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Why is Warehouse Automation Growing So Fast? (And Will You Be Left Behind?)

Warehouse automation is booming. The industry that uses technology like robots, sensors, and software to handle repetitive or dangerous tasks is coming into its own, and warehouse operators will soon have to decide whether to jump on board or be left behind.

In 2021, the global warehouse automation market was valued at $13.6 billion. By 2031, it’s expected to be worth more than $57 billion – a jaw-dropping 15.3% compound annual growth rate. Though most US warehouses operate with little automation today, a 2021 survey found more than half planned to automate parts of their facility over the next five years.

What’s Driving the Growth of Warehouse Automation?

We are at the dawn of a new age in technology. Artificial intelligence and advanced robotics can be found in everything from heavy equipment to home entertainment.

In warehousing and logistics, this tech explosion comes at the perfect time to address three issues facing the industry at the same time.

  1. Rising global population. In 2020, there were 7.5 billion people in the world. By 2050, the UN projects that number will reach 9.8 billion. More people means more demand for goods, putting a strain on warehouses. The average U.S. warehouse is 43 years old. Refurbishing outdated structures with modern automation makes better use of the available space and adds years to their functional life.
  2. The rise of e-commerce. Online shopping has been steadily growing for years, but in 2020, stay-at-home orders related to COVID-19 made it fundamental. Post-pandemic, shoppers comfortable with the convenience of buying from home do not seem inclined to head back to the stores. Online shoppers expect their order to arrive as accurately – and almost as quickly – as if they had picked it up on Main Street. Warehouses had to shift from shipping out store inventory-sized lots to individual-sized orders. Automation makes it possible to pick, pack, and ship these orders with high accuracy and no slowdown on throughput.
  3. Labor shortages. The population might be rising, but you’d never know it by looking at the available warehouse workforce. Warehouses have been battling for years over a tight labor pool. Automation helps facilities run more efficiently with fewer people. While the idea that “robots are coming for workers’ jobs” has a lot of alarmist appeal, there doesn’t seem to be much data to back it up. In fact, warehouse automation has largely been people-centric: more than one-third of warehouse owners report automating functions to relieve employee burnout. In Lucas’ Voice of the Warehouse Worker Survey, 88% of warehouse employees said they view a company’s investment in automation as an investment in worker well-being.

How Will Warehouse Automation Impact Warehouse Workers?

It turns out automation is not threatening to steal workers’ jobs – it’s promising to improve them. Workers freed from mundane, repetitive tasks report higher job satisfaction as they engage in more mentally stimulating work and are given room to build new skills.

People are also keen on machinery that improves worker health and safety. Warehouse work is notoriously strenuous. Workers might log miles of steps on a single shift, and are prone to muscle strain and repetitive stress injuries. Shifting the heavy lifting – literally – to machines prevents injury and improves worker quality of life.

Workers are also excited about the idea of technology that helps them achieve goals and excel at their job. In particular, tools that improve picking speed and accuracy are in high demand. Almost three-quarters of respondents to the Lucas survey said they would consider taking a pay cut to work in a place where technology made their jobs easier.

The Pros and Cons of Warehouse Automation

Growing adoption of warehouse automation has great promise, but like anything, progress comes at a price.

Advantages of Warehouse Automation

  • Lost inventory is rare in facilities that use automation to track product. Clear visibility of an item’s journey from the time it was received until the time it ships reduces loss and the frustration it causes.
  • Speed is one of most-recognized advantages of warehouse automation. Faster throughput means more orders processed in less time, which shows on the bottom line.
  • Machines can access spaces humans can’t. Mobile racking systems and automated guided vehicles (AGVs) operate in spaces too tight for a forklift. Vertical storage solutions allow warehouses to make use of space that was wasted before.
  • Improved pick accuracy means happier end users and fewer resources dedicated to processing returned orders.
  • Automated warehouse management systems provide real-time inventory management. Stocks are automatically replenished before they reach a critically low point. If a call comes in for a product, workers can instantly see exactly how many are available.
  • With warehouse labor at a premium, efficient use of labor hours has never been more important. Automation means workers spend more of their time on valuable, high-level activities and less on walking around retrieving items.
  • Automated tools monitor the condition of machinery and suggest predictive maintenance – performing repairs and adjustments before something breaks, but not before you’ve gotten your money’s worth out of it.
  • Perhaps the greatest appeal of warehouse automation is its scalability. Users range from facilities using one or two tools to those that are fully automated. What’s more, warehouse automation can be scaled up or down to suit the needs of any given facility at any given time, making the need for seasonal hiring a thing of the past.

Disadvantages of Warehouse Automation

  • Though the return on investment tends to be quick, warehouse automation often comes with a steep initial cost.
  • Technological advancements tend to create as many jobs as they take. But there will inevitably be some workers displaced as their jobs are cut and they find themselves unqualified for the new roles.
  • Warehouse automation is not a quick and easy add-on. It requires an upfront investment of time and resources on planning and organization to be successful.

How Warehouses are Using Automation

WMS. The first piece of automation in most facilities is a warehouse management system (WMS). This master software is like the facility’s brain, tracking inventory and coordinating the activities of all the specialized tools.

Receiving. Automation at the receiving dock quickly captures data that will impact workflows downstream. Automated putaway systems get products from receiving into storage quickly and can help with cross-docking, where goods are received, processed, and placed on outbound trucks without ever being stored in the warehouse.

AS/RS. Automated storage and retrieval systems condense sprawling storage into a compact footprint, then use shuttles, carousels, and conveyors to pick, move, and stock inventory with little human intervention.

Conveyors. More than half of warehouses are expected to invest in new technology to move product around the facility. This includes conveyors, shuttles, and AGVs.

Picking. Automated warehouses improve efficiency using picking technology such as pick-to-light systems, pick modules, and automated sorting devices.

Packaging. Packaging and shipping errors are costly in terms of actual dollars and in terms of customer trust. Automated packaging solutions reduce errors and get orders out the door quickly and accurately.

How to Automate Your Warehouse

The first step in automating your warehouse is to evaluate its design and layout. Many automated tools have specific space and layout requirements to be successful. You’ll also need to make sure you have infrastructure like ample power supply to operate your new tools. Before investing in equipment that could prove to be a costly mistake, get the advice of a warehouse designer who understands your goals and is deeply familiar with the automation tools available.

No matter what scale of automation you’re considering, if you want to improve efficiency for the long haul, start with automated data collection and storage. Mobile barcode scanners deployed at receiving log data on all incoming products and smooth the way for all downstream workflows.

When choosing your automation solutions, build for the future. Invest in scalable technology that suits your needs now and will continue to serve you as you grow.

Finally, set up maintenance schedules from the start. You’ll want to keep your expensive equipment well maintained so it serves you for years to come. Consider robots-as-a-service as an affordable option to manage repetitive tasks.

Warehouse automation is moving quickly from high-tech luxury to competitive necessity. To develop a customized plan that fits your needs, budget, and growth projections, get in touch with our warehouse design experts.

About the Author

Tom Compton


Tom Compton is the President of Industrial Shelving Systems (ISS) and retains an active sales role with both ISS and ISS Material Handling. Tom is a seasoned professional who has been working in the industry for over 10 years. He holds a Bachelor of Science in Mechanical Engineering from Mizzou, where he honed his expertise in designing and analyzing mechanical systems. Tom has continued to show his dedication and excellence in the field by earning a 6 Sigma Green Belt. When Tom is not working, he spends his time with his family and friends. A devoted father of three children, he also is an avid sports fan and enjoys playing hockey and golf in his free time. He is also passionate about NHRA racing and follows the sport closely.

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