANCE OF MATERIAL HANDLING DEVICES:
The basic importance of material handling is to choose most appropriate materials
handling equipment which is safe and can full fill material handling requirements at
the minimum possible overall cost and to choose production machinery and assist
in plant layout so as to eliminate, as far as possible, the need of materials handling.
In general, the functions of good materials handling system include:
(a) Using the principles of centralization, unit load or cartelization, aim at moving
optimum number of pieces in one unit.
(b) Safe, standard, efficient, effective, appropriate, flexible and proper sized
materials handling equipment’s should be selected.
(c) To employ mechanical aids in place of manual labour in order to speed up the
materials movement.
(d) To minimize the movement involved in a production operation.
(e) Changes in sequence of production operations may be suggested in order to
minimize backtracking and duplicate handling.
(f) Handling equipment’s' arrangement should minimize distance moved by
products and at the same time handling equipment’s should not interfere with the
production line.
(g) To minimize the distances moved, by adopting shortest routes.
(h) To design containers, packages, drums etc., to economise handling and to
reduce damage to the materials in transit.
(i) To utilize gravity for assisting materials movement wherever possible.
(j) Materials handling equipment’s should periodically be resorted to check-ups,
repairs and maintenance.
OBJECTIVE OF MATERIAL HANDLING DEVICES:
The main objectives of material handling are as follows:
• It should be able determine appropriate distance to be covered.
• Facilitate the reduction in material damage as to improve quality.
 Reducing overall manufacturing time by designing efficient material
movement
• Improve material flow control
 • Creation and encouragement of safe and hazard-free work condition
• Improve productivity and efficiency
• Better utilization of time and equipment
What is Cranes:
Cranes are equipment
that Transfers a Havey
Material from one place
to another place. Like
restressed Bridges, Havey
materials, etc. Carnes is
Very Costly so some small
constructor takes the
machine on a rant. There
are various types of
cranes that are used in
construction projects. The
construction cranes include trucks, all-terrain, crawler, rough terrain, and tower cranes.
The lifting capacity of those cranes varies from 5t to 3200t, built with remarkable load-
lifting capacity, delivering superior lifting performance for construction any other
projects. Like Truck Crane, Rough Terrain Crane, Crawler Crane, All-terrain Crane,
Tower Crane.
Advantages of Cranes
We are give a some Important advantages of Carnes.
 Very helpful in the construction sites. When you transfer a hevey material one place to
another place then used of Carnes. Like Stones, Prestressed Materials, etc.
 It also gives mechanical advantages.
 They use for loading and unloading work easy.
 It is safe and automatic to use in various places.

Disadvantage of Cranes
We are providing a some Disadvantages of carnes.
 Carnes is a very large machine. He takes safety in machines.
 Carnes is costly to machine. Then they a cost of the project.
 Carnes needs skilled labor to use a Carnes.

Application of Cranes:
• transportation for the loading and unloading of freight,
• in construction for the movement of materials,
• in manufacturing for the assembling of heavy equipment.
lift
A hydraulic lift table uses a combination of electric motor, hydraulic pump and hydraulic
cylinders as the drive. The pump is driven by the electric motor, which supplies oil to the
hydraulic cylinders. The lifting and lowering movement of the scissor lift table in turn is
generated by the extension and retraction movement of the cylinders.
Advantages Disadvantages
Special oil required in the food
Inexpensive
sector
Less wear Low positioning accuracy
Discretionary placement of the drive
Heating of the hydraulic oil
unit
Simple and reliable overload Temperature of hydraulic oil too
protection low
One power unit for different forms of
Noise emission
movement
Compression and rebound of the
Power only required during lifting
lift table
Retrospective reduction of the lifting
Filtering of the hydraulic oil
times
Risk of leaks
Forklift: A forklift, also known as fork truck, is a motor-driven industrial truck used
for lifting and moving goods on a pallet within the premises of a warehouse, storage
facilities and distribution centre. Depending on the design, some Forklifts allow the
operators to sit while driving or operating the machine.
Advantages: Can reach higher than you want to go // On/Off control // Can be rigid if
designed correctly // Can be actuated via screw, cable, or pneumatics, though all
involve some cabling
Disadvantages: Stability issues at extreme heights // Cannot go under obstacles lower
// than retracted lift
Application: forklifts are used to move and transport bulky cargos: from delivery trucks
to storage regions in the
dockside to ships. Forklifts
are used particularly in
transporting steel and wood
shipments. Recycling
facilities – Besides
dockyards, forklifts are also
useful in recycling
operations

