As more operations adopt automated tools and industrial robotics, warehouses are moving toward full automation. The boom in the eCommerce industry, multiple distribution channels and supply chains are pushing businesses to a greater level of warehouse automation. Companies adopt these cutting-edge tools alongside warehouse management software to stay agile and up-to-date.

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Table of Contents:

• What Is an Automated Warehouse System?
• Why Do You Need Warehouse Automation?
• Solving Problems With Automation
• Primary Benefits
• Vital Technology

According to LogisticsIQ, the warehouse automation market will reach $41 billion by 2027, growing at a CAGR of 15% between 2022 and 2027.

Judging by this expected increase in the application of AI, automation is here to stay. In the world of warehouse management, this means considering the benefits of adopting an automated warehouse system and warehouse automation.

For warehouse operators and logistics companies, distribution, manufacturing and supply chain processes change quickly. Before diving into some of the must-have warehouse automation technology, let’s start by discussing what an automated warehouse system is and why you need one.

What Is an Automated Warehouse System?

An automated warehouse management system is software that helps warehousing operations integrate AI and robotics into their daily processes. Automated warehousing uses a few key pieces of tech to get moving. For example, an automated storage and retrieval system (ASRS) combined with a warehouse management system (WMS).

At its most basic, warehouse automation technology attempts to cut down on manual tasks that slow down the movement of goods. When a product has to make several stops as it travels through a warehouse, it increases the likelihood of a problem occurring. You can restore valuable resources by decreasing product touches and reducing product transportation costs.

Locus Robotics raised over $40 million in an attempt to start automating warehouses using robots. By leveraging robots and pairing them with human employees, they aim to increase the volume of shipping products in and out of warehouses.

The value of a fully automated warehouse system is apparent, but what types of problems can they help operations address?

Why Do You Need Warehouse Automation?

DDue to demographic disruptions across global supply lines, deep strains continue to challenge the labor market. With the demand for higher throughput, automation is indispensable for warehousing industries worldwide.

How do you expect to update numerous programmable logic controllers (PLCs) if your warehouses still operate manually?

Inefficient warehouse processes negatively impact customer satisfaction. Warehouse automation solutions support multiple critical processes that boost efficiency and keep customers happy. From optimizing repetitive operations to reducing unnecessary costs and increasing productivity, automation is transforming the warehousing industry.

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Solving Problems With Automation

Warehouses need help with costly issues that can prevent them from achieving their true potential. One of the biggest pain points warehousing operations face is improving productivity and efficiency while reducing costs. It may seem straightforward, but increasing speed and reducing time spent on tasks can be difficult or even dangerous in a fully-staffed warehouse.

Employees need a safe environment to work in, and things can take a dangerous turn if they work faster. The health and safety of employees are paramount; expecting them to move quicker is taxing. Creating an environment where multiple employees are sprinting around with valuable products doesn’t help anyone.

Adopting warehouse automation technology can solve this problem in many ways. Firstly, human employees can handle issues robots cannot tackle. For instance, automating picking and product transportation processes boosts planning and management.

Robotics can scale up and down as time progresses. Integrating robotics and automation support extra workloads without creating an unsafe workplace.

Conveyors can carry the product across the warehouse for faster transportation without employee involvement. Efficiency, accuracy and optimization can ratchet up while employees chase down leads, manage equipment and plan for the future.

So, now that we know what an automated warehouse is and what problems it can help solve, we can dip into some significant warehouse automation benefits.

Primary Benefits

The benefits of automation in warehouses are manifold and can solve multiple business-specific challenges. Getting your warehouse automated offers many possibilities. Let us look at some of them below.

Increase Speed

We already touched on one of the advantages of automated warehouses: speed. The quickest human with the best memory will always fall behind an automated warehousing system that can identify the locations of items in real time. Automated systems leverage optimal routes that further boost product-picking efficiency.

Warehouse automation doesn’t just speed up product retrieval but also improves order fulfillment. One of the biggest success stories involving order fulfillment optimization is Diapers.com. The online retailer utilizes robots and conveyors to increase order fulfillment speed, increasing their chance to offer free overnight shipping.

You can also speed up your inventory management with automation warehouse technology. Rather than dispatching people to record items manually, you can use technology that automatically counts them. Maintaining regular inventory control is one of the most time-consuming manual tasks, but automation makes it easy.

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Reduce Costs

Another valuable benefit of warehouse automation technology is cost-cutting across the board. Integrating automation systems isn’t cheap, but they quickly start to pay for themselves. Paying manual labor eclipses the costs of using automation technology.

Automated applications and systems significantly increase ROI compared to manual labor. A single robot arm does the job of four manual laborers. Having a robot handle tasks can drastically increase ROI and reduce production costs.

This idea is especially true for retailers that have to deal with overtime during the busy holiday seasons. When it gets close to the busiest time of the year, overtime usage can spike as employees log additional hours to help keep up.

With warehouse automation in place, you can keep your machines running longer without incurring extra costs. After all, machines don’t have to worry about holiday spending money.

