Manufacturing and distribution businesses must focus on cost reduction since they compete in an industry with razor-thin margins. As a consequence, they often spend a significant amount of effort on continuous improvement projects aimed at increasing operational productivity. The fact is that material handling may be really beneficial because it has an impact on every element of the business, from forecasting to manufacturing and even after-sales service and support.

Most businesses are unaware of how difficult material handling may be and how it might affect operating profits because maximizing space use may assist in maintaining inventory visible and easily accessible. Certain warehouses with small capacity may jam goods on a shelf, believing that this would assist with space efficiency. However, this may be counterproductive since some items may become more difficult to discover if bulkier goods are put in front.