Automation can help warehouses address problems of labor scarcity and rising inflation, but is it cost-effective enough to justify the effort? Jan Bednar, chief executive officer of Shipmonk, offers a perspective.

With the current scarcity of warehouse labor and rising inflation, one might assume that automation offers an appealing and short-term solution. But case for automation isn’t without nuance. “Automation can play a massive part in reducing dependency on labor and overall cost, but it has to be applied properly and to the right operation,” Bednar says. Companies need to ensure that they’re accounting for unforeseen impacts that might change the needs of the facilities, in areas such as labor, system maintenance and additional investments required.

By locking themselves into automated systems that were designed to handle products of a certain size, such as goods-to-person setups, warehouses lose the flexibility to adjust to changing requirements.

“I don’t think automation is the solution for all companies,” Bednar says. “It has to be properly evaluated and decided on based on the current conditions of each individual company.” Criteria involved in making the decision include warehouse size and configuration, distribution patterns and, of course, availability of human labor.

It’s important to understand where your company is going to be two to three years from now, Bednar says. (To the extent possible; COVID-19 created a world that no one could have predicted.) And rather than start with hardware — many businesses think of automation in terms of robots, automated forklifts and other equipment — warehouses should first think about the software that’s required to run their operations. That, in Bednar’s opinion, is the biggest area of opportunity for warehouses considering automated systems. In particular, he recommends adoption of labor-management software, to track the productivity of human workers.