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PROVIDED AUTOMATED STORAGE/RETRIEVAL SYSTEMS (AS,’RS) A PRODUCT SECTION OF THE MATERIAL HANDLING INDUSTRY ENHANCING ASSET MANAGEMENT AND PROFITABILITY WITH AUTOMATED MATERIAL HANDLING SYSTEMS PROVIDED BY THE A (ASAS) ar 8 to view nut*ge RIEVAL SYSTEMS A PRODUCT secri0N OF THE MATERIAL HANDLING INDUSTRY ADDING VALUE IN A COMPETITIVE ENVIRONMENT Global competition, deregulation, technological changes. Takeovers, LBOs, divestltures. Eroding brand loyalties. Consumer demand for better quality and service. Itrls 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. 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 Executive Summary. PROVIDED BY THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS AS/RS) IMPROVING MATERIAL HANDLING EFFICIENCY REDUCES COSTS, INCREASES PROFITABILITY Virtually any item being manufactured in a conventional facility may be Didleo as much as 95% of the time – in receiving, storage or in transit from one operation to the next. Idle time in distribution 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 casts may be spread across several product lines or functions. As a result, material handling and storage casts are often lumped with company overhead.

Determinine the amount o efficiencies, not solely fram financial manipulations. They recognize that improving material handling efficiency is a way of significantly reducing casts and lowering invested cap•tal, thus increasing rofitability while providing better service to customers. Typical material disposition in conventional (non-automated) manufacturing facilities. 4 CONTROL IS THE ESSENTIAL INGREDIENT IN MATERIAL HANDLING EFFICIENCY Automated material handling is a key element in the integrated logistics system.

Without automated equipment and systems, materials could not be moved, placed, stored or manipulated with the speed necessary to meet production or shpping requirements. But speed is not enough. If the logistics system is to add to profitability, materials must be controlled – from recelving o shipping. At any given moment, you need to know precisely What materials are on hand, where they are, and be able to access them quickly and accurately. Real-time control is being achieved through automated material handling technologv: equipment have made material handling infinitely faster, safer, and more flexible.

Most important, with automation, material can be accurately tracked and physically controlled. When you know What material you have, where it is, and can control its movement, you can likely get by with less material – and hold onto What you must have for a shorter time. With material control, you get both initial and on-going savings. Real-time control of materials through automated material handling systems impacts virtually all business activities and is essential to loglstics profltabllity.

PROVIDO THE AUTOMATED STORAGE/RETRIEVAL SYSTEMS 6 AS/RS IS A VITAL LINK IN AUTOMATED MATERIAL HANDLING Automated Storage/Retrieval Systems (AS/RS) are only one element of an automated material handling stratey, yet these systems that automatically store and retrieve materials are a vital link in material management and profitability in the factory or istribution center. In receiving, inspection and ickin in manufacturing, assembly and shippine, AS/RS in automated materials handling strategies.

Raw materials or vendor parts are automatically quarantined in an AS,’RS until released by quality contro’. Small parts in bins are brought to operators who make fast, accurate picks aided by instructions on a W screen. Assemblies are staged in an AS/RS on the factory floor awaiting the next step in production. 7 AS/RS functions as a line transport/ delivery system, feeding parts directly to test stations, then returning them to torage. immediate and long-term benefits are quantified, a realistic ROI can be determined for the AS/RS.

WhatÜs more, this comprehensive justification process Will reveal What automated material handling systems can actually contribute to overall cost reduction, increased productivity, and company profitability. Determining contribution of AS/RS to profitability includes consideration of both immediate and long-term benefits. 9 IO DETERMINE GOALS AND FORM STRATEGIC ALLIANCES Logistic functions that are managed to support the companyns strategy for competitive dvantage invariably make a measurable contribution to profitability.

Correspondingly, the most successful automated material handling systems are those which are desgned and arranged to support operating strategies. With strategic goals established, companies who have realized the most value from integrated logistics programs are those who sou ht out and formed alliances with experienced automat strategic partnerships with automated systems companies 12 ASSOCIATION MEMBER COMPANIES AS/RS is an association of AmericaC]s leading manufacturers of Automated Storage /Retrieval Systems.

The association is a product section of MHI, The Material Handling Industry, a national trade association of manufacturers of material handling equipment or systems which are manufactured in IJ. S. facilities. Information relating to the association and its membership is available by contacting MHI. EXECUTIVE SUMMARY VIDEO PRESENTATION A short video presentation is available which shows how a number of AmericaC]s leading companies have applied AS/RS technology to the management of materials. This Executive Summary video may be requested at no charge through MHI LITERATIJRE AND DOCUMENTING

Literature and documents are available from MHI covering virtually every aspect of automated materials handling, and sp . A sampling of areas SECTION OF THE MATERIAL HANDLING INDUSTRY CORRENT MEMBER COMPANIES OF AUTOMATED STORAGE/RETRIEVAL SYSTEMS PRODUCT SECTION ACCO Systems, Inc. Contact: Richard Slade Phone: 810-758-7500 Email: rslade@acco-dur. com Rapistan Systems Roy Freas 616-451-6200 E-%il: freasrw@rapistan. com Diamond Phoenix Corporation Larry Strayhorn 207-784-1381 E-Mail: Istrayhorn@diamondphoenix. com Remstar International, Inc. paul Roy 207-854-1861 royjr@remstar. com PAGF8rl(F8