Factors Driving the Growth of Warehouse Automation

Auto Tech Outlook | Wednesday, June 28, 2023

Warehouse automation is the key to a full spectrum of warehousing needs and challenges be it automating cumbersome, labour-intensive tasks or improving productivity and reducing human error.

FREMONT, CA: According to projections, the market for warehouse automation will grow at a CAGR of 14 per cent and reach 30 billion USD in value by 2026. The shift away from brick-and-mortar shopping caused by the retail e-commerce boom is one of the main growth drivers in the warehouse automation sector. Considerable growth in online buying is taking place as a result of rising mobile use and internet usage. By 2025 global online retail sales will reach seven trillion dollars.

Modern fulfilment and shipping methods must be used as a result of these paradigm shifts. While the majority of clients prefer to choose their online suppliers based on their delivery alternatives, others believe that speed is important and are willing to pay more for it. Fast order fulfilment is no longer merely an option. Investing in warehouse automation is necessary to attract and retain customers as the vendors tackle this challenge. Future warehouses will be shaped by automated technologies that can handle small to large individual orders as opposed to bulk transportation methods.

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Warehouse Automation Benefits

Minimise Costs

Warehouse automation decreases warehouse costs by replacing manual labour requirements. The initial costs may strain the budget, but they pay off over time, especially during busy seasons when robots don't require overtime pay. By reducing errors and the expense of floor space, it can lower overall spending.

Optimise Labour

Robots are proficient at a wide range of tasks. However, there are some tasks that humans are better at managing. Modern warehouse automation technologies aim to improve labour productivity and foster a positive workplace culture rather than replace it. Human labour and automation complement each other to create a smooth operation in fully automated warehouses. 

Reduce Errors

The smallest error can accompany substantial costs as accuracy is cardinal in the logistics industry. Automation eliminates human erratum and greatly improves accuracy, often reaching 99.9 per cent for operations like picking.

Improve Safety

Considering a warehouse a dangerous place, workplace injuries can occur. However, employee safety can be improved by automating potentially dangerous operations. Automation technologies also improve workplace safety by lowering traffic in the warehouse.

Boost Productivity

With current demands and same-day shipping trends, automation can boost productivity and efficiency by 25 to 50 per cent. With quicker picking, packaging, transportation, and inventory identification, smart warehouses can improve processes.

Warehouse Automation Technology Trends

• Gamification

Gamification is a cutting-edge strategy for motivating staff. It was first popularised by mobile apps and e-learning solutions recently making its way to the workplace. By 2025, the global gamification market is anticipated to develop at a CAGR of over 27 per cent and reach 19.69 billion USD. It is a new trend in the market with dashboards and programs to execute it. In the near future, it's conceivable that the majority of the world's workforce will be made up of these recent newcomers as workplace engagement shifts to new generations of workers.

• Cloud-based Software

Cloud-based warehouse management systems are more and more popular among logistics organisations because they don't need infrastructure or in-house IT to maintain them.

• Blockchain

Blockchain is a database that stores information in a chain of linked blocks. A block that joins the chain creates a permanent, unchangeable link. It was initially utilised in cryptocurrencies for accessibility and accountability, and it is a new warehousing technology that early adopters are incorporating. By 2028, the global supply chain blockchain market is expected to account for a CAGR of 51.3 per cent.

Implications

The millions of contemporary employees' jobs will have effects, even on a macroeconomic and political level when warehouse automation reaches "lights out" automation.

• It appears that human jobs are still safe considering lights-out automation is yet a decade or two away. The use of warehouse automation will probably increase over the next ten years due to increased demand and a change in the expectations of customers. The growing use of flexible AMR technologies could have an impact on this transformation. On the other hand, there's a chance that overall employment in warehouses will decline in the long term.

• Increased automation will result in higher labour costs, a skills gap, and the need for retraining. There will be a lot of desk jobs. There will be an increase in employment opportunities, mostly in the maintenance and service sectors. New technologies, such as wearable IoT, monitoring, and gamification, may reduce employees' autonomy and increase workloads.

Only a small percentage of warehouses are automated, even with falling adoption costs. The industry has a natural tendency to be cautious and "wait and see" when it comes to adopting new technologies because of its poor margins. Despite the numerous advantages and innovations available, hurdles including transition planning, implementation difficulties, prices, and maintenance frequency prevent many businesses from progressing. Before making a decision, businesses intending to implement automation should think about their desired goals, potential employee impacts, training needs, and maintenance expenses.

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