An exploration of warehouse automation implementations: cost, service and flexibility issues

Introduction Warehouses are important components of most supply chains. In terms of cost, they represent approximately 20% of total logistics costs (ELA/AT Kearney, 2004 and Establish/Davis, 2005), whilst in terms of service they are critical to the achievement of customer service levels (Frazelle, 2001), particularly as distribution centres are often the final point in the supply chain for order assembly, value added services and despatch to the customer. Automation is reasonably commonplace in large warehouses, particularly with regard to conveyor / sortation, and automated storage and retrieval systems, with each of these types of equipment being present in more than a third of large warehouses (Baker, 2004a). However, in spite of this significance in supply chains, warehouse automation has received relatively little research attention and this paper sets out to review the literature in this area and to explore the reasons for automation, how companies undertake automation projects, and the factors that may be relevant in their successful implementation.