Abstract-Food and Beverage manufacturing companies face challenges today due to their high competitiveness, poor working conditions, and more stringent regulations. Growing demand for high quality products and frequent changes in the variety of products by the consumers had an impact on the viability of the food and beverages manufacturing sector. Working conditions for many food and beverages operatives are difficult, as it requires large number of labours for handling. In the present scenario, the production cost increases due to the handling of material from one place to another inside the factory by using the unskilled labour. Due to shortage of labour majority of the manufacturing industries are facing problem and there is a drastic reduction in total output and not achieving the required target is a common weakness In most of the small scale food and beverage manufacturing companies manual handling is adopted to transfer the raw material from one place to other, transfer of semi- finished material from one equipment to other and finally transfer the final finished products to the packing section and storage division. In all these stages movement of material takes place with help of semi-skilled workers. Because of this required quality is not achieved. Finally cost of the product increases, which they are not in a position to match the competitive market. One of the major reasons for slow growth of the Indian Economy is the improper handling of materials and unnecessary costs incurred. This research paper focuses on the benefits of utilising the material handling system with properly planed plant layout and automation, there is a drastic reduction labour cost and it avoids the damage caused by manual movement of material, which results in better- quality product with less cost of production. Good handling system also improve inventory control, less fatigue of workers, greater industrial safety with less accident potential and disruption of work, improved morale of workers.