What Level of Automation Do I Need For My Warehouse?

What Level of Automation Do I Need For My Warehouse?

15 years ago, we went to visit a client warehouse. It was a medium sized warehouse of around 40,000 sq ft, entirely run by a single warehouse manager. They weren’t using a software, automation or excel back then — just stacks upon stacks of boxes with no racks, seemingly put into disorganized piles. When asked how anyone could find a specific product in the warehouse, the warehouse manager confidently replied he knew exactly where everything was located. When asked, he could find a product that had been sent in two weeks ago in 60 seconds flat!

The warehouse manager’s skills were highly uncommon, and even more so today. Managing a warehouse on your own of that size is no easy feat, and takes a high amount of cognition and skill to function well. But what happens when the warehouse manager gets sick and quits? What if  the warehouse manager gets less sleep one day, or isn’t performing well due to personal reasons? The potential for mismanagement, no matter how accidental, could have disastrous consequences for any business.

So how do we solve for automation in a warehouse?

There are many ways to organize and automate a warehouse. Below is our ranking of warehouse management techniques, from simplest to most complex:

  1. Warehouse Manager
  2. Excel
  3. ERP systems
  4. Basic WMS with scanning
  5. Advanced WMS
  6. Automated material handling system
  7. Automated sorter
  8. RFID
  9. Smart material handling system
  10. Humanoid robots in warehouse

Let’s take a look at the other kinds of automation:


15 years ago, Excel was the main method of warehouse automation for small to medium sized businesses. This method involves entering in the product and location manually, and making edits every time that product has been moved, shipped or returned. The larger the inventory and warehouse, the harder it is for this method to accurately manage your inventory. This is especially true if the system crashes or the file is lost, since excel is not a centralized system that can be modified by multiple people. This can also make for inventory errors as multiple people begin to manage the same document at different times.

Enterprise Resource Planning Systems

Most enterprise resource planning systems have basic inventory and warehouse management functions beyond excel. For them, they know which products are received, which products are shipped and which are still in the warehouse. This is a type of automation that is useful for multiple warehouse managers that don’t use scanners, and instead enter data offline in their PC’s. ERP’s have centralized data, allowing multiple people to log in and see or modify the data at the same time. The downside to this method, however, is that you don’t know if the data is accurate or not because you’re not scanning everything in. This means that individual products can get lost in the mix easily, especially with multiple people modifying the same document manually.

Basic WMS with Scanning

The new generation of WMS’s now provide scanning, but fifteen years ago, this functionality was very expensive. When warehouse management systems first started, they were  basic and didn’t have the capability to include optimization techniques or productivity improvements. Most existed to just show accurate inventory.

Advanced WMS

Now, many WMS’s like Logiwa have improved to include features such as walking path optimization, advanced picking algorithms, cluster picking, batch picking, wave picking, finding the closest product in the warehouse, putting similar products together, applying ABC analysis to putaway products, and more. These functionalities are much more high level than those that a basic WMS or Excel system could do, mainly because of the algorithmic solutions involved. While an advanced WMS can handle most to all the needs of a SMB owner, it relies on human interaction to complete tasks,  rather than connecting with other automated softwares.

Automated Material Handling System

An Automated Material Handling System is a goods to person system, which means that an automated warehouse brings goods to the picker rather than the other way around. An AMHS’s are great for saving time, since the system will ask for a product, knows where the product is, and bring the item in front of the person. An AMHS is generally only useful for products that are located in a single pallet or box, however. This is because the mechanical system is equipped to handle pallets or boxes .

Automated Sorters

An automated sorter takes the SMHS model a step further by implementing automation in picking and sorting items. An automated sorting system knows which item belongs in which order, and will automatically sort the item into a tote or bin for that order. One sorter system can sort over 1,000 orders in a row, saving hours in picking time. An automated sorter speeds up productivity because it consolidates many tasks at once. However, this option is not as portable or easy to implement as a WMS system, since it involves heavy automation and functionality beyond what a SMB warehouse can support. It is also a costlier option due to the physical sorter needed for production.


RFID, or Radio Frequency ID tags, can help track a product within the warehouse itself. When you scan the RFID, the system is able to trace the item within the warehouse by sourcing it’s location. RFID’s are advantageous if your warehouse contains large items, like dishwashers or couches, because it eliminates the need for a scanner. RFID’s currently cannot be placed on smaller items, however, because of their size and also their overall cost. They are useful for larger warehouses, in which multiple items are being shipped out of the warehouse per day. The use of an RFID helps in this case by automatically scanning the item once it has left the warehouse and entering the item in the system.

Smart Material Handling System

Kiva’s Automated Material Handling System is a group of autonomous robots powered by AI. They can sense humans and obstacles, find their way around a warehouse without railing or pathways laid down for them, and can lift up to three times their own weight.  Smart material handling systems like Kiva are currently expensive and difficult to train. However, like other AI powered assistants created by Amazon, they might not be for long. Smart Material Handling Systems have the potential to become ubiquitous in the warehouse, no matter how big or small — their only barrier currently is cost.

Humanoid Robots

Humanoid robots like the Boston Dynamics Atlas Robot can avoid obstacles and lift objects, which could help theoretically in the packing and putaway processes. Their superhuman ability to handle products with care and ease are still nevertheless in the most basic stages of development. Training a robot like Atlas in every warehouse is currently a herculean task, and is impossible to sustain. In the future, however, humanoid robots have the possibility to become easier to train, package, and manage; they could become more cost-effective and easy to use, just as the modern laptop is a universal staple today. The only question is… when?


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