May 17, 2020

Why Warehouses are Adopting Automation

Freddie Pierce
4 min
Joel Anderson, President, IWLA

Next generation warehousing may sound like the name of the latest Star Trek film but automated warehousing is, in fact, the future of the warehousing a...

Next generation warehousing may sound like the name of the latest Star Trek film but automated warehousing is, in fact, the future of the warehousing and storage industry as we know it. The concept actually dates back to the 1950s when the first Automatic Guided Vehicle (AGV) was brought to market (A Guide to Robotic Logistics, At the time, automated meant that a tow truck could move via a wire in the floor, as opposed to by rail. Ok, so it might not sound like the most advanced technology but the idea since then has remained the same; to utilize cutting edge equipment in warehousing in order to increase productivity and accuracy.

Joel Anderson, President of the International Warehouse Logistics Association (IWLA), agrees about the ways in which automation can be an advantage to the warehousing sector. “The benefits of automation encompass reducing the unit cost of labor, increasing the throughput and reducing the number of errors,” he explains.


Anderson highlights the specific technologies currently being adopted by warehouses. “Among the most prevalent technologies being used are in Pick and Put to Light, voice-directed picking, motion detector lighting, low energy usage lighting, low carbon emissions forklifts, skylights, package carousels and many others,” he says.

Some of the other more familiar forms of automated applications currently being utilized in warehouses and storage facilities include robot palletizing systems which use flexible definition software to pick goods and palletize them. The robot application can also add slip sheets, cartons and trays to pallets, dependent on the product. Wrapping machines are now also a frequent sight in warehouses, as are Warehouse Management Systems (WMS), such as those designed by Oracle.

In a white paper entitled ‘Order Picking for the 21st Century: Voice vs. Scanning Technology’, Aaron Miller, Principal at Tompkins Associates, takes an in-depth look at the voice-directed warehouse solution and its use as an order picking tool. Mispicks are a common but costly error in the order picking process. For this reason, companies are turning to speech recognition technology to iron out the errors, thereby reducing inefficiencies.

Miller reveals that voice-directed warehouse order selection is more accurate and productive than both handheld scanning and paper/label based methods. He cites one company as having made savings of $1.3 million in one year following the implementation of voice, and a 50 percent reduction in returns.


Automation certainly has come a long way in the last few years but its development is likely to pick up pace in the future as companies face increasing pressure to cut costs in the supply chain.

“I see automation continuing to progress for a variety of reasons, but primarily because of the pressure to produce as close as possible to 100 percent in timing, processing, returns and fulfilment — in all of the functions performed inside the warehouse and outside with respect to the scheduling of truck and train transportation,” Anderson explains.

100 percent reliability is required of any supply chain today, he continues, which is why automation has such a significant part to play.

A study released in February this year by Stanford University and TradeBeam recognized the potential gains for companies who automate their supply chains. The research, ‘How Enterprises and their Trading Partners Gain from Global Trade Automation: A New Process Model for the China-US Trade Lane’, found that organizations could stand to achieve improvements of between 10 and 40 percent by implementing global trade best practices and accompanying automation.


In practical terms, automation is a huge commitment for companies and carries its own risks and costs. “A facility requires a certain level of scale or operation to obtain the returns needed to justify adopting automation,” Anderson says.

Along with reduced costs and inefficiencies, there is a belief that automation results in mass redundancy. In the current economic climate, job losses are an all-too-familiar sight but Anderson believes that automated warehousing poses no such risk to the industry. “We should note that at the same time the use of automation has increased in business operations, we have also grown the workforce.”

He continues: “We have continued to grow jobs, although there has also been a shift to the service sector from manufacturing.”

Next generation warehousing then has advanced at a consistent pace, in line with the ever-changing needs of the supply chain. It would be too simplistic to say that one day warehousing will be entirely automated (and too reminiscent of a bad sci-fi film to believe that warehouses will be run by robots in the future). However, robotic logistics holds a lot of potential for the industry. We’ll just have to wait and see where it takes us.

Share article