Five reasons to invest in warehouse automation

In the material handling and logistics sector, automation has been on the rise for years. This trend continues unabated. In this blog, we explain why automation remains a hot topic and why it can be interesting for companies to invest in it.

According to an industry report from Mordor Intelligence the logistics automation market is expected to show a compound annual growth rate (CAGR) of 12.5% over the next five years. This is no surprise, Modern Materials Handling also predicts that 75% of large enterprises will adopt some form of smart intralogistics robotics in their warehouses around 2026.

Here are five reasons why companies want to invest in warehouse automation projects.

1. Future-proofing
Although the initial investment in automation equipment and the cost of transitioning from manual to automated processes can be high, it is important to realize that the key to successful automation lies in the medium- to long-term benefits.

With fluctuating markets and changing consumer needs, automation provides businesses with resilience, flexibility and scalability. It allows them to respond quickly to changes in demand.

2. Manage all peaks
The huge increase in e-commerce volumes shows that many companies need more flexible systems to handle peaks in demand.

Whether it is seasonal peaks or an increase due to unforeseen external factors, automation allows for exponential increases in throughput with limited increases in personnel. In the past, to meet increased demand, companies had to create additional work crews or work time extensions and hire additional staff or pay overtime to do so. Automated machines can run for longer periods, which helps keep production going when demand is high.

3. Guarantee good customer service and tight delivery deadlines
Another important factor in implementing automation is the importance of equipment uptime and reliability. The growth of e-commerce in recent years has shown that consumers have high expectations of service. Extensive automation allows distribution centers to pick, pack and ship orders faster than ever before. This allows companies to meet increasing consumer demands.

4. Save costs
With too few available warehouse personnel and rising salaries affecting many companies worldwide, automation can help keep costs down in the long run.

If mistakes are made, the cost per product increases anyway, while reduced customer satisfaction can affect repeat purchases.

5. Lower Total Cost of Ownership (TCO).
As mentioned earlier, there are several cost benefits to automation, from fewer personnel to greater accuracy. Automated warehouses can also save energy, since buildings with machines instead of people require less heating or lighting. These savings lower the TCO of automation equipment and shorten the time it takes to recoup the investment.

Partner with DLL for affordable intralogistics automation
From large-scale automation projects to partial automation, DLL's Intralogistics team creates flexible leasing solutions that allow companies to achieve their goals.

Get in touch to discuss your automation strategy and find out how DLL can help you.