Warehouse automation is the process of automating inventory movement into, within, and out of a warehouse to customers with as little human assistance as possible. When implemented, it helps a business eliminate labor-intensive duties that involve repetitive physical work and manual data entry and analysis.

Contrary to what you may think, warehouse automation does not necessarily require physical or robotic automation. In many cases, warehouses use software to automate manual tasks.

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Automation often involves using a warehouse management system (WMS) for data collection and inventory control.

What Is a Warehouse Management System?

A WMS is an application that helps companies manage and control their daily warehouse operations from receipt to delivery. It is a critical component of supply chain management (SCM) and offers real-time visibility into a company’s entire inventory, both in its warehouse and in transit.

Apart from inventory management, a WMS also offers tools for picking and packing processes, resource utilization, analytics, and more.

What Are the Benefits of Using a Warehouse Management System?

Using a WMS offers several benefits, such as:

  • Improves operational efficiency: It automates and streamlines processes from receipt to delivery. It also reduces errors in picking and shipping goods, thus eliminating duplicate and unnecessary work. Finally, it can share data with enterprise resource planning (ERP) and transportation management systems, providing a holistic view that extends beyond the warehouse and helps expedite the movement of goods.
  • Reduces waste and costs: It can prioritize older date-restricted or perishable stocks to minimize waste. It can also help companies determine how to optimize warehouse space for inventory placement and travel path efficiency, resulting in time and financial savings.
  • Provides real-time inventory visibility: It provides real-time inventory insights aided by barcoding, radio frequency identification (RFID) tagging, sensors, or other location tracking methods as it moves into, around, and from your warehouse. This visibility allows companies to create more accurate demand forecasts, run just-in-time inventory strategies, and improve traceability during a recall.
  • Improves labor management: It can help companies forecast labor needs, create schedules, optimize travel time, and assign the right tasks to the right employees based on skill, proximity, and other factors. At times, it can also boost employee morale by creating a more relaxed, organized, and safe environment.
  • Enhances customer and supplier relationships: It allows customers to enjoy improved order fulfillment, faster deliveries, and fewer inaccuracies. That increases their satisfaction and loyalty and improves the company’s brand reputation. A WMS also reduces wait times for suppliers at loading bays and docks, thus improving supplier relations.

What Are the 3 Levels of Warehouse Automation?

Warehouses can be automated on different levels, as described below.

Level #1: Manual Warehouse

Humans perform all tasks in a manual or conventional warehouse. They use forklifts or other equipment, for instance, to transport goods. At this level, warehouse automation only involves controlling employees using a WMS. The software takes over planning, optimizing, and controlling all manual processes. The system can consider truck departure times and plans for upcoming tasks so the correct goods are ready at the right time at the right loading ramp. Employees receive instructions via handheld or vehicle terminals or mobile devices.

Level #2: Partially Automated Warehouse

Only individual work steps are automated in partially automated warehouses to reduce costs and hasten operations. An example would be controlling narrow-aisle stackers, order pickers, and reach trucks via a WMS.

Level #3: Fully Automated Warehouse

A fully automated warehouse no longer requires humans to operate equipment and transport goods. Often, they have racks and stacker cranes or shuttles to store and retrieve pallets, totes, or cartons automatically.

Warehouse Automation Levels

When Should Companies Automate Their Warehouse?

If your answer to these questions is a resounding yes, then it may be time to automate your warehouse:

  • Are you finding it hard to fulfill orders on time?
  • Are you struggling with tracking inventory data and order information errors?
  • Is your order error rate rising due to incorrect goods picking?
  • Are you finding it hard to assign tasks to warehouse staff effectively?
  • Are your inventory cycle counts inaccurate?
  • Do you need to hire more staff to cope with incoming orders?
  • Do you need to hire more staff to handle peak seasons?
  • Does your warehouse lack space?
  • Are your packaging methods resulting in order returns due to damage?
  • Has your overhead cost risen due to repetitive order shipments?
  • Do you find it hard to satisfy customers?

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The future of warehouse automation lies in robotics and integrating artificial intelligence (AI) into warehouses.

Key Takeaways

  • Warehouse automation is the process of automating inventory movement into, within, and out of a warehouse to customers with as little human assistance as possible.
  • Warehouse automation comes in three levels—manual, partial, and full.
  • Companies that find it hard to fulfill orders correctly and on time, lack floor space, and have difficulty tracking inventory can benefit from warehouse automation.

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