The modern-day warehouse is serving as a laboratory for the introduction of innovative supply-chain technologies. But the implications for human workers remain uncertain.

Automation is transforming virtually every aspect of warehouse and distribution center operations. And not a moment too soon: the age of e-commerce demands unprecedented levels of efficiency and speed of order fulfillment.

Software is playing a major role in driving new advances in the warehouse, says Christoph Buchmann, account manager with Dematic Canada. “Ten years ago, the technology you selected would be the driving parameter for design,” he says. “Now we tend to start with software and studying processes. That’s a huge shift.”

The rising cost of labor is another factor in the push for greater automation. That’s especially the case in Canada, where labor has long been a significant factor in setting up distribution facilities. Over the past year, declining unemployment rates and a rise in the minimum wage have only exacerbated the situation for employers, Buchmann says. In addition, the growth of the “gig economy” has created a less reliable labor pool, with employers struggling to staff up during periods of peak demand.

Such factors are shortening the return on investment from automation. Only a few years ago, payback from the average automated system might have taken four to five years, says Buchmann. Now, with the rise in labor cost, it’s closer to three years.

Wage levels aside, the business case for automation is strong, Buchmann suggests, noting that new systems improve accuracy, safety and inventory management, while reducing facility downtime.

Of all recent technological advances, robotics is having the most direct impact on the human workforce.

The rapid adoption of robots throughout the warehouse has led to sharp reductions in staffing. But Buchmann says the choice doesn’t necessarily come down to one of robots or humans. The emergence of “cobots” has created an environment where humans and machines work side by side, each attending to its natural strengths.

Artificial intelligence is helping to optimize storage and retrieval. Where an automated system chooses to store inventory often differs sharply from the decisions made by legacy technology. Systems driven by A.I. can account for multiple factors, to the point where the logic of placement might not be evident to the human eye. The result is a facility that’s more responsive to the needs of the moment.

“Software can make more intelligent decisions than humans, based on smart analytics,” Buchmann says.

The job of the remaining humans in the warehouse, at least for now, is to follow the machine’s directions on where to locate and pick product. Robots then convey the goods to the packing station or dock for loading onto trucks – once again, by humans.

All of this is made possible by new designs that allow for people and robots to operate safely in proximity to one another. Previously in warehouses and factories, robots had to be segregated in cages or sequestered areas of the facility. New models are equipped with vision systems and other devices that prevent them from harming humans.

Full automation of the warehouse, while present in some facilities, isn’t necessarily the goal. “If you can automate 80 percent of the volume,” says Buchmann, “you probably have a very healthy business case.”

The remaining 20 percent might consist of small steps or value-added functions that are not easily automated. They are especially common in e-commerce fulfillment environments, where personal touches to packaging and other elements of the order are often called for.

“The more unique the operations you have,” says Buchmann, “the more difficult it is to automate.”

He believes it could be two to three decades before fully automated “lights-out” warehouses are the norm. (Others posit a much shorter timeline.) Nevertheless, there remains the question of what to do with those workers who have been displaced by automation. Many will need to be retrained, or shifted to other trades entirely. The types of skills needed for software engineers and systems designers aren’t often found in the worker on the warehouse floor.

Because the average worker today is savvier about information technology, retraining might become more of an option in future. A forklift mechanic, for example, could undergo training in the controls of automated guided vehicles (AGVs).

Yet the ultimate fate of the human worker remains in doubt. Automation is sure to take over an increasing number of tasks within distribution centers. And “intelligent” systems will only get smarter. Where people fit into that picture is a question that could remain unanswered for years to come.