Warehouse Automation Explained: Benefits & Challenges 

Warehouse automation is the practice of using software and other technology to automate manual processes within the warehouse. As mentioned in our Warehouse Technologies and the Future of Fulfilment guide, warehouse automation is one of the three smart warehouse technologies currently on the rise. Other smart warehouse technologies being adopted by forward-thinking warehouses include small, localised distribution networks and digitised and integrated warehouse processes.  

How does automation work within a warehouse?

Whether it’s receiving, picking and packing, or shipping automation can be brought in at any stage in the fulfilment process. Take picking-and-packing robots, these are AI robots that replicate the actions of human pick and packers in the warehouse. They can scan, identify, move, and package warehouse inventory. While automated guided vehicles act as self-driving forklifts that can move items that have been received or are ready to be shipped in and out of the warehouse.  

Let’s take a look at the five main types of warehouse automation technologies: 

1. Automatic guided vehicles (AGVs): these are self-driving forklifts that can move inventory around your warehouse without the need for a driver. These forklift vehicles often use reflector navigation in which reflectors are added throughout the warehouse and are scanned by the forklift so it can navigate through the warehouse safely. 
2. Goods-to-person (GTP): this is an automated order fulfilment system in which items are brought to a warehouse worker for picking by autonomous mobile robots. They can make the process more accurate, reducing the likelihood of picking the wrong item (as with human pickers).  
3. Automated sorting systems: these systems identify stock on a conveyor belt and send them to specific areas of the warehouse for processing (such as to the packing stations).  
4. Automated dimensioning systems: these systems can capture images and read barcode data in order to automatically capture parcel and pallet details. These tools can be used by workers to take care of the dimensioning process. 
5. Drones: drones (or unmanned aerial vehicles) are flying devices that use cameras to record data inside a warehouse. They can perform several tasks such as inventory auditing, finding stock, and providing additional security. 

Let’s explore some of the main benefits of warehouse automation. 

1. Reduced errors

From investing in training to undertaking annual warehouse layout audits, warehouse operators are always looking for new ways to reduce errors in the warehouse.  

The main benefit of automating warehouse tasks is reducing the number of human errors we see within the warehouse as fewer tasks get performed manually. By breaking down and automating your warehouse processes, you can cut back on human errors in areas such as:  

• Tracking inventory levels 
• Sending customer emails and invoices 
• Creating pick lists 
• Selecting couriers based on package dimensions and weight 
• Printing shipping labels 

In doing so, you’ll also see additional benefits such as higher customer satisfaction and fewer customer returns or redeliveries due to incorrect items being packed or incorrect shipping labels getting added to packages by warehouse workers.  

2. Improved efficiency

All businesses want their employees to work as efficiently as possible and automating warehouse tasks is one of the best ways to enhance efficiency within the warehouse.  

For example, you can also use automation tools to implement a barcode scanning system that connects to your warehouse management system. You can use this system to automate pick lists based on the urgency of orders. This system will send your pick lists directly from your system to your employees’ handheld devices, each pick list will include stock location information to speed up the picking process. Read more about using data to increase order fulfilment efficiency. 

To go to the next level of automation, test out autonomous mobile robots (AMRs) in your warehouse. AMRs can be programmed to collect items from a stock location and bring them to an employee in the packing area. 

3. Increased warehouse productivity

By improving efficiency and helping your employees avoid making mistakes through warehouse automation, you’ll likely see your overall warehouse productivity increase. Automation can improve productivity in the warehouse by up to 35%.  

By replacing human touch points with automation, things in the warehouse will move much faster. Thanks to automation, staff will also have time to focus their attention on other things; take GTP tools that you can use to deliver inventory to warehouse workers’ operation stations, reducing the amount of time employees spend walking around the warehouse. By sending workflow changes to your pickers through the system based on urgency, there will be less delays in processing and your staff will know where to allocate their time and attention first.   

4. Reduced costs

McKinsey reports that automated warehouses can cut operational costs by 20%. By automating your warehouse operations, you can reduce overheads on staff, run into less unexpected overtime, and save on your budget by hiring fewer team members needed.  

In addition, a reduction in errors will result in fewer returned items and refunds. While employing AI to ensure accurate and real-time inventory levels will mean there’s less chance of over ordering and eventual inventory loss. 

5. Scalability

Warehouse automation can help you rapidly scale your warehouse operations when necessary, such as during peak holidays or seasons like Black Friday and the rest of the festive period. With efficient automation processes in place, you can stock up on inventory and map your warehouse locations for the fast picking of popular items, quickly recruit seasonal staff without the need for drawn-out training, and book couriers for higher levels of shipments with minimal human involvement.  

You also need to be aware of the most common warehouse automation challenges. The initial investment in automated systems can be expensive. You’ll also need to factor in the cost of maintenance and repairs.  

Beyond costs, new machinery and systems require training for their safe and effective use. Warehouse staff may struggle to get to grips with new tools during onboarding and may resist using new approaches if they have been relying on the same processes for many years. It’s important to address any concerns and to talk them through the benefits of automation.  

Warehouse automation can be expensive and require a lot of upfront capital. A mechanised solution can cost from £700,000, up to £3,500,000. A semi-automatic system can cost up to £10,500,000. In addition, a fully automated system can cost at least £17,500,000. Costs may include the systems themselves, onboarding, new staff with the right expertise to use the equipment (if specialists are needed), and ongoing maintenance and repair costs.  

Despite the initial expenses, the upfront costs often quickly balance out as 62% of warehouses that use automation report cost savings thanks to increased productivity and efficiency and a reduction in returns and stock damages due to less human error.  

Let’s review five best practices to follow when bringing in warehouse automation: 

1. Use a WMS alongside automation technologies: a WMS can be an essential tool for providing visibility into how your automation tools are impacting your operations and for improving efficiencies at every stage in the process, from helping you monitor your stock levels to helping you reduce waste.  
2. Take things slowly: bringing in too many new technologies too quickly can be disruptive for the warehouse. Start with a WMS and one tool that you think will make the biggest difference to your operations and then review the following quarter to see how staff have responded, whether your tools have impacted your KPIs, and whether it may be a good time to bring in another type of technology.  
3. Set up regular reviews: regularly reviewing your performance metrics to see how your tools are performing is essential to making sure you’re using the right tools and getting the most out of them.  
4. Get feedback from employees: beyond regularly reviewing your metrics, your employees can give you more detailed information on how your tools are performing, if there are any safety concerns, or if they’re finding the tools difficult to use.  
5. Make use of integrations: never just look at how your automation tools will impact operations by themselves, consider how your tools may improve your results by working together. For example, you can integrate Radio Frequency Technology with your WMS to provide visibility on your inventory, automating data capture and improving traceability.  

Warehouse automation is one of the best ways to reduce errors, cut costs, and increase efficiency and productivity in the warehouse. If you’re looking to bring these tools to your warehouse, it’s important to factor in your budget, invest in employee training, and carefully track their performance.  

In addition, using a WMS alongside other automation technologies is a great way to get more visibility into how these tools are performing and gain greater control over their operations and performance. To find out more about Mintsoft, our cloud-based WMS, take a look at it’s features and capabilities here, or alternatively, book a demo with one of our warehousing experts.