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PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS/RS)
A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY

ENHANCING
ASSET MANAGEMENT
AND

PROFITABILITY
WITH

AUTOMATED MATERIAL
HANDLING SYSTEMS

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PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS/RS)
A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY

ADDING VALUE
IN A COMPETITIVE ENVIRONMENT
Globalcompetition, deregulation, technological changes. Takeovers, LBOs, divestitures.
Eroding brand loyalties. Consumer demand for better quality and service. It’s all part of the current
business climate.
Restructuring is in. So is value-based planning. Return-On- Investment (ROI) has become
the yardstick of success. Increasing productivity is still important, but improving profitability is a
primary goal.“Staying close to the customer” is heard as often in boardrooms as in sales seminars. Customer
influence on design, manufacturing, distribution and marketing has never been more pronounced.
New or enhanced products must reach consumers faster and at a lower cost. In the marketplace,
sales depend as much on product reliability as on style and performance.
But good products and service are nolonger enough to increase shareholder wealth.
Companies are looking to the management of assets and the reduction of costs to add value to their
business.
For companies who have managed their income statement - restructured business units, spun
off unproductive assets, cut production and front office people, or any other strategy - where can
value be added? Material logistics may be theanswer.
The cost of moving and managing materials is part of the logistics process and today many
believe it is the last area in manufacturing and distribution operations where significant cost efficiencies
can be realized.
How material logistics relates to asset management and what role Automated Storage/
Retrieval Systems have in adding value to a business is the subject of this ExecutiveSummary.

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PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS/RS)
A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY

IMPROVING MATERIAL HANDLING EFFICIENCY
REDUCES COSTS, INCREASES PROFITABILITY
Virtually any item being manufactured in a conventional facility may be “idle” as much as
95% of the time - in receiving, storage or in transit from one operation to the next. Idle time indistribution operations may be even greater. But managing these idle assets is often overlooked in
the effort to create value in products or services, or for stockholders.
The profit potential of a smooth, continuous flow of materials has been widely discussed and
documented. With continuous flow you need less material on hand so the reduction in inventory
contributes directly to profitability.But the cost of moving and storing what remains on hand is not always easy to quantify since
costs may be spread across several product lines or functions. As a result, material handling and
storage costs are often lumped with company overhead. Determining the amount of value created by
each business activity is essential to the realistic allocation of costs and is a prerequisite for aneffective cost management program.
The more profitable companies are recognizing that increased value comes from operating
efficiencies, not solely from financial manipulations. They recognize that improving material handling
efficiency is a way of significantly reducing costs and lowering invested capital, thus increasing
profitability while providing better service to customers.

Typicalmaterial disposition in conventional
(non-automated) manufacturing facilities.

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PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS/RS)
A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY

4

PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS/RS)
A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY

CONTROL IS THE ESSENTIAL INGREDIENT
IN MATERIAL HANDLING EFFICIENCY...
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