Achieving SLAs with Material Handling Automation

Corey Wooten | 9 April 2025

Your warehouse is running smoothly until an unexpected spike in orders disrupts fulfillment. A key shipment misses its deadline, triggering customer frustration, refunds, and cancellations. The delay escalates into a chain reaction of operational issues, leading to financial penalties, lost revenue, and reputational damage. Warehouse staff scramble to recover lost time, but the ripple effect reaches customer service teams, supply chain planners, and even corporate leadership. What should have been a routine fulfillment process turns into a costly and disruptive challenge.

Service level agreements, or SLAs, define the expected performance standards in warehouse fulfillment, covering order processing time, inventory accuracy, shipping deadlines, and more. Consistently meeting them is critical for customer satisfaction and operational efficiency.

Material handling automation is the bridge between operational chaos and streamlined efficiency. When fulfillment demands surge, automation ensures warehouses can adapt without missing a beat. Warehouse execution systems (WES), robotic picking, sortation systems, and automated storage solutions work together to reduce errors, speed up processing, and provide the reliability needed to meet SLAs confidently.

Understanding the Role of SLAs in Warehouse Fulfillment

SLAs are not just guidelines but essential performance benchmarks that influence every distribution aspect. SLAs dictate how efficiently warehouses fulfill orders, maintain stock accuracy, and meet customer delivery expectations. When managed effectively, they drive operational improvements, streamline workflows, and create a measurable standard of success. But when they are missed, they expose inefficiencies, increase costs, and put customer relationships at risk.

SLAs set clear expectations for warehouse performance. Key components include:

• Order processing time: How quickly an order moves from receipt to shipment.
• Inventory accuracy: The reliability of stock levels in the system.
• Shipping deadlines: The ability to meet delivery promises.
• Return processing time: How quickly returned items are restocked or resolved.
• Order fulfillment rate: Percentage of orders completed on time.
• Pick accuracy: The rate of correctly selected items.
• Shrinkage rate: Loss due to damage or discrepancies.
• Customer service response time: How quickly order-related inquiries are handled.

The True Cost of Missing SLAs

More than performance metrics, SLAs serve as a crucial framework for maintaining operational efficiency and meeting customer expectations. Meeting SLAs ensures a smooth, predictable workflow that keeps customers satisfied and business partners confident. On the other hand, missing them can lead to cascading failures that impact fulfillment speed, profitability, and long-term growth. A well-run warehouse depends on efficient product movement, but it also requires a strategy that builds reliability, fosters trust, and positions the business for long-term success.

Customer Impact
Late deliveries, incorrect orders, and stockouts create frustration. A single missed delivery window can push a customer to shop elsewhere. Retailers with strict vendor scorecards may even penalize suppliers for consistent SLA failures, leading to lost contracts.

Financial Impact
Penalty fees, increased customer service costs, and lost revenue result from missed SLAs. More support tickets and returns require more staff time. Repeated failures drive customers away and create unexpected costs that cut profit margins.

Operational Impact
Delays disrupt workflows and create stress for warehouse teams. Inaccurate forecasting results in overstocking or stockouts, further impacting fulfillment. Repeated misses erode trust in a company’s ability to deliver and make future expansion efforts more difficult.

How Material Handling Automation Helps Achieve SLAs

As demand fluctuates and order volumes grow, warehouses need solutions that keep operations moving without delays or errors. Material handling automation transforms fulfillment by increasing speed, improving accuracy, and ensuring reliability, giving businesses the agility to meet SLAs and customer expectations.

Warehouse Execution Systems (WES) & Software Integration
A WES tracks inventory in real-time, prioritizes orders, and ensures accurate stock levels. AI-driven forecasting prevents shortages and overstocking. Integrated data platforms allow for real-time SLA monitoring and automated corrective actions.

Automated Picking & Packing Solutions
Robotic picking and goods-to-person systems increase speed and accuracy. These solutions reduce errors, optimize labor efficiency, and help warehouses meet fulfillment deadlines during peak demand.

Sortation & Conveyor Systems
Automated sortation moves orders efficiently through fulfillment. High-speed conveyor networks and intelligent sortation systems ensure faster, more reliable deliveries while reducing manual labor dependency.

Automated Storage & Retrieval Systems (AS/RS)
Maximizing space and improving retrieval times, AS/RS ensures fast, efficient picking to meet order deadlines. These systems enable warehouses to optimize inventory location and minimize travel time for picking teams, allowing them to maintain high throughput while reducing errors.

Predictive Maintenance & System Reliability
Automated systems use predictive maintenance to prevent downtime and minimize disruptions. Reliable uptime ensures orders move through fulfillment without bottlenecks. AI-driven monitoring ensures that issues are identified and resolved before they impact operations.

Real-World Success Stories: Material Handling Automation in Action
Every warehouse has unique challenges, but the core need remains the same—efficiency, accuracy, and reliability. These case studies highlight how leading companies tackled fulfillment challenges with automation, ensuring they met their SLAs while improving overall operations.

Case Study: Dick’s Sporting Goods Enhances Throughput with Automation

The Challenge: Keeping Up with Demand
Dick’s Sporting Goods faced a surge in e-commerce orders, creating bottlenecks in their distribution centers. They needed a solution to enhance efficiency and maintain SLA commitments without significantly increasing labor costs.

The Solution: Automated Sortation & Conveyor Systems
Bastian Solutions implemented high-speed sortation systems and intelligent conveyors to optimize product movement. By automating order routing and fulfillment prioritization, Dick’s was able to streamline processes and reduce manual touchpoints.

The Results:

• 30% increase in throughput capacity
• Faster order processing times
• Greater fulfillment accuracy, reducing SLA penalties

Read the case study.

Strengthening SLA Compliance with Material Handling Automation

Automation ensures distribution centers meet SLAs consistently, even as demand grows. Businesses that invest in material handling solutions gain a competitive edge by improving efficiency, reducing errors, and delivering on customer expectations. By leveraging automation, companies can eliminate bottlenecks, streamline operations, and provide customers with the reliable service they expect.

Connect with a Bastian Solutions engineer to discuss how automation can optimize your warehouse operations and ensure SLA compliance.

Author: Corey Wooten