In an industry where every second counts and a mistake worth a fraction of a percent can cost millions, automation is no longer a luxury but a necessity. What technologies currently dominate and why is investing in automation not only a time saver, but above all a wise decision and a strategic advantage?
Why does logistics rely on automation? Staff shortages, time pressure, and safety
A decade ago, automation was the domain of global giants such as Zalando, Amazon, and DHL. Today, it is becoming the standard even in medium-sized distribution centers. This is due to several important factors that are currently shaping the market. One of them is staff shortages and rising labor costs. The logistics industry is facing the largest labor shortage in its history. According to market reports, the staffing gap in the transport and logistics sector in Europe is constantly growing, and the turnover of warehouse workers in some regions reaches several dozen percent per year. Automation, such as autonomous forklifts and sorting systems, allows for operational continuity even with limited human resources.
Another important factor is time pressure in the age of e-commerce. The “Same Day Delivery” model forces warehouses to operate at almost superhuman efficiency. Humans have natural limitations in terms of speed and endurance, while automated storage and retrieval systems (AS/RS) can operate 24/7 and in harsh conditions (in the dark and at low temperatures) without any loss of efficiency. Automating the order picking process can reduce the time it takes to handle a single package by as much as 60-70%.
The third factor driving change in the logistics market is undoubtedly the issue of error elimination and safety. The human factor is the most common cause of errors in the picking process. Incorrectly shipped goods not only incur the cost of return, but above all, a loss of customer trust. Machines equipped with code scanners and vision sensors make mistakes statistically less than once in several thousand operations. In addition, the takeover of the heaviest and most dangerous work by robots significantly reduces the number of accidents in the warehouse.
Read more: Blind automation? A warehouse without a system is just an expensive playground
The most important technologies, or “must-haves” in an automated warehouse
Modern warehouse automation is no longer just about conveyor belts. It is an entire ecosystem of intelligent machines that work together. The logistics sector is currently undergoing a profound transformation towards “Logistics 4.0,” in which several solutions are of the utmost importance. Among them are Autonomous Mobile Robots (AMR). Unlike older AGVs (which move along designated lines), AMRs use LiDAR sensors and real-time space mapping. This allows them to freely avoid obstacles and people. DHL, one of the pioneers in robotics implementation, points out that the use of robots to assist in order picking increases employee productivity by more than 100% while reducing their workload.
Automation and robotics help us make operational processes more flexible, ergonomic, and attractive to our employees by replacing monotonous, repetitive, and particularly tedious tasks. The goal is not to replace employees, but to entrust them with more attractive and interesting tasks, says Markus Voss, director at DHL.
Another important solution promoting transformation in logistics is the so-called Goods-to-Person (GTP) systems. This is a revolution in the way goods are stored. Instead of an employee walking between the shelves, the shelves or specific containers “come” to the packing station.
Systems such as AutoStore or dense storage systems based on shuttle bots allow, among other things, for space savings, i.e., an increase in storage density by 400% compared to traditional shelves.
In this case, speed also matters. One operator at a GTP station can handle as many orders as 4-5 employees in a traditional model.
Artificial Intelligence and Machine Learning also help to streamline processes in the logistics industry. Modern warehouse management systems, or WMS for short, use AI for so-called slotting, i.e., the intelligent placement of goods. Algorithms analyze historical sales data and predict which products will be popular in the near future, instructing machines to move them closer to the shipping area. According to the Supply Chain Brain portal, AI-based warehouse optimization can reduce operating costs by 15-20%.
Another important element is vision systems and automated sorting. Thanks to advanced cameras and deep learning, vision systems can recognize damage to packages, read illegible labels, and even verify the correctness of carton packing without human intervention. This is important in cross-docking processes, where rapid reloading of goods is essential.
Read more: The role of distribution centres and warehouses in the supply chain
Benefits versus challenges: the current balance of automation
Investment in warehouse automation is no longer seen solely through the prism of replacing human labor. According to a Gartner report on supply chain trends for 2024, organizations are increasingly looking for “resilience” to sudden market changes.
Among the benefits, highly flexible scalability stands out. Modern shuttle systems and mobile robots allow companies to handle sales peaks, e.g., during Black Friday or Christmas, without the need to rapidly increase employment. These systems are modular and can be expanded in a matter of weeks, not years.
In addition, modern “lights-out” automated warehouses can operate without lighting or heating. Automation can reduce energy consumption in distribution centers by up to 25-30%, helping companies meet new EU ESG reporting standards. And by integrating machines with cloud systems, managers have access to real-time data. The system itself informs that a part in the robot needs to be replaced before a failure and downtime occur.
One of the main challenges in the logistics industry is the high barrier to entry (CAPEX) for new technologies and solutions. Despite falling technology prices, implementing full automation is still a very large expense. This depends, of course, on the scale at which a given company operates. However, the RaaS (Robotics as a Service) model is becoming increasingly popular, allowing companies to rent robots instead of buying them, which changes expenses from investment to operating expenses.
Cybersecurity is a major challenge for companies investing in modern technologies to streamline warehouse processes. The more a warehouse is connected to the network, the more vulnerable it becomes to hacker attacks. Protecting the IoT (Internet of Things) infrastructure in logistics is currently the number one priority for IT departments in large logistics centers.
The skills gap is also becoming a problem. The challenge is no longer a lack of employees in general, but a lack of employees with the right qualifications. Companies need to invest in upskilling, training existing warehouse staff to operate and maintain robotic systems.
Read more: Warehouse management with voice picking system
The future of logistics belongs to ecosystems. The train labeled “automation” has not yet departed
Nowadays, automation is no longer a single project, but a continuous process. The companies that will succeed are those that can combine technology with operational flexibility. What can we expect in the near future?
A new trend is to design systems so that machines learn from humans, not the other way around. In turn, the development of exoskeletons to assist workers will become standard in places where full robotization is not yet possible.
We are slowly getting used to the idea of so-called autonomous fleets, in which automated warehouses are fully integrated with autonomous delivery vehicles. This will create an uninterrupted supply chain, in which a package will only be touched by a human being when it is picked up by the customer.
The saying “the last one turns off the lights” will no longer apply in the world of logistics. The era of dark warehouses is coming. The pursuit of full autonomy will allow for the creation of facilities adapted exclusively for machines, without the need for lighting, air conditioning, or wide aisles, which greatly reduces the carbon footprint of logistics and cuts costs.
Over the next few years, we will move from the question “should we automate” to the question “how quickly can we do it.” By 2028, more than 75% of logistics companies will be using some form of intelligent intralogistics robots. Companies that do not lay the groundwork for this technology today will soon find that their operating costs make it impossible for them to compete on price, said Dwight Klappich, vice president of supply chain technology at Gartner.
In short, automation in logistics is not a “song of the future,” but a real struggle for profit and staying on top here and now. Companies that ignore this trend may be displaced by faster and cheaper competition. In the end, a company that does not jump on the bandwagon called “automation in logistics” will be left on the platform with a negative balance sheet for the last year. On the bright side, it is not too late yet.
