What Is Warehouse Automation? Examples, Benefits, & More

Warehouse automation leverages robotic systems, cloud-based software, and automated warehouse tools to improve process efficiency inside a warehouse.

These solutions help streamline tasks like warehouse receiving and order fulfillment, saving time and money with faster, more effective workflows.

During my career as a warehouse manager, I’ve seen and used all types of automation systems, from simple barcode-scanning systems to industry-leading AI-powered warehouse robots.

In this guide, I’ll explain warehouse automation, how it works, and how to automate your warehouse with minimal risk.

What is warehouse automation?

An automated warehouse allows businesses to improve the speed and accuracy of manual processes. 

As a result, warehouse automation directly impacts your bottom line.

The time and money saved with more efficient warehouse operations means the company runs more profitably on the whole—facilitating faster growth and more capacity to improve sales.

Warehouse automation examples

I’ve worked in a variety of warehouse environments across numerous sectors, from the large and complex to the small and simple. Warehouse automation can look very different depending on how a company operates and its overarching business strategy.

Icebox, an ice distributor I used to work for, relied on delivery management software to track the status of ice and ice sculpture deliveries.

D-Wave, a manufacturer of quantum computers, used specialized manufacturing inventory software, an ERP system, barcode scanners, and electric pallet jacks to automate numerous stock management tasks.

And that’s not all.

I’ve encountered dozens of unique warehouse automation systems in my career:

As you can see, warehouse automation is a broad term—the type of automation that benefits one business may be too intensive or too simplistic for others.

5 benefits of warehouse automation

10–25% of the warehousing industry is understaffed—with labor gaps reaching up to 34% for some roles. This sector-wide labor shortage is driving more firms to seek automated alternatives.

And it’s not hard to see why—warehouse automation offers many advantages for businesses:

• Increased warehouse efficiency.
  Automation reduces the time it takes to perform repetitive tasks, delivering higher efficiency levels across the business.
• Optimized warehouse storage utilization.
  Some systems can facilitate optimal usage of storage locations and reduce inventory carrying costs.
• Better order fulfillment accuracy.
  Automated systems are often more reliable than manual order-picking processes as they minimize the risk of human error.
• Improved warehouse safety.
  Automation can also be used to improve the safety of your warehouse—some solutions, for example, can remove the need for staff to handle hazardous goods or manually move heavy loads. 
• Reduced warehousing costs.
  By increasing the productivity of your warehouse, automated systems will help lower overall operating costs with more efficient processes and fewer errors.

Note that warehouse automation benefits some business models more than others. Companies managing bulky or heavy products, for example, may find warehouse robotics less helpful than those handling smaller or lighter inventory items.

4 types of warehouse automation

The four main types of warehouse automation are:

Warehouse automation varies from basic hardware to complicated networks of tools and digital systems. No two businesses require the same degree of automation to operate at maximum efficiency.

Let’s quickly go over the four main categories of automation in warehouses.

Basic automation

Basic automation refers to simple solutions that can be found in many organizations. Common examples you might’ve seen or heard of include conveyor belts, forklifts, and barcode scanners.

System automation

Also known as software-based automation, warehouse system automation uses digital systems to streamline warehouse record-keeping and improve the visibility of ongoing activities.

Mechanized automation

Mechanized automation involves the use of robotics, such as automated storage and retrieval systems (ASRS) and automatic guided vehicles (AGVs), to accelerate and automate the movement of goods around a warehouse.

Advanced automation

Advanced automation synchronizes multiple warehouse automation systems to establish a holistic, interconnected network of technologies. The synergy achieved by integrating different tools can improve the efficiency gains each solution delivers.

Warehouse automation solutions and technology

In my time as a warehouse manager, I learned that there are a near-infinite number of ways to improve warehouse efficiency using automated systems. Below are some examples of the broad selection of warehouse automation solutions currently available.

Warehouse automation robots

Warehouse automation robotics, or warehouse robots, are unmanned machines designed to perform physical warehousing tasks normally handled by human workers.

Goods-to-person (GTP) robots often spring to mind when somebody mentions warehouse automation. These are automated systems that deliver inventory to humans, rather than workers retrieving goods themselves. Most of the examples below qualify as GTP robots.

GTP robots include:

Other types of warehouse automation robots:

It’s worth noting that warehouse robots can be unsuitable for some businesses, such as companies with products with high variance in size and weight. 

Automated systems work best when they follow repeatable patterns and require minimal human intervention. For companies with simple inventories, warehouse robots can make the workplace safer, fulfill orders faster, and compensate for the warehousing industry labor shortages I mentioned earlier.

Warehouse automation software

Warehouse automation software automates critical tasks such as inventory management, data entry, purchasing, and fulfillment, improving productivity and efficiency while reducing the risk of human error.

