The success of automating at large scale in big warehouses relies on companies being willing and able to rethink their entire supply chains, says Jonas Swarttouw, vice president customer and business development for North America at NewCold, a logistics service provider focused on some of the largest food companies in the world.

“Historically, there's a lot of warehouse infrastructure that has formed across the country, which has been built for very different supply chain needs than today,” says Swarttouw. “You see a lot of smaller scale warehouses at locations that made sense in the past, with capabilities that are in general less automated and therefore more challenged to cope with the needs of shippers.”

Automation can be transformational, but it’s essential to first figure out where physical assets should go. Companies that are growing, either organically or via acquisition, will tend to face problems if they’re not reimagining their distribution network. “It becomes increasingly difficult for them in their historical chosen network to achieve an efficient flow to their customers,” says Swarttouw. “Then they come to a moment of rethinking their supply chain where they say, should we keep working this way?” They might want to look at increasing an existing facility’s capacity, or building a new plant somewhere, or consolidating warehouses into one “node.”

The COVID-19 epidemic, which created difficulties in staffing and running warehouses, brought the attractions of automation into the spotlight. In some cases, automation helped companies “dodge the bullet,” Swarttouw says. “What we've proven to ourselves is that automating warehouses is not only beneficial in terms of providing a higher service level at a lower cost, it's also very resilient in a very dynamic supply chain where crazy things can happen, like COVID.”

Part of rethinking ahead of automation involves figuring out that humans will need to do different tasks, or perform tasks differently, Swarttouw says. “We are a believer of enabling people in the warehouse.” Technology, ultimately, “enables them to out-perform.”