The e-commerce market is booming. Global retail sales reached about $6 trillion in 2024, and they’re expected to increase by 31% in future years, closing in on $8 trillion by 2028. With this growth, warehouses are under immense pressure to get orders out the door faster than ever. Nearly two-thirds of shoppers expect to receive their purchases within 24 hours, and some even want delivery in under two.
Many warehouse owners and managers face the challenge of their operations not keeping up with this demand. That’s where warehouse automation comes in, which involves using technology to move inventory in and out of your facility with minimal human intervention. Automated solutions can reduce your dependence on manual labor and speed up processes, leading to a more streamlined and efficient warehouse.
By 2027, over a quarter of American warehouses will implement automated technologies. With such incredible benefits, it’s easy to see why the future of warehouse automation is so promising. However, these solutions aren’t right for every business. Learn whether your warehouse is ready to automate and, if so, what areas to focus on.
When to Consider Warehouse Automation
When is automation the ideal solution? These business circumstances could indicate it’s time to implement automated warehouse systems in your operations:
Large Order Volumes
Automation can be a game-changer if your warehouse constantly receives an influx of complex orders. Automated systems can simplify routine workflows, such as picking, packing and shipping, helping you meet consumer demand quickly and accurately.
Labor Shortages
Finding and maintaining a reliable workforce is tough. Plus, with the country’s relatively low unemployment rate of 4.2%, the competition for labor is intense.
Automation can be a smart move for warehouses that are constantly short-staffed or experiencing rising labor costs. These technologies can help you overcome workforce issues by taking over physically demanding and repetitive tasks.
High Error Rates
While returns are necessary for warehousing, they can affect your profitability. It may be time to automate if you’re dealing with unhappy customers and a flood of returns due to high error rates in order fulfillment. Automation can help you increase accuracy by avoiding mistakes made by human workers.
Scalability and Future Growth
For warehouses that are growing rapidly and seeing a surge in order volumes, it’s vital to scale your operations as soon as possible. By automating essential processes, you’ll be able to manage a higher throughput and increased demand without needing to make new hires.
Beyond considering your business’s current needs and challenges, think about the future. Perhaps your warehouse isn’t experiencing significant growth just yet. However, your projected order and product volume growth predictions may show that your current setup won’t be sufficient to achieve your goals. In this case, automated warehouse systems can be a wise investment. These solutions are designed to grow with you, adapting to your changing requirements without major downtime.
When Not to Automate Your Warehouse
Let’s take a look at some scenarios in which automation might not be the right fit for your warehouse, at least for the time being:
Insufficient Capital
Transitioning to an automated warehouse requires a high upfront investment. Automation may not be your top priority if you have limited capital or prefer to allocate resources to other business-critical areas. Instead, making small improvements to your existing systems may be a more feasible option for now.
ROI Concerns
Calculating automation’s return on investment (ROI) is essential to determining whether the investment is worthwhile. While the costs for equipment and setup usually pay for themselves over time through reduced errors and increased productivity, you also need to factor in the expected time to ROI.
This timeline can range from one year to a few years, depending on the complexity and scale of your automation systems and technologies. If your calculations show it will take longer before you see a return, you should explore other options instead of automating.
For example, arrangements such as picking-as-a-service or robot-as-a-service allow you to rent the necessary technologies. This approach helps you reduce the upfront costs and achieve an ROI within a shorter time frame.
Low Order Volumes
For operations with low order volumes, the cost of automation might outweigh the benefits. However, automated warehouse systems are more cost-effective in high-volume environments, as they significantly boost efficiency and reduce labor costs.
High Demand Variability
Warehouses with a highly variable demand or those only operating seasonally might find it tricky to justify investing in automation. If your order volume dramatically fluctuates, the fixed costs of automation likely won’t be feasible.
Top Areas for Warehouse Automation
If your business is suited to automated solutions, here are three prime areas to focus on and the different types of warehouse automation you could implement.
1. Goods Receiving and Putaway
Automatic guided vehicles (AGVs) are self-driving carts that can navigate your warehouse floor without an operator onboard. These mobile robots take over repetitive tasks, such as moving goods from A to B during receiving and putaway processes. This strategy can significantly speed up your operation, resulting in smoother workflows.
Another option is automated storage and retrieval systems (AS/RS), which store items in specific areas within your warehouse. These systems have been engineered to follow set routes and move goods automatically.
AGVs and AS/RS are classified as robotics, one of the emerging warehouse automation trends. Robotics is becoming increasingly popular as these technologies significantly speed up operations and eliminate the need for human employees to perform tedious tasks, resulting in smoother workflows.
You can also integrate AGVs and AS/RS with pallet shuttles to minimize or reduce forklift travel, improve accuracy and save as much as 50% on labor costs.
2. Order Picking and Packing
Manual order picking is a warehouse’s most expensive and labor-intensive activity, with travel time eating into employees’ working hours. To meet customer demand, streamlined picking and packing processes are essential.
Pick-to-light (PTL) systems use lights to show workers the right items to pick. They can significantly reduce the time spent walking to locations searching for products, helping you get customers their orders faster. PTL systems can also reduce picking and packing mistakes that lead to returns.
3. Sorting and Shipping
Sorting inventory is another time-consuming and often confusing task. Using technologies like barcode scanners and sensors, automated sortation systems remove the need for manual labor to identify materials on a conveyor and send them to the correct locations in your warehouse.
While these systems can be used for receiving, picking and packing, they’re especially beneficial for shipping. This is often the last step of the warehouse process, where operations must quickly process and dispatch large volumes of orders to ensure they arrive on time.
Automated sortation systems can work longer and faster than your human employees, helping you speed up order fulfillment times. Taking the guesswork out of sorting processes also avoids errors such as sending packages to the wrong destination, ultimately resulting in happier customers.
Benefits of Warehouse Automation
For warehouses ready to take the next step and automate in the areas where it’ll make the biggest impact, there are many benefits:
- Boosted efficiency: When you implement automated systems, your operations run faster and more accurately. This efficiency translates to faster turnaround times, enhanced productivity and a warehouse that can stay competitive in a demanding market.
- Enhanced accuracy: Automation can reduce errors from incorrect picking and packing to improper package processing. Beyond saving resources, this ensures accurate fulfillment that keeps your customers satisfied.
- Reduced costs: Automating key processes can unlock significant cost savings. From avoiding inefficiencies to cutting labor expenses through reducing your dependence on a manual workforce, your warehouse can minimize operating costs by as much as 70%.
- Increased employee satisfaction: With robots and automated systems taking over repetitive and monotonous tasks, your team can focus on more fulfilling work. Participating in more stimulating activities makes them more likely to be motivated and engaged, resulting in improved employee satisfaction and retention.
- Improved safety: Warehouse work can be risky, with activities like driving forklifts or retrieving items from high shelves potentially leading to accidents. With automation, you reduce the likelihood of employees getting injured, creating a safer working environment.
Automate Your Warehouse With Burns Industrial Equipment
Implementing automation in your warehouse is the ideal solution if you’re experiencing rapid growth and dealing with high order volumes, excessive inaccuracies or labor shortages.
At Burns Industrial Equipment, our team is made up of warehouse solution experts. In addition to offering personalized guidance to help you take your operations to the next level, we’re an authorized Hyster-Yale dealer. With us, you know you’ll have access to top-notch technology and equipment.
Ready to take the first step toward creating a more efficient warehouse with automation? Contact our team today to discover various solutions that meet your unique requirements.