Improve Performance

Working continuously for long hours is likely to cause fatigue and injuries. Warehouse jobs can be unsafe for employees handling manual tasks. Automation can help prevent these issues while boosting overall warehouse productivity.

The IoT is changing a lot for people working in the manufacturing and logistics industries. It can detect malfunctions in all types of equipment and warn employees before an incident happens. It also helps maintain machines and track equipment that needs repair.

With connected devices and sensors, employees can track the movement of goods in real time. This functionality helps warehouses maintain their storage capacity and improve cash flow. Tracking how much goes in and out prevents you from over-ordering and ensures only popular products remain in stock.

Maximize Space

Maximizing space is one of the most significant advantages automation provides. Space is a finite resource, especially in warehousing and distribution facilities. Products create an ongoing Tetris game that becomes more difficult to handle.

Luckily, warehouse automation systems help maximize available space. The real question is, how?

Most warehouse automation systems feature robots or other machines that handle product retrieval and storage. Considering this advantage, you can always do away with the wide isles human employees need to navigate pallet jacks as robots can travel efficiently in less spacious environments.

Warehouse automation technology, like robots, can do all the heaving lifting with mobile, orientable shelves. Implementing robotics frees up valuable floor space, which makes room for even more product storage.

Now that you know about the significant advantages of warehouse automation let’s look at the technology that makes it happen.

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Vital Technology

If your distribution or manufacturing operation uses redundant systems, it’s time to branch out and innovate. Investing in newer software is a great way to future-proof your business and ensure supply chains operate at peak efficiency. It’s not just good for your customers; it’s a fast track to bigger savings.

Maintenance, repair and overhaul (MRO) services hugely contribute to the global warehouse automation market. These services will grow at a CAGR of 2.70% between 2022 and 2027.

Other automation trends include storage systems, AIDC, palletizing and depalletizing, conveyor systems and more.

Automation is huge for this industry right now. It can save businesses hundreds of thousands of dollars as errors decrease and turnaround times reduce. With this in mind, let’s look at some types of technology in modern automated warehouses.

Internet of Things (IoT)

IoT plays a significant role in bringing product delivery and automation together. Without it, industries can’t move and connect items in and around the warehouse. Leveraging this technology for smooth operations and efficacy improves the performance of warehouse systems.

The IoT connects devices like wearables, headphones and mobile devices to gather and exchange data. IoT devices can synchronize, monitor, detect and receive information. Other benefits include better inventory management, on-time delivery, warehouse productivity and more. Drones, sensors, RFIDs and beacons are devices that store, retrieve and scan data.

With firms implementing RFID tags and sensors, it is easy to say that IoT-enabled warehouses are a success.

EDI Communications

The term “big data” should be very familiar to you at this point, no matter what type of products or services you handle. It’s revolutionizing the business world because responsive, actionable business intelligence is the key to peak efficiency.

Now, it’s starting to make its mark on the distribution and warehousing sectors. With the global EDI market forecast to reach a value of $3,451.3 million by 2027, it is evident that the market will continue to expand.

EDI (electronic data interchange) software shares data and documents between two linked computer systems. It’s a tool many warehouses already use, but its applications are getting broader with time.

Modern EDI systems provide a unified communication method with service providers and a single mapping set for each transaction. Some common uses involve sharing shipping and purchase orders, stock transfer receipts, inventory and shipping advice.

The benefits of EDI communications come into play when it integrates with a robust WMS. EDI facilitates the smooth movement of data between multiple computer networks. However, the systems don’t have to be the same for this to work.

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Drones

Drones are still so new and high-tech that it’s hard to believe they’ve already made it out of science fiction stories and into our warehouses. Yet, most distribution centers around the world are already using them. They have a wide variety of applications in storage solutions, but the most promising relate to manual processes like picking, packing and sorting.

It’s thought that future warehouses will use automated drones to reduce the number of errors during scanning and selection tasks. For example, if drones replace manual workers, mistakes will drop, and stock managers will have more options. At the moment, products with scannable barcodes are excellent systems for manual workers, but drones can potentially be far more robust.

Drones are much more capable of scanning stock, cycle counting and providing live feedback than traditional methods. According to DroneScan, live reporting is almost possible using visual and auditory feedback.

On-demand Warehousing

Currently, warehouse vacancy rates around the world are falling rapidly. This issue drives the development of what is known as “on-demand warehousing.” Market experts believe it’s the next logical step in collaborative logistics and supply chain management.

It’s a simple process. First, register with a warehouse matching service, such as FLEXE or Flow Space. Think of them as the Airbnb of the warehousing world.

Storage centers give service updates when they have vacant spots. Then, the operators match them up with manufacturers looking for storage space or support for distribution. The goal is to streamline the process and help businesses in need find each other quickly to minimize lost profits.

On-demand warehousing can help companies respond to fluctuations in market demand, mainly during seasonal and predictable changes. Seasonal stock may be stored separately from primary warehouse space to conserve room and process orders quicker and more efficiently.

However, with changes caused by the pandemic, businesses were skeptical of a long-term sublease for warehouse space. It accelerated the need for solutions that provide a short-term commitment. One of the significant reasons why short-term, on-demand warehousing became a mainstream necessity during the pandemic.

