Automation: The Driving Force Behind Warehouse Management Growth

A growing retail and ecommerce business can turn an efficient process into a multi-step nightmare with inaccurate purchasing, order fulfillment and returns processes. Modern warehouses need to be responsive, flexible, resilient and reliable to accommodate constant change and evolve with it. Hence the undeniable need for robust warehouse management technologies that are future-focused and effortlessly scalable.

Automation Increases Warehouse Productivity and Accuracy

The ever-changing retail market has made automation a necessity. However, this doesn’t mean introducing robotics into warehouse operations and completely cutting down the labor force. The goal is to build connected, streamlined operations that allow more work to be done in a shorter amount of time.

According to recent research, the global warehouse automation market is estimated to grow at a CAGR of 14%, reaching $30 billion by 2026. Warehouse automation begins with digitization, introducing leaner, agile, tech-focused operations to take the front seat and drive automation into fifth gear to fuel further growth. 

A One-Size-Fits-All Strategy Won’t Work

Every business has its own set of challenges and methods of addressing them. It all depends on multiple factors like the size of the warehouse, the quantity of inventory and the number of orders fulfilled. Based on these factors, warehouse technologies can be divided into three levels of automation:


  • System Automation;
  • Mechanized Automation; and
  • Sophisticated Automation.

System Automation

Best suited for small-scale businesses, system automation is used for rapid, data-driven decision-making to manage basic processes efficiently, alongside quality inspection. It includes technologies like:

  • Plug-and-play integrations: Easily synchronizable with multiple devices, e.g. barcode scanners, thermal printers, scanners, pick-to-light devices and dimension analyzers, as well as with Enterprise Resource Planning systems (ERPs) through simple API integrations, to automate a wide range of processes and build a connected network;
  • RFID tags and barcodes: Store massive quantities of data, enhance connectivity and data-sharing capabilities to open doors to smarter warehouses. These tools helps track inventory via automated data logging and collation, offering access to real-time data to identify operational inefficiencies and repetitive manual processes and helping to locate products quickly; 
  • Omnichannel warehouses: Serve all sales channels seamlessly with technology and systems that handle inventory across a common stock pool. They offer the greatest flexibility and visibility in the network and reduce systemwide inventory carrying costs; and
  • Business intelligence and predictive analytics: Analyze large volumes of data quickly to extract useful insights. Business intelligence produces consolidated reports and real-time dashboards based on warehouse operations. Predictive analytics help forecast warehouse performance using historical and current data within a certain level of tolerance.

Mechanized Automation

Best suited for mid- and enterprise-level companies, mechanized automation involves automating both logic and good movements. This is achieved through:

  • Conveyor belts: Instead of having workers move around lengthy aisles looking for picks (person-to-goods model), automated systems ease work by transporting goods to the worker (goods-to-person model);
  • Robots: Warehouses are filled with repeatable, process-oriented and error-prone processes. Robots take over to effectively handle repetitive tasks such as sorting, picking, packaging, batching, transportation, fulfillment, security and inspection. They improve consistency, employee engagement and retention rates as the repetitive and dull tasks are transferred to the robots, thus making warehouse personnel feel more fulfilled and efficient while tackling skilled operational roles; and
  • Cobots: Collaborative Robots are designed for safety and better productivity, with multiple sensors to assist rather than replace workers to complete tasks efficiently. They are becoming omnipresent in the supply chain due to their affordability and the ease of programming. They are also easy to integrate, lightweight and flexible — ideal for usage in warehouses with space constraints.

Sophisticated Automation

Designed for large warehouses, this level of automation involves using highly automated technologies to eliminate manual movements, streamline order-picking processes and handle complex decision-making logic. Technologies employed to achieve this include:

  • Automated Guided Vehicles (AGVs): These are portable machines that can navigate through floor stickers, radio waves, vision cameras, wires, magnets or lasers, and are often used to transport goods around the warehouse. Additionally, GPS-equipped AGVs allow operators to direct with the utmost precision by marking the exact location where it needs to pick up or drop cargo;
  • The Internet of Things (IoT): One of the key technologies driving current warehouse automation trends, IoT allows you to connect, monitor and synchronize warehouse AGVs, AMRs, drones, beacons, pallets, equipment, inventory and even workers in real time, enabling different devices and systems to scan, store, share and retrieve data from the cloud; and
  • Drones: Leveraging drones for shipping and delivery fulfillment came to attention when Amazon revealed their ‘Octocopter’ in 2013. Currently, drones are used for indoor warehouse applications, and the three most promising areas of indoor drone use cases in warehouses are inventory management such as audits, cycle counting, item searches, buffer stock maintenance and stock taking; intra-logistics, the process of moving items from factory workshops to warehouses; and inspection and surveillance.

Warehouse Automation in Action

Warehouses have become their own ecosystems within the supply chain that serves our modern world. They are now sophisticated waystations equipped with technological advancements to address ever-increasing ecommerce customer demands.

While newer automation systems and digital simulation allow warehouses to be more efficient, productive, cost-effective and sustainable, the advice remains — start small and start early. Automated warehouses are the only approach that can create the agility to stay in the race longer — especially in these times of uncertainty.

Anshuman Agarwal is a seasoned leader in the ecommerce and retail technology industry. With over 20 years of experience as a thought leader, advisor and mentor, Agarwal brings a unique perspective across multiple segments, including merchandise planning, distribution, warehousing, decision analysis, risk analysis and strategy development. In the initial years of his career, Agarwal worked with marquee companies such Boston Consulting Group (BCG), ITC, Myntra, Inductis and many more. He is the Co-founder of Increff and is recognized as the go-to source for operations, consulting and business strategy.

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