Let’s look at some common types of warehouse automation software:

• Warehouse management systems (WMS).
  These help you optimize tasks like labor management and storage utilization to improve the efficiency of warehouse operations.
• Inventory management software.
  These systems make it easier to optimize stock levels to meet demand, streamline inventory purchasing, and track and manage inventory as it moves through the business.
• Order management software (OMS).
  An OMS tool helps you improve the speed and accuracy of your order fulfillment processes, often also synchronizing order management between multiple sales channels and inventory locations.
• Enterprise resource planning (ERP) software.
  This refers to comprehensive business management solutions, which can include modules for warehousing, inventory management, and order management—but often feature additional functionality that supports HR, finance, and customer relationship management.

Integrating warehouse software with other automation systems

To make the most of warehouse automation software, you can increase the benefits by integrating your chosen system with other warehouse automation tools, such as order-picking robots and barcode scanners.

This will enable key information to be instantly communicated between different systems, further minimizing the need for human intervention and, subsequently, the risk of human error.

Warehouse automation tools

Warehouse automation tools are the physical hardware that supports an automated warehouse.

Popular examples include:

When implemented, these tools often become an integral part of a warehouse worker’s daily responsibilities. They facilitate faster, more accurate workflows and can typically be integrated with other warehouse automation solutions for an end-to-end boost in warehouse productivity.

How to automate warehouse processes

To avoid shiny-object syndrome and wasting money on the latest trendy warehouse tech, I recommend taking an intentional approach to automating your warehouse operations.

Follow these steps to automate your warehouse without taking on too much risk:

Let’s take a closer look.

The first step in automating a warehouse is to identify your needs. This can be done by conducting a thorough analysis of your warehousing processes.

Start tracking internal performance metrics such as:

Research how your benchmarks compare to similar businesses of comparable size.

One way to do this is to go directly to the source. Speak to peers in your industry, share performance data, and chat about how you each achieved your results.

Another option is to read industry reports. You can do this by searching phrases like “[your industry] + warehouse report” or “warehouse efficiency benchmarks”. Use the ‘News’ tab in Google to filter out unhelpful blog articles and marketing collateral.

Work out which processes have the biggest impact on cost and productivity, and how your existing tactics affect their performance.

Once you know which warehousing workflows slow you down and dig into your profits, make a list of the areas that make the most business sense to automate.

Say your business picks 50% fewer orders per day than one of your competitors. The lag in your order-picking process also means you’re taking longer to receive inward goods, which in turn limits how quickly you’re able to get backorders out to customers.

Problems like these can hurt your company on multiple levels, from customer loyalty to revenue and staff satisfaction. Solving them with automation, therefore, makes everything perform better.

Next, assign solutions or product features to each of the problems on your list.

Investigate how specific processes can be improved, the types of warehouse automation that can improve them, and how much these solutions cost. From there, you’ll be able to work out exactly what you need that’s within your budget.

Now you know what you’re looking for, create a shortlist of warehouse automation vendors offering the solution you require.

To narrow down your shortlist of suppliers:

Once you’ve settled on a product and supplier, don’t skip the next step!

Preparation is perhaps the most important part of best-practice warehouse automation. You need to understand exactly how much implementing a new system will cost and whether it will affect your operations.

Will you need to ‘freeze’ the business while installing a new solution?

Do you need to hire extra staff to help catalog your inventory?

Is there a lengthy training process required before you can use your new tech?

These are the types of questions you need to ask. Use the answers to inform a detailed implementation plan to reduce risk and streamline the set-up process.

The future of warehouse automation: Trends and predictions

New developments in warehouse automation are happening every day. Robots are becoming more autonomous, software features are always improving, and warehousing tools are being designed to increase efficiency and accuracy.

So, what exactly can we expect to see in the future of warehouse automation?

Here are three trends to look out for:

Adoption of autonomous warehouse robots will spike

Investment in the production of autonomous warehousing technologies, including AMRs and AGVs, has already doubled in the last two years. According to The Robot Report, $2.7 billion was raised in a June 2024 funding boom.

This investment growth speaks to pressure felt globally to make warehousing more efficient and more automated to better meet consumer demand.

The warehouse automation sector will grow, with Europe leading the way

The Warehouse Robotics market is expected to reach $16.58 billion by 2032, reflecting a CAGR of 12.67%. Increased automation in logistics is widely believed to be the driving factor, as new warehouse technologies are continually being developed and transformed to more effectively reduce the need for human intervention.

Warehouse automation growth rate will vary across geographies

A mid-year analysis by Interact Analysis revealed that revenue forecasts across the warehouse automation industry appear different across different locations and sub-sectors.

Higher consumer spending and improved sentiment towards the economy are likely to push development in the Americas, while the APAC region is expected to slow down due to reduced investments in China.

Eastern Europe is predicted to grow faster than its Western counterpart. This is because Western European manufacturers are offshoring to Eastern Europe, and Chinese producers are expanding their global reach to EMEA.

Need help with your warehousing? Talk to Red Stag Fulfillment

If you’re looking for a faster way to fulfill orders and meet customer demand, but aren’t sure if warehouse automation is the answer, we’re here to help.

Partnering with Red Stag Fulfillment can free up your time to focus on other important areas of the business while giving you peace of mind knowing your warehouse operations are in good hands.

Want to learn more about growing with Red Stag Fulfillment? Reach out to us today.