Warehouse Labor & Automation: Creating Synergy for Success

Every organization is under enormous pressure to increase warehouse productivity and improve efficiency in today’s labor-constrained environment. The solution many companies are looking toward? Warehouse automation.

The global market for warehouse automation is expected to grow from $26.5 billion in 2024 to $115.8 billon by 2034, representing an annual growth rate of 15.9%. This high level of investment makes good business sense. Blue Yonder has helped many customers achieve cost, efficiency, accuracy and speed gains by embracing automation and robotics in their distribution centers (DC).

However, not all warehouse automation projects achieve their desired outcomes. While automation can increase efficiency and reduce variable costs, a certain level of task volume and uniformity is typically necessary to obtain the benefits.

One solution is the range of new flexible automation that can benefit the average enterprise that has more varied tasks and work volumes. Flexible automation also helps address the challenge of market and demand volatility, which is only increasing. As future warehouse resource requirements become less predictable, flexible automation has become more sought-after for its ability to support a broader range of needs, at lower volumes and a lower level of capital investment.

In specifying and installing flexible DC automation, however, organizations need to recognize that people are more adaptable than even the most flexible automation system. Even in today’s age of digitalization and robotics, human workers are still ideal for complex processes that require flexibility and adaptability.

At Blue Yonder, we believe the secret to warehouse optimization lies in determining the proper mix and application of automation, labor and technology to achieve the desired performance for each specific warehouse operation. A holistic approach—guided by business objectives, informed by operational assessments and measured by financial impact—maximizes the probability of success for warehouse transformation efforts.

Job one: assess your operations to gain efficiency insights

The first step in optimizing warehouse automation? Blue Yonder recommends a thorough evaluation of people, processes and technology to gain a thorough understanding of your current practices and opportunities for improvement. Companies like DSC Logistics have achieved significant operations improvements and financial benefits by not only establishing efficient manual processes, but leveraging those insights to adopt automation in a strategic, targeted way thereafter.

By taking a process flow perspective, companies can determine how each warehouse activity impacts the cost or performance of complementary tasks within the broader warehouse landscape. This approach uncovers opportunities to better coordinate tasks, sequence activities and implement more effective methods.

An objective assessment can also uncover widespread inefficiencies—such as frequently performed tasks that are not performed optimally, impacting both cost and service. While the impact of discrete, repetitive tasks may appear minimal when viewed in isolation, small improvements across a high volume of daily activities can deliver substantial overall improvements.

Expectations for a reasonable amount of change should also be included in the planning process to assure successful outcomes for a range of likely scenarios. A transformation project that is optimized for an outcome that doesn’t occur is clearly a suboptimal outcome in itself.