Automation vs manual workforce

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Automation vs. manual workforce: What’s the cost? 

  • Automation vs manual workforce
1 minute read

Up to 70% of a company’s costs are related to labor. Between paychecks, benefits, recruiting, and training, maintaining a healthy workforce requires major investments. Investments which continue to increase. 

The rising costs have led many supply chain businesses to look into how they can support their workforce in a scalable way. And the answer for many companies is AI and automation. 

AI and automation are built to make workers’ daily lives smoother, more efficient and full of more meaningful work. However, implementing AI does not come cheap. 

Beyond the price of technology, companies need to navigate the challenges brought on by the new workplace, including employee reticence. In the United States, this reticence has led to threats of strikes—an outcome all supply chain executives want to avoid. 

The delicate balance of doing what the future requires of the supply chain and what’s best for the workforce today means most companies hesitate to make any big changes. The assumption is that inaction won’t cost money. But even if the costs aren’t showing up on a single line item, companies can still incur them. 

To help identify the hidden costs of labor and the potential savings of a hybrid workforce, here’s a few risks, and more importantly, rewards to consider. 
 

What are supply chain leaders saying about technology and AI?

We spoke to 671 senior supply chain leaders across Europe and North America to uncover their hopes, fears, current operations, future priorities, and visions for supply chain evolution over the next five years. Find out what they had to say in our latest ebook. 

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Costs to look out for

1. Cost to close the skills gap

67% of companies said that the skills gap in their workforce is a barrier to adopting AI. But as AI continues to evolve, that gap will only widen. The costs for not moving to train your team now will only be compounded. 
Don’t wait to begin training your workforce on the technology of the future. Get them up to speed as you evaluate the AI solutions your company will invest in so the transition is more efficient and less costly.

2. Cost of what’s always been done

Workers, particularly in warehouses, are up against strict schedules and constant changes. To ensure they meet their timelines, workers will often fix issues the way things have always been done, regardless of whether it is the most efficient decision. Disruptions are not only unexpected, but their very nature continues to change (from pandemics to tariffs). 
The cost of not having structured plans for a given scenario, including delays in production and transportation, is half-full trucks, rescheduled manufacturing and excess spend. Create a plan and standard operating procedures for teams to follow so they don’t default to what’s always been done.

3. Cost of competition

Quality workers are difficult to find. In 2025, 76% of supply chains reported being affected by workforce shortages. Without proper training, advancement opportunities and benefits, no company will be able to compete in recruiting the top candidates. 

Companies will face the negative impact in their existing workforce, plus the growth opportunities in the future, without a strong pipeline of top talent. 

Like closing the skills gap, closing the gap between what warehouse workers want from their career and what your company can offer will help build a more effective and profitable supply chain. 
 

Savings with a hybrid workforce

1. Use more accurate forecasting

Although 83% of companies use automation in their workforce, only 36% use generative AI as a tool for making their supply chain more efficient. What may have been considered a hybrid workforce in earlier decades is now the standard. To stay agile in today’s market, supply chains need to employ generative AI tools as a way of creating a hybrid workforce. 
That means manual labor and automation, of course. But it also means leveraging generative AI to build reports, forecast and make decisions faster. In terms of making an impact to working conditions in warehouses and transportation teams, these updates can make a world of difference in efficiency and overall job satisfaction. 

2. Build clear plans and expectations

Making a plan isn’t enough, especially when anything can change from one moment to the next. Supply chains need options for how to pivot based on the challenges of any given day. AI-powered solutions offer real-time insights that can help a workforce make the most efficient and cost-conscious decisions in the moment. 
Avoid losing money and time reacting to changes that could have been incorporated into planning if you had access to all your company’s data. Lowering costs is much easier when a workforce knows how to be proactive.

3. Ensure sustainable growth through uncertainty

The biggest cost savings from a hybrid workforce don’t come from cutting down on wages or eliminating positions. In fact, the evolution of the workforce may introduce new positions that require even more employees. The point is to create a resilient supply chain with a strong enough foundation to shift with whatever the global economy throws at it.

Setting up your supply chain to move with the market, rather than buckle under unforeseen pressures, is the only way to ensure sustainable growth of both your workforce and your profit.  
 

Find out how Americold cut labor costs by 10% with Blue Yonder

Americold, the world's largest temperature-controlled warehousing provider, cut labor costs by 10% across 150 locations using Blue Yonder's Warehouse and Labor Management systems. 

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