Companies build the factory automation system to improve management effectiveness and productivity as prime strategies for sustainable growth. But most companies undergo various trials and errors while carrying out the project without elaborate preparation stage for factory automation. In this study, we tried to verify what factors are critical to effectively building distribution automation system, which is a branch of factory automation system. A consulting model for setting up a Material Handling Automation System by utilizing the Stage-Gate Process, which is product development process was studied. 29 material handling automation projects carried out between the year 1990 to 2013 at K-Company were selected. Interviews with the project managers, operators and maintenance personnels, various records and current status of the projects were used as data for structural equations based on the Milan consulting model and existing researches of factory automation, CIM for material handling automation. Creating effective basis of production, material handling system and energy saving system with expert review, when preparing a material handling automation project, help promote the project planning thus contributing to the performance of the resulting system, which appears though rather weakly in our data. Also the effect of material handling automation can be enhanced through sufficient and effective links to the relevant environments such as production logistics management and automated warehouses. More detailed planning characteristics of project promotion or some time-series data of effective Material Handling Automation System could enhace furthur studies. We propose a consulting model for setting up an efficient material handling automation system.