Tracks: Since track tractors

act and ride differently
than wheel (tire) tractors, a
thorough review of the
advantages,
 disadvantages, and operating considerations of tracks should be reviewed before
determining whether tracks or tires are the best choice for the applications.
Tracks advantages:
 Better flotation
 Smoother ride on rough fields (diagonally across rows)
 Higher level of tractive efficiency over a wider range of soil conditions
 More stability on hillsides (able to maintain traction)
 Better maneuverability (zero turn radius possible)
 Easier implement hookup
 Minimal ballast changes and no tire pressure to adjust
 No power hop
Tracks disadvantages:
 Reduced steering control under heavy draft load (following terraces, contours)
 Possible PTO and drawbar interference when making sharp turns
 Not compatible with loaders and dozers
 Rough ride and/or vibration on hard surfaces
 Soil berming and more crop damage on end rows

Belt Conveyors: belt conveyor has several advantages and

disadvantages when being considered as a mechanical means of bulk
materials conveying.
1. Belt
Conveyor
System
Advantages
 One of the cheapest
conveyors
 Simple and easy to use
 Can have changes in
elevation
 Can be loaded from
any place along the belt
Disadvantages
 The simplicity means
very limited features
 Belt can be difficult to
clean and generally
does not leave a very successful result
 Sticky material can get stuck on the belt and transfer to the return side, the rolls, idlers
and pulleys
APPLICATIONS OF BELT CONVEYOR
A conveyor system is commonly used in the mining, automotive,
agricultural, food and beverage, bottling, manufacturing, warehouse
and logistics, and packaging industries. All sorts of materials are
conveyed thanks to the different conveyor belts you can get to manage
different loads and materials.
 roller conveyors
Conveyors are an
automatic system
for transporting
goods. These sets
of rollers carry the
load and propel it
along a circuit.In
general, their
electric motors
move unit loads in
a safe, controlled
manner, although
they can also be
gravity driven.
Advantages
 Can use gravity for
moving the product
on a decline angle
 No power means less cost and more environmentally friendly
 Quite modular andcan be utilized in many ways
 Fairly low maintenance
Disadvantages
 Products may end up being damaged when moved by gravity
 Heavy and therefore not very portable
 No control of conveyor speed
Main applications of roller conveyors
1. Reception, distribution and dispatch of goods
2. Connection between different warehouse zones
3. Connection between different floors
Overhead conveyor:
Overhead conveyor systems help
maximize the amount of space a
conveyor system uses by utilizing
the open space above to transfer
items and materials. If your
facility is tight on space, choosing
a suspended conveyor system
can give you the extra room you
need for more product,
workstations, and even future
expansions.
 Advantages
 Can utilize the space overhead maximizing the full capacity of a facility
 Buffer stores of serial produced components can be stored and sequentially delivered to
a pick point when required
 Full production systems can be created in a friction drive overhead conveyor using multi
drive technology offering speed differentials
 Lower operating costs and known for being very safe
Disadvantages
 Generally more expensive than a floor based conveyor system
 If breaking down, it can be more challenging to repair if no foresight at the planning
stage and installation for maintenance
 If chain based, it tends to need continual lubrication meaning grease or oil might drop
from the system
APPLICATION: One of the most common types of conveyor, an overhead conveyor is
generally used in a production facility to move parts from one location to another.
They take advantage of the generally unused vertical space above the working area.

CHAPTER-05 (INVENTORY CONTROL)

5.1What Is Inventory?
The term inventory refers to the raw materials used in production as well as the
goods produced that are available for sale. A company's inventory represents
one of the most important assets it has because the turnover of
inventory represents one of the primary sources of revenue generation and
subsequent earnings for the company's shareholders. There are three types of
inventory, including raw materials, work-in-progress, and finished goods. It is
categorized as a current asset on a company's balance sheet.

Definition

Inventory refers to all the items, goods, merchandise, and materials held by a
business for selling in the market to earn a profit.
Example: If a newspaper vendor uses a vehicle to deliver newspapers to the
customers, only the newspaper will be considered inventory. The vehicle will be
treated as an asset.

