Tackling the Biggest Challenges in Manual Material Handling: Reducing Cost

posted on: Thursday April 18, 2013

Material Handling and Logistics’ 2013 Annual Salary Survey results are in, and there is a lot to look at. According to the MH&L website, respondents were asked, “What is the biggest Express Singled  2challenge facing the material handling and logistics industry today?” While several consistent themes surfaced, we want to focus on one in particular in this article: cost.

There are several factors affecting how much a business spends or saves. We at Load Movers Inc. went looking for information to tie some of these factors in with other themes from the survey. We found what we were looking for in “25 Ways Ergonomics Can Save You Money.” In this free download, Dan MacLeod thoroughly addresses how ergonomics affects direct and indirect costs of business. Many of these points relate to complaints made in MH&L’s survey. Here is how they all tie together.

The first on MacLeod’s list is “Dramatic reductions in workers’ compensation costs.” This point cannot be stressed enough – the safer a work environment, the less the insurance premiums. Injuries related to ergonomics directly affect a company’s safety rating. Insurance hikes due to safety issues are felt by everyone. One of MH&L’s respondents wrote, “Due to insurance increases, my take-home pay has been reduced nearly $400/mo. over the last six yrs.” This is a perfect example of an opportunity to cut costs and spare employees’ salaries. MacLeod states that “good ergonomics programs have cut workers comp costs an average of 60% and up to 90% in some cases.” In the inboundlogistics.com article, “Warehousing: the Safety Zone,” Chip Newhart, quality and safety manager at Baltimore Forest Products Terminals tells his story. “Several years ago, we had a poor accident record. Then we got serious about improving safety. We told our warehouse workers that if we could lower our insurance premiums, we would share one-third of the savings with them. We’ve done just that and have been able to pay bonuses to our employees for the last two years. And we’ve saved a few hundred thousand dollars in premiums.”

The second point on the list and another hot topic on the Salary Survey is improved productivity. Improved productivity relates not only to cost, but efforts made by businesses initiating strategies like Lean and Just in Time manufacturing. Transitions to these initiatives are not always smooth. “Dealing with just-in-time operation” shows up on the list of biggest challenges in the MMH and Logistics industry. For some businesses, following a strict model to streamline operations isn’t ideal. There are several ways to implement parts of these models to reduce waste and increase productivity. Know that boosts in productivity are not solely credited to streamlining. Many of these solutions include ergonomic changes that inherently boost productivity regardless of the operation.  MacLeod states, “It is common for ergonomic improvements to increase productivity 10 – 15%.” In many cases, depending on the equipment and task, the increase is even more.

Several headings in MacLeod’s document address efficiency. There are a number of ways that ergonomics results in greater efficiency. They all translate not only to less time wasted, but also fewer injuries and fatigue. Both of these are major reasons employees make mistakes, slow productivity, leave their jobs, and file for workers’ compensation.

Two other themes in MH&L’s survey were hiring and short-staffing. While not all of the complaints relate to cost, several relate to turnover, employee absenteeism, and medical leave. These scenarios not only cost money in training and overtime, but also slow production and increase mistakes. MacLeod cites turnover, absenteeism, morale, and the aging workforce as categories positively affected by a good ergonomics program. The link to MacLeod’s “25 Ways Ergonomics Can Save You Money” is listed at the bottom of the article.

Research consistently shows a correlation between ergonomics and reduced costs. In another study conducted by MacLeod, “Costs and Benefits of Ergonomic Interventions for Small Business,” he shows some dramatic changes over a ten-year period for small businesses who implemented ergonomic programs. Productivity increased by 54%, workers’ compensation costs dropped 93%, absenteeism was down 67%, and turnover was reduced by 94%. These numbers reflect what OSHA and NIOSH know about work-related injury and ergonomics.

If your employees feel the same way as those who took the survey, consider how ergonomic changes could benefit your business. The survey results are listed at the bottom of this article.

Load Movers Inc. offer high-quality powered tugs used to push and pull heavy loads. The tugs have been successful at minimizing injuries and boosting productivity. They’re frequently used in Lean manufacturing, Flexible manufacturing, and Forklift-Free operations. For more information, visit http://www.loadmoverinc.com/, email Info@loadmoverinc.com, or call 952-767-1720.


MH&L 2013 Salary Survey: http://mhlnews.com/labor-management/what-s-your-mind-mhl-s-2013-salary-survey-comments?page=1

MacLeod’s Free download: http://www.danmacleod.com/Articles/PDFs/25%20Ways%20Ergonomics%20Can%20Save%20You%20Money.pdf