Bridging the Labor Gap: Warehouse Automation's Role in Addressing Labor Shortages

Johnathan McRary | 11 October 2023

In today's rapidly evolving global economy, industries are facing a unique challenge: labor shortages. The shortage of skilled and unskilled laborers is being felt across various sectors, with warehousing being no exception. Warehouses serve as the backbone of the supply chain, but the ongoing labor shortage crisis threatens their efficiency and productivity. Thankfully, technology has stepped in to address this challenge with the implementation of warehouse automation. In this blog post, we will explore the labor shortage issue, its causes, and how warehouse automation is revolutionizing the industry, ensuring smooth operations and boosting productivity.

The Labor Shortage Crisis

Before we delve into the role of warehouse automation, it's essential to understand the gravity of the labor shortage crisis. This phenomenon is not limited to one region or industry: it's a global concern.

In the United States, for instance, the Bureau of Labor Statistics reported in 2021 that there were over 10 million job openings, the highest number recorded since December 2000. The reasons for this shortage are multifaceted and include factors such as demographic shifts, the COVID-19 pandemic and changing workforce preferences.

Demographic Shifts: The aging population in many developed countries is leading to a shrinking workforce. As older workers retire, there are fewer younger workers to replace them. This demographic shift has been particularly pronounced in regions like Europe and Japan.

COVID-19 Pandemic: The pandemic accelerated the adoption of remote work and raised health concerns for workers in close-contact environments, such as warehouses. Many workers reconsidered their career choices and sought opportunities that offered greater safety and flexibility.

Changing Workforce Preferences: Millennials and Generation Z workers often have different priorities and expectations than previous generations. They value work-life balance, job security, and opportunities for skill development. These preferences can affect their willingness to take on physically demanding or monotonous warehouse jobs.

Warehouse Automation – A Solution to Labor Shortages

As the labor shortage crisis deepens, warehouses and distribution centers are turning to automation to bridge the gap. Automation technologies, such as robotics, artificial intelligence and intralogistics software systems, are transforming the way warehouses operate. Let's explore how warehouse automation is addressing the labor shortage problem:

1. Increased Efficiency and Productivity: Automation systems work tirelessly without fatigue, ensuring that warehouses can operate 24/7. This increased efficiency translates into higher productivity levels, helping warehouses meet customer demands even during peak periods.
2. Reduced Dependence on Labor: By automating routine and repetitive tasks, warehouses can reduce their dependence on human labor for manual handling, sorting and packing. This is particularly valuable in environments where finding and retaining workers has become increasingly challenging.
3. Safety Improvements: Automation systems can enhance workplace safety by taking over hazardous tasks, minimizing the risk of injuries to human workers. This can make warehouse jobs more appealing to potential employees who may have concerns about workplace safety.
4. Skill Diversification: Warehouse automation requires skilled workers to operate and maintain the technology. This creates opportunities for upskilling and reskilling the existing workforce, making warehouse careers more attractive and aligning with the preferences of the younger generation.

Key Types of Warehouse Automation

Now, let's explore some of the key types of warehouse automation and their applications in addressing labor shortages:

Autonomous Vehicles: Robotic systems, such as AMRs (autonomous mobile robots) and AGVs (automated guided vehicles), are increasingly being used for tasks like material movement, order picking, and inventory management. These robots can work alongside human employees, enhancing overall efficiency.

Automated Sorting Systems: Sorting and routing items and packages within a warehouse are time-consuming tasks that can be automated using sortation conveyor systems, sortation machines, sorting robots and smart routing algorithms. These systems reduce the need for manual labor in sorting operations.

Intralogistics Software: In modern warehouses there are many systems that need to communicate with each other for operations to run smoothly. This is especially true for facilities that use any degree of automation. Intralogistics software helps to ensure seamless integration for maximum productivity gains by connecting host systems and material handling automation to create a seamless, scalable system that gives users control over their operations. 

AS/RS (Automated Storage and Retrieval Systems): AS/RS technology uses robotic cranes and conveyors to store and retrieve items from racks automatically. This minimizes the need for human operators in managing inventory and improves space utilization.

Picking and Packing Automation: Automated picking systems, like pick-to-light, pick-to-voice and goods-to-person (GTP) automated storage systems, assist workers through the order fulfillment process, reducing errors and increasing efficiency. Additionally, automated packing machines can swiftly prepare products for shipment.

Robotic Automation: Industrial robotic solutions offer a flexible, high performance approach that can tackle sophisticated operations, remove bottlenecks, and flex to accommodate industry market growth, product changes and other challenges.  AI-powered vision systems have helped to further enhance robotic solutions like robotic piece and bin picking. This combination creates goods to robot solutions capable of picking the most complex assortment of products with 99.9% accuracy, gaining knowledge from previous picks to better handle various product shapes, sizes and surfaces.

Case Studies in Warehouse Automation

Several companies have successfully integrated warehouse automation to address labor shortages and improve efficiency. Let's look at a couple of case studies:

Best Buy

As a worldwide, omnichannel electronics retailer, Best Buy revolutionized their supply chain network in order to compete in today’s fast-paced e-commerce environment. Through an in-depth engineering consulting study, they were able to create logistical efficiencies. The company implemented eight new AutoStore systems with 840,000 bin locations and over 1,000 robots. Best Buy was able to offer customers free next-day delivery to 50,000,000 people and optimized store replenishment.

Dafiti Group

A Latin America consumer goods ecommerce retailer that operates highly automated warehouses serving the region. These facilities use a system of AMRs, specialized conveyors, and warehouse software systems to pick and pack customer orders. Dafiti's automation technology has enabled them to handle a high volume of orders with precision and speed, making them a leader in industry.

Enhance Efficiency, Safety and Create Opportunity

The labor shortage crisis is a pressing issue affecting industries worldwide, including warehousing and logistics. As warehouses strive to meet increasing customer demands, warehouse automation has emerged as a critical solution to bridge the labor gap. Through the implementation of robotics, AI and intralogistics software systems, warehouses can boost efficiency, reduce dependence on manual labor, enhance safety and create opportunities for workforce development.

While challenges exist, such as the initial investment and integration complexity, the long-term benefits of warehouse automation are evident. Companies like Best Buy and Dafiti Group have demonstrated the immense potential of automation to revolutionize warehouse operations and ensure continued growth and competitiveness.

Author: Johnathan McRary