Types of Inventory
There are four different top-level inventory types: raw materials, work-in-progress
(WIP), merchandise and supplies, and finished goods. These four main
categories help businesses classify and track items that are in stock or that they
might need in the future. However, the main categories can be broken down
even further to help companies manage their inventory more accurately and
efficiently.
 1. Raw Materials: Raw materials are the materials a company uses to create
and finish products. When the product is completed, the raw materials are
typically unrecognizable from their original form, such as oil used to create
shampoo.
2. Components: Components are like raw materials in that they are the materials a
company uses to create and finish products, except that they remain
recognizable when the product is completed, such as a screw.
3. Work In Progress (WIP): WIP inventory refers to items in production and
includes raw materials or components, labor, overhead and even packing
materials.
4. Finished Goods: Finished goods are items that are ready to sell.
5. Maintenance, Repair and Operations (MRO) Goods: MRO is inventory — often
in the form of supplies — that supports making a product or the maintenance
of a business.
6. Packing and Packaging Materials: There are three types of packing materials.
Primary packing protects the product and makes it usable. Secondary
packing is the packaging of the finished good and can include labels or SKU
information. Tertiary packing is bulk packaging for transport.
7. Safety Stock and Anticipation Stock: Safety stock is the extra inventory a
company buys and stores to cover unexpected events. Safety stock has
carrying costs, but it supports customer satisfaction. Similarly, anticipation
stock comprises of raw materials or finished items that a business purchases
based on sales and production trends. If a raw material’s price is rising or
peak sales time is approaching, a business may purchase safety stock.
8. Decoupling Inventory: Decoupling inventory is the term used for extra items or
WIP kept at each production line station to prevent work stoppages. Whereas
all companies may have safety stock, decoupling inventory is useful if parts of
the line work at different speeds and only applies to companies that
manufacture goods.
9. Cycle Inventory: Companies order cycle inventory in lots to get the right
amount of stock for the lowest storage cost.
10. Service Inventory: Service inventory is a management accounting concept
that refers to how much service a business can provide in a given period. A
hotel with 10 rooms, for example, has a service inventory of 70 one-night stays
in each week.
11. Transit Inventory: Also known as pipeline inventory, transit inventory is
stock that’s moving between the manufacturer, warehouses and distribution
centers. Transit inventory may take weeks to move between facilities.
12. Theoretical Inventory: Also called book inventory, theoretical inventory is
the least amount of stock a company needs to complete a process without
waiting. Theoretical inventory is used mostly in production and the food
industry. It’s measured using the actual versus theoretical formula.
 13. Excess Inventory: Also known as obsolete inventory, excess inventory is
unsold or unused goods or raw materials that a company doesn’t expect to use
or sell but must still pay to store

Importance of Inventory Control

Inventory control is an indispensable tool for every business for multiple reasons.
When a business is dealing in a large volume of stocks, it has to ensure that the
goods are stored inefficiently, and there is a consistent availability at all times.
Most businesses employ enterprise resource planning to ensure that they do not
face the wrath of clients and suffer losses.
The key reasons for its importance are as follows:
 It helps to lower costs.
 It enables your business to fulfil timely deliveries.
 Protects theft of stocks
 Protects your stocks from getting spoiled
 It helps you to return unsold goods in their original state.
 It gives you an insight into the purchasing patterns of customers and their
preferences for goods.
 It creates more opportunities for your business.
 Objectives of inventory control
 It enables a business to control its overall costs.
 Protects businesses from duplication of stock orders.
5.2 Reason for carrying inventory.
Meeting Customer Demand
To ensure that the business has sufficient stock to meet customer demand in a
timely manner
To improve customer satisfaction and loyalty
Production and Operational Efficiency
To maintain continuous production and operational efficiency
To ensure that the necessary raw materials and supplies are available when
needed Seasonal Demand
To prepare for seasonal demand fluctuations or take advantage of seasonal
opportunities
Production and Operational Efficiency
To purchase inventory in bulk or during period so flow demand
To save money and reduce costs in the long run
Price Fluctuations
To take advantage of price fluctuations or to hedge against potential price
increases in the future

5.3. Activities of Inventory Control?

Also called stock control, inventory control consists of systems and procedures for
managing inventory items in a company’s warehouse. It monitors the movement and
storage of goods in a warehouse to help businesses maintain a sufficient supply in good
 condition. Establishing an inventory control system enables them to satisfy customer
demands and maximize profits.
Inventory control is a key element of an inventory management system. Warehouse
managers and production planners should adhere to the following activities and
procedures in controlling their inventory:
 Receiving, storing, and transferring goods
 Placing items in strategic locations
 Tracking inventory items and their locations in the warehouse
 Documenting product details and histories
 Monitoring the condition of items in stock
 Fulfilling purchase orders with stock on hand
 Integrating barcode scanners
 Forming reorder reports

5.4.1 inventory control methods in use

Some of the popular inventory control methods are as follows-

Economic order quantity (EOQ)-

Economic order quantity, also called EOQ, refers to a formula. It is the ideal
inventory quantity that a company must purchase considering various variables
such as total production costs, demand rate, etc.
It helps to free up any tied cash in inventory for most entities and reduces the
direct costs. Also, inventory management software can also be used to manage
inventory in a better way.

