According to the latest procurement intelligence report from Technavio, the global material handling services marketis expected to grow at a CAGR of almost 8% over the next five years due to the growth of the manufacturing sector.
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Technavio has published a new report on the global material handling services market from 2017-2021. (Graphic: Business Wire)
The research report titled 'Global Material Handling Services Market: Procurement Intelligence Report 2017-2021' provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
"The global economic growth directly stimulates trade movements across countries, backed by an increase in manufacturing activities and product consumption. Many buyers across the world invest in material handling systems and services that can increase the cost-effectiveness of operations in the long-term," says lead Technavio procurement specialist Angad Singh for category spend intelligence. "Buyers and material handling service providers are focusing on major concerns such as the need to meet regulatory requirements, integration of material handling process across various parts of the supply chain, and ensuring sustainability," added Angad.
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Cost Saving Opportunities in Material Handling Services
The adoption of cost optimization levers helps buyers of material handling services achieve category management and value benefits, including a reduction in procurement complexities.
Technavio procurement experts have segmented the cost saving opportunities in the material handling services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Temporary storage and sortation system are used to reduce manual intervention and the timely retrieval of materials based on production schedules.
Voice-directed picking relies on communication based on voice instructions through headphones and microphones rather than using conventional paper lists and wireless terminals. Intelligent software involves the utilization of WMS and WCS system that enhances the visibility and efficiency of material handling operations.
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Optimization of procurement practices saving aspects
LCC analysis refers to the economic evaluation of a product or service by analyzing the initial and operating costs throughout its lifetime to assess the TCO. Buyers should evaluate the LCC for implementing material handling solutions as the operating cost can be more than that of the initial costs, thus affecting the profitability of the system.
Buyers should procure material handling services that are relatively eco-friendly and help in enhancing sustainability practices. The process of material handling can be enhanced by automating the processes. Hence, buyers need to evaluate the technological capabilities of the supplier including the use of RF devices and other automated systems in their solutions.
Bundling of services saving aspects
Successful implementation of a material handling system is dependent on the buyers' ability to use the system, which necessitates training the workforce for handling the implemented systems. Hence, buyers should engage with suppliers that train the workforce for appropriate use of systems.
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About Technavio
Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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