The material handling equipment and logistics and warehousing sectors are booming and in the midst of a growing demand for automation in operations.
Material Handling, Logistics & Warehousing
Material handling is perhaps one of the oldest activities mankind and historical evidence suggests even during the early days man was quite good at innovating ways to move the building materials for the Pyramids and much else. And the innovation continues, the latest addition being the Hyperloop, which may or may not be an effective mode for human transportation but will surely be used for small freight.
Material handling in the industrial context is basically a short-distance movement smaller enclosures like a plant or a manufacturing sit spread across a few buildings. The material handling equipment which used to be purely mechanical earlier has in recent years seen various levels of automation and now reached complete automation in many cases. From the manual pallet truck to automated guided vehicles or AGVs, the industry now has equipment across the entire spectrum, with varying degrees of automation as per requirement.
But the Indian material handling industry has a long way to go in terms of automation as it still lacks large organised players in sufficient numbers and the industry is highly fragmented with few midsize companies and a large number of smaller players. However, there are companies catering to the automobile and packaging sectors that have witnessed higher levels of automation where the quest for higher productivity in face of global competition is driving the trend for increased automation.
A recent industry report by Global Market Insights Inc., says Material Handling Equipment Market size is poised to cross USD 190 billion by 2024. This report is quite comprehensive and has a lengthy title that runs like a small assembly line: “Material Handling Equipment Market Size By Product (Storage & Handling Equipment, Industrial Trucks, Bulk Material Handling Equipment, Robotics, Automated Storage & Retrieval System (AS/RS), By Application (3PL, E-Commerce, Durable Manufacturing, Food & Beverage, General Merchandise, Food Retail), Industry Analysis Report, Regional Outlook (US, Canada, Germany, UK, France, Italy, China, India, Japan, Australia, Mexico, Brazil), Growth Potential, Price Trends, Competitive Market Share & Forecast, 2016-2024”.
The growth in material handling equipment market is attributed to the capability to deliver a rapid and efficient means for the transit of goods from the warehouses to their respective locations. In addition, these systems provide several benefits to different industry verticals such as food retail, general merchandise, and durable manufacturing by enhancing the productivity with the use of automated systems and eliminating the need for humans for tedious tasks to minimize manual errors.
A strong investment landscape to install this machinery in warehouses and distribution centres will offer significant growth opportunities to the material handling equipment market. Companies are actively integrating various advanced solutions in the warehouses and distribution centres due to the swift changes in the consumer preferences. Several manufacturers have introduced tracking sensors and telematics solutions into the equipment, which aids in providing data management solutions that support the companies managing their warehouse fleet efficiently.
Increasing demand for robotics is expected to drive the material handling equipment market demand. This is due to the ability of robots to improve the effectiveness of the manufacturing plant and surge customer satisfaction by delivering quality products in a timely manner. It also aids in transporting objects from one location to another easily by fitting the robot with an appropriate end of arm tool such as a gripper. In addition, they also aid in tasks such as collision detection and conveyor tracking.
The industrial trucks market will witness significant growth over the forecast timeline. This growth is attributed to the need for recurrent flow of goods where the usage of a conveyor will not be useful. Furthermore, the loads carried on industrial trucks such as cranes have the alternative of varying the load based on the weight and shape which is not possible in conveyor systems.
E-commerce applications will drive the material handling equipment market size due to escalating need for faster deliveries to better cater to the consumers’ demand. Several vendors in the e-commerce industry are installing warehouse management system (WMS) to monitor the inventory levels and classify the stock locations.
Logistics & Warehousing
According to a press release by India Warehousing Show, the logistics industry is one of the largest industries in India as the logistics framework development accounts for more than 13 per cent of the GDP as compared to less than 8 per cent spent by the other developing countries. Indian logistics market has witnessed buoyant growth and is expected to grow at a CAGR of 12 per cent by 2020 driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors. The current logistics industry is worth over US$ 300 billion. This growth is also based on the implementation of GST which will enable logistics companies to setup larger warehouses as per the region’s requirement and then easily transport from these warehouses to the different manufacturing plants, retail outlets, wholesale outlets, etc.
Most of the logistics companies are integrating IT and technology by investing in automation in their day-to-day activities to bring efficiencies in their operations and meet the increasing customer demands. The industry as a whole has moved from being just service provider to the position where they provide end-to-end supply chain solutions to their customers. The logistics market in India is largely unorganised as several local or domestic transporters with a very small fleet size accounted for more than 65 per cent of the total fleet size for road transport in India. The scenario is undergoing change because of quick delivery and tight service level agreements witnessed over last 3 years because of e-commerce boom.
Warehousing plays a very vital role in promoting agriculture marketing and ensuring food security in the country as more capacity is required for storing all major crops highlighting the huge demand-supply mismatch. All the warehousing space owned by government agencies lack in optimal size, adequate design, ventilation facility, inventory management and storage system as they have been built following the traditional norms.
This is where demand for modern warehousing infrastructure has witnessed rapid growth and other dynamic market requirements have made it imperative for Indian warehousing players to overcome challenges, as well as maintain, improve and sustain competitiveness. The Government has also eased FDI norms and is promoting PPPs to pump in more investments in warehouses. Cold chain industry is also being given special incentives as it is vital to upgrade the food processing industry. Despite its strategic importance in the Indian economy, the Indian warehousing sector faces several challenges and need to be overcome with collaborative efforts of all stakeholders.
Pic1: SSI Schaefer's Weasel automated guided vehicle (AGV) navigates along an optical track that can be installed quickly, easily and in a flexible manner.
Pic2: The Kingdrive Conveyor from TGW Logistics Group GmbH.
Pic3: TGW Logistics Group’s Miniload AS&RS.
Pic4: The X2 Warehouse. Photo courtesy Davies Turner.