An exploration of warehouse automation implementations: cost, service and flexibility issues

Abstract

PurposeAutomated warehouse equipment is often regarded as being inflexible, and yet its use continues to rise even though markets are becoming increasingly volatile. The purpose of this paper is to explore the reasons for, and nature of, warehouse automation implementations in order to further this understanding.Design/methodology/approachThe research is based on semi‐structured interviews with some of the key stakeholders in automation projects. This is followed by a survey questionnaire to widen the findings.FindingsThe research indicates that the main reason for automation is to accommodate growth, with cost reduction and service improvement also being important. The implementation process tends to be complex and lengthy, although most projects are controlled within the planned budget and timescale. There is, however, a real risk of disruption and service level failings during the operational start‐up of these projects, as well as some concerns about ongoing flexibility.Research limitations/implicationsThe findings provide a useful insight into these areas but further research is required to explore the key characteristics of successful implementations and to understand how warehouse automation can be designed to provide responsiveness to rapidly changing market conditions.Practical implicationsThe findings have important implications as regards the need to incorporate scenario planning into the design process and to plan for the management of the ongoing operation.Originality/valueThere has been relatively little previous research into this important area, which involves a substantial proportion of the capital budget of many supply chains. The above findings are of value to academics and practitioners.