No matter how much the global economy might change, warehouses are here to stay. This time last year, it looked a lot like the United States’ demand for warehouse capacity was finally cooling. Now, in the midst of significant economic upheavals and supply chain reboots, demand is surging once again.


Making the most of any warehouse space, and ensuring one’s operations are as efficient, agile and profitable, increasingly means turning to automation. The following points should help make the case for warehouse automation. We’ll close things out with a look at some of the most useful and advantageous warehouse automation technologies already on the market today.

Advantages of Automation in Warehousing

Warehouse automation represents a bright new era of high productivity and profitability in the supply chain. These are some of the top advantages.

1. Cost Savings

According to the U.S. Bureau of Labor Statistics, the cost of labor for the average warehouse stands at $3.7 million per year. The BLS does not include the cost of health insurance, paid leave and other benefits.

Automating simple, repetitive tasks may deliver considerable savings from repurposed labor alone. Other savings come from higher accuracy, faster turnover, and more efficient and harmonious operations overall.

2. New Business Models

As mentioned, warehouse demand is heating up again — and warehouse automation can help meet that demand. Part of the opportunity lies in new business models, such as on-demand warehousing. Real-time warehouse monitoring and inventory tracking help uncover where there’s untapped warehouse space available, and then connects providers with those who need the space.

It’s a little like other sharing economy models, such as ride-sharing or renting one’s spare bedroom or couch by the night. It could make life a lot easier for warehouse owners as well as companies that need access to warehouse facilities and services and don’t want to break ground on their own infrastructure.

3. Data Mobility and Real-Time Tracking

Warehouse automation is elegant because it provides autonomy for basic functions alongside real-time data-gathering for those same processes. Documenting repetitive, labor-intensive tasks by hand is basically a non-starter.

Meanwhile, smart conveyor belts, cobots, robotic arms, automated pallet trucks and other assets can collect reams of data useful for decision-makers. This data includes equipment condition, information on operational efficiency and maintenance cycles, as well as information on each process in the warehouse, such as cycle times, defect rates and bottlenecks.

Which Technologies Are Leading Warehouse Automation?

There are lots of technologies for automated warehouses already available today, with many more in development. The coming years will see these and other technologies become even more capable and accessible.

1. Cloud and Edge Computing

Industry 4.0 relies on data mobility and interoperability to deliver results. Modern warehouse management systems use cloud and edge computing to share data between stakeholders and partners, analyze information gathered from equipment and workflows and to automate order and invoice generation, picking instructions and inventory reordering.

The cloud represents data mobility between processes and logistics partners. Further refining that model, edge computing pushes the analytical functions to the periphery of the network so that warehousing companies can keep their bandwidth requirements to a minimum.

The result is a warehouse that’s buzzing with useful data, but where most of the data gets processed automatically and as close to the source as possible.

2. Automated Guided Vehicles

Also known as AGVs, these are autonomous vehicles — oftentimes little more than a pallet truck — that move materials or shipments from one workstation to another. They’re ideal for limiting foot traffic in a facility and keeping employees engaged with higher-order functions, like packing and stowing, instead of transporting materials.

Variables and individual circumstances may vary from facility to facility, but it’s not impossible to get a sense of the potential ROI for AGVs. After a two-year break-even period, a facility with 15 forklift operators could save $900,000 per year on labor costs alone, on top of the productivity and safety benefits.

Machine vision and pathfinding technologies have come a long way in a short time, making these and other types of collaborative robots very safe to deploy alongside human workers. For best results, however, automated traffic should stay separated from people. Use markers and physical barriers just as you would any other type of vehicle traffic.

3. RFID Tags

As RFID tags have become more affordable in recent years, more warehouses have adopted them as a replacement for bar codes and printed identifiers. The advantages can be significant. The first is that RFID tags can be embedded in packaging, making them less susceptible to tampering, peeling, smudging or other types of damage that could render a sticker barcode unreadable.

With RFID tags identifying totes, pallets, shipping cartons or even individual merchandise, employees don’t need to handle and scan each piece. Instead, wide-area RFID allows warehouses to scan even large shipments at once as they pass by on conveyors, thereby providing efficiency and real-time inventory visibility.

Automating inventory control and recordkeeping using RFID tags delivers defect control and cost savings with one solution. Some case studies show a 96% drop in the time required for cycle counts, and others have shown up to 90% improvements in receiving process times.

4. Collaborative Robots

Collaborative robots, or cobots, are some of the most exciting developments in warehouse automation. Some predictions say the cobot market will reach $5.6 billion by 2027, representing about one-third of sales within the robotics industry.

Cobots grow ever more sophisticated no matter the work environment, but this is especially the case in warehouses. Analysts expect cobots to transform how many supply chain functions are performed, greatly improve fulfillment cycle times across retail, and achieve widespread adoption by the mid-2020s.

Today’s cobots carry out simple to advanced ASRS (automated storage and retrieval) functions, including a range of autonomous picking and stowing tasks. Many carry out these functions with an on-board electric or pneumatic arm.

One of the only downsides to cobots is that typical wood-and-nail pallets can give them trouble. Adopting mobile cobots is an opportunity to upgrade to engineered plastic pallets and totes, which can extend the life of ASRS equipment and other automated equipment.

5. Drones

Even drones are beginning to put in an appearance in warehouses and other material staging areas. One application involves using drones to detect available slots in racking and library space. Combining these drones — and the warehouse’s pallets or totes — with RFID tags would also help the drone recognize whether the right item is stowed there, simply at a “glance.”

Some of the best potential returns on investment seem to come from port and ship applications, where there might be acres of inventory to monitor, cycle count or spot-check while in transit or at rest.

Other warehouse-based applications for drones may involve the short-range transportation of merchandise or small tools from one part of the facility to another. Unlocking the potential of unutilized airspace would reduce or potentially even eliminate warehouse foot traffic. Drones could also empower networks to take a more active role in last-mile delivery, and change the way goods get cross-shipped between facilities.

Drone-based staff management applications are more controversial, but are worth mentioning in the present global circumstances. These include drones that can screen for signs of illness and unsafe behaviors or enforce social distancing guidelines.

Warehouses of the Future

Automation moves us closer to the smart warehouse — a facility that can go ever longer without human intervention even while meeting customer demands and shipping deadlines. Industry 4.0 is a broad and exciting moment in industrial history, and automation plays a huge role in it. How will your warehouse put these technologies to profitable use?