Automation's fundamental role has always involved augmenting labor by using technology for tasks that are less desirable, dangerous or difficult for people to complete repeatedly. Over time, automation evolved as advancements enabled machines to do more.
Innovation was always the name of the game. From the debut of box-folding machines and the introduction of powered conveyors more than a century ago to the software-controlled Automated Storage & Retrieval Systems (AS/RS) and robotic pickers of today, automation has steadily enabled materials handling operations to do more with fewer people.
Even so, today’s warehouse automation landscape is a study in contrasts. On one hand, the distribution centers relied on by global e-commerce stalwarts are marvels of efficiency that showcase what’s possible when advancements in everything from software to robotics converge.
On the other hand, many businesses are just beginning their automation journey — relying on people to complete manual tasks in facilities very similar to those used decades ago. But in all environments, one underlying issue continues to drive the pursuit and application of automation: the ongoing shortage of warehouse labor.
Business and supply chain leaders know the shortage of labor well. But despite its longstanding impact, one that accelerated during the pandemic and the subsequent e-commerce explosion that resulted, today’s shortage of warehouse labor is in many ways even more problematic.
It’s not just that repetitive warehouse tasks can be monotonous, cause injuries or even that other industries can offer competitive compensation. Wages at warehouses have continued to grow, with average hourly earnings reaching $26.04 in December of 2025, according to the U.S. Bureau of Labor Statistics. In many ways, the problem is more fundamental. Warehouse work is not, for a variety of reasons, something younger generations want to do.
That’s why even today when materials handling operations are eager to offer increased pay and perks, turnover in warehouse roles is endemic, making the shortage of labor a constant issue. It’s also why more than half (54%) of warehouse leaders have turned to the automation of non-value and repetitive tasks as the way to improve productivity.
Demands and opportunities converge
The shortage of warehouse labor of course is not the only driver of increased automation. Evolving consumer expectations — from next-day deliveries to same-day deliveries in many markets — require throughput levels that only automated systems, including Automated Mobile Robots (AMRs), AS/RS and robotic pickers deliver. Then there is the order accuracy and effective store replenishment that automation is proven to enable.
There is also the fundamental reality of business today. With success often constrained by razor-thin margins, automation in many sectors is simply required.
Even so, shortage of labor typically remains the first and most pressing issue warehouse leaders must address. How they are approaching it is changing.
While the market to design, build and support greenfield, state-of-the-art distribution centers remains, economic headwinds have prompted many organizations — including omnichannel retailers and e-commerce companies — to take a more strategic approach to automation. This, combined with the cost of capital, is shaping the types of automation companies are investing in.
Instead of broad, sweeping initiatives, businesses are strategically targeting specific tasks where automation can deliver clear ROI and operational efficiency in existing facilities. Key areas like truck loading and unloading, picking operations and palletizing have emerged as prime candidates as businesses prioritize investments in areas with the greatest impact.
This begs the question of where warehouse leaders should focus and what considerations they should keep in mind to ensure that the automation they deploy effectively addresses the labor shortage and other operational imperatives. While every organization has unique needs, the five observations that follow are broadly applicable.
Five fundamentals for a strategic approach to automation
1. Treat automation as a competitive advantage
While its impact on labor is great, automation’s other superpower is speed. In e-commerce for example, those who can get an item into a bag, box or vehicle in hours instead of days typically eat the lunch of those who cannot. That is why it is important to ask how automation impacts the customer promise. Does it enable lower prices and faster fulfillment? Keep in mind that AI and software advancements will enable automation to effectively address ever-more variable tasks.
2. Ask, 'How can I best improve the warehouse I have?'
What is your biggest pain point? It usually makes sense to start with low-hanging fruit and progress from there. But importantly, that’s not always the case as the next fundamental reveals.
3. Complete a detailed business case before any automation project
The importance of a detailed business case cannot be overemphasized. It is crucial to validate your assumptions, ensure projections are true, and confirm that the expected return on investment is realistic. Ideally, the business case will explore multiple options — including the modernization of brownfield facilities and building of greenfield ones. In some cases, a new facility ends up being the best choice.
4. Fully embrace ergonomics
In some countries, ergonomics is the only way to address limits on how much employees can lift. It should be used in all environments as a powerful way to retain talent. Ask how automation can help. Can items be slid rather than lifted? Can pick stations be adjusted to each employee’s most comfortable configuration? The ergonomics of a facility is a powerful selling point with prospective employees.
5. Don’t replace one labor shortage with another
A puppy is not just for Christmas, nor is automation ever a one-and-done affair. It must be maintained and optimized, an effort that requires cultural change and talent with mechanical skills. Be prepared to scale your labor needs towards technical acumen or partner with those who provide it. You don’t want to exchange one labor shortage for another.
By adhering to these five fundamentals, supply chain leaders can strategically leverage automation to address their warehouse labor shortages. Just as importantly, this approach positions them to stay ahead of the curve as emerging innovations unlock new capabilities and opportunities.