The Derivation of EOQ Formula:

Variables:
T = Total annual inventory cost
P = Purchase unit price, unit production cost
Q = Order quantity
Q* = Optimal order quantity
D = Annual demand quantity
K = Fixed cost per order, setup cost
h = Annual holding cost per unit, also known to be carrying or storage cost
The single-item EOQ formula helps find the minimum point of the following cost
function:
Total Cost = Purchase Cost or Production Cost + Ordering Cost + Holding Cost
Where,
 Purchase cost: This is the variable cost of goods: purchase unit price ×
annual demand quantity. This is P × D
 Ordering cost: This is the cost of placing orders: each order has a fixed cost
K, and we need to order D/Q times per year. This is K × D/Q
 Holding cost: the average quantity in stock (between fully replenished and
empty) is Q/2, so this cost is h × Q/2
To determine the minimum point of the total cost curve, calculate the derivative
of the total cost with respect to Q (assume all other variables are constant) and

set it equal to zero (

Solving for Q gives Q* (the optimal order quantity):

Therefore,

Can also be written as,

ABC analysis-

The ABC analysis considers that all the goods cannot have equal value in the
market. They are found in three different categories:
Segment A: Products included in category A are the most essential goods with
the highest value. Segment A goods consist of approximately 20% of the total
products with 80% of revenue generation for your business. It is considered as
a small category with minimal goods, but maximum revenue.

Segment B: Products included in category B have a slightly higher value than

segment B. It approximately regulates 30% of goods with 15% revenue
generation. Not to mention, the goods included in this category are more in
number but less in utility.

Segment C: Products included in category C are more in numbers but least

valuable when it comes to generating revenue. As compared to category A & B,
segment C has the maximum share of 50% of the stock, generating just 5%
revenue.

To sum it up, A signifies the most important goods, B indicates moderately

necessary goods, and C indicates the least essential inventory.

HML analysis: is an inventory method that categorizes inventory based on a

product's unit price. It helps in simplifying the inventory management process —
especially for large-sized businesses with thousands of sales each day. HML
analysis is a tool used in inventory management to help classify inventory items
and inventory control.

The HML classification gives an idea by its name. H, M, and L stands for high,
medium, and low, respectively. Under this system, items are classified according
to how fast they move or turnover. The HML analysis can help with inventory
control by providing a guide for how often to check stock levels, how much safety
stock to keep on hand, and when to order new supplies. This method classifies
inventory into the following categories:

1. High Cost (H): Includes high unit value/cost products. Normally they are
10-15% of the total items.
2. Medium Cost (M): Includes average or medium unit value items. 20-25%
of products fall into this category.
3. Low Cost (L): Includes items with low unit value. 60-70% of the products
are usually low-cost.

FSN analysis :
Also known as the FSN analysis, FSN meaning Fast-moving, the slow-moving
and non-moving in inventory management. FSN is one of the inventory
management techniques and it is about segregating products based on their
consumption rate, quantity, and the rate at which the inventory is used.
Fast-moving inventory, as the name suggests, comprises the stock that moves
quickly and needs to be replenished very often. Generally, the stock that lies in
this category has an inventory turnover ratio of more than 3 and constitutes
around 10-15% of the total inventory.
Slow-moving inventory is the inventory that crawls slowly through the supply
chain and has an inventory turnover ratio between 1-3. It is generally 30-35% of
the total stock.
The inventory that rarely moves with the inventory turnover ratio below 1 and
makes 60-65% of the total stock is called the Non-moving inventory.

VED analysis: VED analysis is an inventory management system that

segregates the stock based on its functional importance for a business. It
bifurcates the inventory into three parts, making it easier for businesses to
allocate their resources and budget accordingly. The three VED heads are:

1. Vital Items: Includes those items that are crucial for any business. The
company should always keep an extra stock as its shortage can hamper
the whole production process.
2. Essential Items: It includes inventory next to vital for your business. The
difference is that they cause a temporary loss in case of shortage.
3. Desirable Items: This category entails optional goods not necessary to run
business operations.