Big-box retailers with even bigger distribution centers, such as Target, Walmart and Aldi, were the first to embrace warehouse automation retrofits during the COVID-19-driven e-commerce boom. Now, there’s likely to be a “second wave” of upgrading and automating warehouses as retailers adapt to the new world of e-commerce, along with the latest technology.

According to a recent report from Insight Analysis, warehouse automation orders will start to increase towards the end of this year, with growth continuing in 2024, pushing automation revenue growth back into double figures in 2025. 

Jamie Dorland, construction executive at Caddell Construction, which has retrofitted and improved automation at 15 major warehouses in the past six years, says there’s an urgent need to figure out what was learned in that first wave that can help others during the coming wave. First and foremost, he says, owners need to coordinate vendor requirements and prep their buildings beforehand. 

“We’re talking with quite a few users that are actively planning and looking at their first automation building ever. They know they have to get this technology into their facilities quickly given what’s happening with supply chains and the labor market,” says Dorland. “That’s a positive development, but what we’re seeing is no one is focused on what you have to do to actually prep the facility beforehand and the impacts it can have on existing operations.” 

Often unforeseen automation-related needs, including utility transformers and electrical switch gear, compressed air capability, and in some cases additional or replacement fire pumps, can get overlooked or underestimated, Dorland warns. Then there’s the plain fact that you’re going to be dealing with a construction site for weeks or months. 

“My advice is to get the general contractor working with the automation company, and to allow a good ramp-up period, especially for greenfield sites,” says Dorland. 

But perhaps the biggest challenge that Dorland’s company ends up anticipating and helping the client navigate through is the disruption at an existing facility that comes with automation. 

“One scenario that plays out frequently is that, during the period that the robotic company is selling the product to the client, there’s a lot of focus on what those technologies are, and the space they’re going to be contained in. And the client gets focused on the operational or productivity impact on the area,” says Dorland. “Our experience is that the client thinks that’s where the impact stops. And it doesn’t, unfortunately. When we go in to prep the space for the project, what happens outside the area of containment gets disrupted. Those disruptions are what we see typically not accounted for. So that’s where we focus a lot of our efforts, early on.”

An example is a client that needed to relocate some electrical panels as part of the automation project. Shutting off electricity affected the construction area, of course, but it also impacted other operations, including yard bay lights and interior truck dock lights that indicated occupied/not occupied. “They weren’t tracking that,” says Dorland. A 10-hour shutdown of multiple truck bays ensued. “They knew we needed to relocate a panel, but they didn’t quantify the disruption.”

Another issue is the way automation projects develop and change prior to installation. That highlights the need for collaboration between the general contractor and the racking and robotics installer. “We’re often pouring concrete five or six months before the robots come,” says Dorland. During that time, the automation vendors can be making changes, adjusting and refining the design, and the relevant information doesn’t get relayed to the general contractor. That can create expensive inefficiencies when it comes time to complete the installation.

Dorland anticipates a potential increase in retrofitting existing warehouses and DCs with automation, in preference to greenfield sites. “There’s a lot of indecision in the market right now," he says. "The developer world has slowed down; they’re uncertain what real estate is available and what is needed. Retrofitting existing warehouses is going to continue to evolve.”