The Indian market for material handling equipment (MHE) has witnessed significant growth, and has accounted for about 13% market share of the country’s construction equipment industry.
Increased infrastructure investment, emphasis on the manufacturing sector’s growth, introduction of automation in MHE and adherence to safe practices in the country are fueling the sector’s growth. The performance of corporates following successful stabilisation post GST implementation, coupled with the development of logistics’ organisations in the country is all set to hasten the growth of the MHE industry further changing the dynamics of the business sooner than later.
Material Handling Equipment (MHE) is one of the most important aspects of manufacturing sector in India. The growing manufacturing industries such as Chemicals, Automotive, Pharmaceuticals and Food & Beverages spur the demand for warehouses to store and manage their products. This increasing demand for automated storage, retrieval systems along with industrial Trucks in the manufacturing industry shall be a key driver for industry growth in near future due to the rising investments in installing the equipment at distribution centres as well as warehouses. Some of the factors which are responsible for this growth are the increasing investments in infrastructure development, growing penetration of advanced technologies, rising demand for increased automation, and safe working practices in the manufacturing space. “The current market of powered equipment is approximately 12000 units and it is expected to grow at CAGR of 15-18% for the next 2-3 years. Government initiatives such as ‘Make in India’ are supporting the growth of the manufacturing sector in India. As MHE is primarily used for the movement and storage of goods within a facility or at a site, the need for such equipment is directly related to freight traffic volume. Considering that the Government is focusing on incentivizing the manufacturing sector, the logistics market will reap the benefits of this in the coming years,” says Cavas Dumasia, Vice President Marketing & Sales, Godrej Material Handling. Ravindra Palande, Vice President-Procurements, Grauer & Weil (India) Ltd adds, “the material handling system plays a vital role in managing internal and external manufacturing operations. The material handling products aid air transportation and storage of material in highly systematic manner which reduces the risk of handling and transporting raw material as well as lower the costs involved. This augment the operational efficacy, streamline the supply chain and handle warehouse operations through optimum utilisation. It lowers the handling cost, reduce inventory and shorten delivery time. So there are very bright prospects for MHE industry within the manufacturing sector in India.”
The major trend these days is to make machines more environment-friendly. There is also a trend towards the usage of more electric driven/battery operated technology for various equipment that are more environment friendly. In India, industry has increasingly started focusing on automation, cost reduction, real time tracking of shipments, reducing environmental impact and collection and utilisation of data to improve efficiencies. “We are procuring over 2000 numbers of raw materials to deliver at five locations. We have developed various reports on inventory, pricing, order status through ERP system to get real time alerts. This helps us to have better control on pricing, inventory and effect timely deliveries to our customers,” says Palande. Trends are focused on operator comfort through ergonomics, ease of operations and low cost of maintenance. Users are outsourcing equipment, operations and the trend seen moving ahead is that of hiring and rental services so that they can focus on their core business. “Another trend that we find among users is that they are revisiting their supply chain and exploring newer ways to store and handle material more efficiently. Nowadays a lot of emphasis is being given in the material movement and handling space, and hence designing of warehouses and factories is being done accordingly. People are no longer just looking at the price of the equipment, but the overall productivity of their people using the equipment, space and material movement. It is also seen that more mechanization and automation in terms of warehouse management is taking place for handling in the warehouses as well as entire logistics chain. Lack of availability of labour for menial jobs and rising cost of labour and space are also driving the automation process,” opines Dumasia. Godrej is investing in digitization to enhance customer experience by providing smart services in order to remain connected with the customers. This shall enable real-time experience in fleet management for our customers, especially multi-location ones. It shall empower our customers with data, information and history of their Godrej machines while on the move.
Prior to the launch of GST, the location of customer sites and storage of goods were dependent on states, tax sops and a supplier base. “With GST unifying the market, we anticipate a rise in logistics and warehousing activities as companies would like to consolidated warehouses, which are larger/higher and automated,” says Manojit Acharya, Managing Director, Jungheinrich Lift Truck India Pvt. Ltd. “GST was something that we had been looking forward for the past few years. GST has aided easy movement of goods and removed a lot of bottlenecks, this has led to growth in number of material handling equipment required, which will improve the prospects of handling equipment industry as well. Therefore, we expect a faster change in terms of technology upgradation and automation leading to increase in operational efficiency. Further, to this development industry status to logistics and Government focusing on creating cold storage infrastructure has also helped. We expect better infrastructure outside the metro cities, easy and cheaper access to funding, availability of skilled and trained manpower from the government to further fuel this growth,” adds Manojit Acharya, Managing Director, Jungheinrich Lift Truck India Pvt. Ltd.
Adherence to safety requirements and telematics are some of the key drivers for new MHE solutions. Safety is of paramount importance in material handling because this is moving equipment in a plant or a warehouse. One of the biggest benefits of telematics is increased safety which leads to biggest cost saving as it prevents accidents, injuries and damages. The other benefits of telematics are gauging maintenance, eliminating idling, keeping track of vehicles and improve routing. “Other drivers which are leading to growth in MHE product revenues in India are automation, shortage of skilled labour and enhanced focus on safety. Adherence to safety requirements help in less breakdown time that ensures consistent supplies which leads to a business growth.
Growing automation capabilities in the manufacturing space will provide an impetus to the material handling equipment requirements. Automation supports in reducing costs and delivering high-quality products. It eliminates the need for manpower to check-in, sort goods, or to move bins and pallets. These automated systems scale up the operational needs and drive the business results by reducing errors, increasing pick rates, surging throughput and decreasing labour costs. For instance, automated guided vehicles (AGVs) are an automation solution for moving parts to and from the manufacturing facilities. Machines are designed considering ergonomics and anthropology requirements, features like adjustable seats, adjustable steering, more leg space, more visibility all enhance the ease of operation for the operator. Jungheinrich has introduced various products over past few years customized for Indian MHE market. In 2017, they launched a range of AMEISE products these are specifically designed for India and offer warehousing equipment like pallet truck, stacker and forklift in AMEISE range. These are used in low duty applications and provide cost effective solutions. Acharya says, “for high end applications, in June 2018, we have launched equipment fitted with lithium-ion batteries. These batteries are extremely compact, 20% more efficient, provide fast charging, provide 4-6 times more cycles, have 100 per cent discharge and are environment-friendly as compared to lead-acid battery. In future, lithium-ion battery will be standard feature for our trucks. Currently, the lithium-ion battery is expensive compared to lead-acid variants. However when we consider the total cost of ownership, lithium-ion battery is more cost efficient than lead-acid batteries. It is going to be the product of the future. Our lithium ion battery fitted MHE are Jungheinrich biggest contribution to cleaner and greener technology.”
The implementation of GST in terms of unified tax has assisted in the smoother flow of goods within the country. There is more transparency and differential tax structures are eliminated. This has helped the manufacturing and logistics sector which in turn has increased the demand of material handling equipment. “All major global players are present in India and utilizing their China factories to supply machines in India. We expect the Indian government to support local manufacturers by providing incentives putting anti-dumping duty on finished material handling equipment to support ‘Make in India ‘initiative,” avers Dumasia. For large volume procurement, extensive reliance on strong ERP systems becomes a necessity for prompt alerts for corrective and controlling activities which make inventory available on time and prevents fund lock-up in excessive inventories. Close monitoring of RM prices with the help of strong ERP system is absolutely essential to protect bottom line.
This story appeared in the Sep 2018 issue of Manufacturing Today here: MT_September 2018_Material Handling