Companies are no longer required to sign a 10-year lease if they’re only looking to solve a five-month problem. It further led to an increase in demand while driving flexibility and agility in their operations. Companies can now find space in 24 hours for storage with short-term, on-demand warehouse solutions.

Cloud Computing and Storage

Cloud technologies are continuing to transform the distribution and logistics industries. Automated warehouses can also benefit from the numerous advantages a cloud-based system provides.

With the support of autonomously hosted and updated computer systems, businesses can reduce maintenance responsibilities, labor expenses and infrastructure costs. These savings occur through the supply chain, even from the point of installation.

The quality and reliability of cloud computing services are a necessity and not an optional upgrade. Every business should invest in cloud technologies, but the need is especially urgent for those still utilizing much older legacy systems.

Since cloud ASRS systems are usually self-managing, you have the opportunity to create centralized IT assets. It reduces the impact of losing any one member of your team because you can implement a solution that’s cost-effective and easy to use by all employees in the department. However, to achieve this, you must handle integrations with care.

If you are in the market or just curious about what a cloud-based WMS could do for your operation, take a look at our comparison guide to see some of the top competitors in the market.

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RFID Tagging

Radio frequency identification (RFID) is another technology used in warehouses throughout the United States. RFID uses radio waves to transfer data to or between digital tags or labels.

You can attach a digital tag to objects and packages instead of designing and creating a paper label that has to be torn off and reapplied with every edit. These tags can store a large amount of data compared to barcodes.

This data is then processed and read with special scanners close to it to capture it. A typical RFID reader can scan over 200 tags at a greater distance in one attempt. One of the significant benefits of leveraging RFID integration is a substantial increase in stock visibility.

Since these tags can change and update instantly, tracking inventory is easier. Labels won’t fall off, get lost, or be tampered with, lowering the risk of missing goods. Plus, the expectation is that drone technology will soon work with RFID tags to create self-directed automated sorting systems.

Robots

The global warehouse robotics market will grow at a rate of 15.25% from 2022 to 2029. Automation is the key to development within the supply chain and logistics sectors. We know this because robots are undoubtedly faster and more accurate than people.

Studies have shown that the more automation within a business, the more productive it becomes. This prediction is one major reason robotics play a big part in WMS innovation, perhaps one of the most renowned automation technologies.

If you can load, sort and pack stock faster, you can hit more targets and substantially increase your percentage of on-time deliveries. Bechtle is one great example of how the company uses SAP warehouse robotics to maintain on-time deliveries.

These factors directly impact customer satisfaction and your ability to generate revenue. While some form of human management is still required, there are a lot of savings to be made if these roles can be limited to advisory tasks.

Amazon is a global leader when it comes to the integration of robotics. In some of its warehouses, it now operates with fully automated machines. They assign these robots to specific parts of the building where they pick up products and deliver them to the next operator in the supply chain while working alongside thousands of human employees.

The system is fast, accurate and highly efficient. It saves time and money due to its skillful implementation.

AGV and AMR

Automated guided vehicles (AGVs) and automated mobile robots (AMRs), also called mobile robots, are emerging warehouse automation trends. Though they’ve been around for decades, it was during the pandemic that the demand for AGVs and AMRs exploded.

AGV and AMR individual market rates are expected to grow by 24% and 43% respectively by 2027. Both mobile robots will revolutionize material handling and warehouse picking within five years. While these robots are already dominating the market, it is no surprise that the biggest drivers of growth hail from the U.S. and China.

AGVs and AMRs automate industrial processes, including transporting materials across warehouses, factories and distribution centers. However, they differ in multiple ways, such as following navigation, installation and flexibility.

Cobots

Cobots! Yes, you read it correctly. Cobots or collaborative robots are machines that work in tandem with humans. To be precise, they’re already ahead in the game playing critical roles in warehouse management. This technology increases warehouse performance and efficiency, including palletizing, packaging and preparing orders.

A report by Future Market Insights predicts that by 2029 the cobot industry will likely reach $8.65 billion from $1.71 billion in 2022. According to studies, cobots can reduce non-productive work and improve production performances while working alongside human employees.

Cobots increase productivity and efficiency by helping operators with repetitive processes. They maximize throughput by moving around the installation, allowing human employees to focus on valuable tasks. Cobots are cheap and affordable compared to industrial robots and can handle multiple tasks during production. This technology is still new, but studies say the numbers will increase shortly.

Keeping track of all these technologies when considering your operation’s future can be daunting. Luckily, our requirements guide can help anyone who feels a bit lost find their way toward a perfect warehousing system solution.

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Final Thoughts

The good news is that there are plenty of options for those committed to building automated warehouse systems. The downside is that much of the technology on the hardware side is still relatively expensive to install and integrate. While it’s certainly true that things like drones and robotics can save a company sizable amounts of cash, you’ve got to be willing to invest heavily first.

Smaller companies and those on a budget must start with cloud systems if they haven’t already. Many cloud-based systems can help harness the power of automation while providing significant advantages like better network security and scalability.

How has implementing warehouse automation helped boost your warehousing efficiency? Let us know with a comment below!