A Process for the Strategic Redeployment Decision of Underutilized Material Handling Equipment within a third-party logistics provider’s network: a Case Study

Abstract

Title
A process for the strategic redeployment decision of underutilized material handling equipment within a third-party logistics provider’s network: a Case Study

Authors
Daniel Freire and Hendrik Jacobsen

Contribution
This thesis has been a complete collaboration between the two authors. Each author has been involved in every part of the process and contributed equally.

Supervisor
Joakim Kembro, Associate Professor at the Division of Engineering Logistics, LTH – Faculty of Engineering, Lund University
Examiner
Ebba Eriksson Ahre, Postdoctoral fellow at the Division of Engineering Logistics, LTH – Faculty of Engineering, Lund University

Purpose
The purpose is to develop a process flow that can match underutilized MHEs with WHs that have a need of it, in order to maximise the utilization of MHEs throughout the network of a third-party logistics provider (3PL), allowing for increased productivity and operational efficiency.

Research Questions
RQ1a: How should MHE utilization be measured
RQ1b: How should MHE underutilization be defined?
RQ2: How can underutilized MHEs continuously be matched with WHs in the network?

Methodology
This thesis is a single case-study with embedded units of analysis. The case was illustrated by a case company which provided access to its employees and data. The evidence gathered is used to build hypothesis which are then tested to determine its validity.

Findings
The main challenge for utilization measurement is data accuracy, which conditions the thresholds for defining underutilization. The lack of current metrics at the case company didn’t allow to validate these values. However, based on the knowledge obtained from the literature studied, as well as from the interviewees it was concluded that below 40% utilization an MHE should be considered underutilized. Furthermore, it was determined that an MHE should only be considered available for redeployment if it is consistently underutilized, there it was determined a threshold of 13 consecutive weeks. To continuously match underutilized MHEs with WHs a process flow was built. This process allows for the continuous utilization measurement based on the findings of RQ1 and provides suggestions of where to redeploy. These suggestions are based on adapted selection criteria which check for feasibility of the MHE to operate in the WH and then favourability of what MHE matches better with each WH. This complete process flow answers RQ2.

Popular Abstract

Strategic Redeployment: Optimizing Asset Utilization in Global Warehouses
In the highly competitive global logistics industry, maximizing asset utilization is a critical operational challenge. While some facilities invest heavily in new Material Handling Equipment (MHE) to meet operational demands, other warehouses within the same network often house identical MHEs that remains largely underutilized. This research addresses this inefficiency by developing a systematic, continuous process to identify underutilized MHE and strategically redeploy it to warehouses with high demand. Through rigorous data analysis, the project established a standardized metric: if a MHE operates below 40% of its capacity for 13 consecutive weeks, it is officially classified as underutilized and becomes a candidate for redeployment.

Operational and Behavioural Challenges
Redeploying MHEs involves navigating a complex matrix of physical constraints and behavioural tendencies. A MHE cannot be transferred without first assessing strict operational limits: aisle widths must be compatible, mast heights must clear ceiling limits, and the forks must accommodate local pallet dimensions. This transforms the centralized sharing of MHE into a complex management issue, navigating the technical hurdles.

The Strategic Impact of Resource Optimization
The implementation of a strategic redeployment process offers substantial benefits for third-party logistics (3PL) networks. By shifting from an exclusive focus on purchasing to a reality where a redeployment model is also considered, companies can respond to sudden market shifts with greater agility and increase their efficiency across the network. This process functions as a support for the strategic resource redeployment, by identifying underutilized MHEs and generating data-driven recommendations for where it can provide the most operational value.

Methodology and Implementation
To construct this solution, researchers analysed extensive operational data from hundreds of MHEs across six warehouses within the European network of a 3PL. The research developed a hybrid model that evaluates potential redeployments. This model first filters out strict operational "dealbreakers" (such as lifting capacity and turning radius) and subsequently scores "nice-to-have" variables (like operational flexibility and spare part availability) to identify the optimal operational match between an underutilized MHEs and a warehouse with demand.

• author: Freire, Daniel and Jacobsen, Hendrik
• supervisor: Joakim Kembro
• organization: Production Management; Engineering Logistics
• course: MTTM02 20261
• year: 2026
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Material Handling Equipment, Utilization, Underutilization, Redeployment
• other publication id: 6071
• language: English
• id: 9244707
• date added to LUP: 2026-08-18 13:26:30
• date last changed: 2026-08-18 13:26:30