Warehouse Automation vs. Workforce Expansion: Which Solution is Right for Your Logistics Operations?

Warehouse automation

By Tompkins Solutions

In today’s rapidly evolving landscape, logistics operations face the challenge of meeting increasing demands while remaining competitive. The decision to invest in automation or hire more workers is critical for long-term success. Each strategy has its own set of pros and cons, and the right solution will depend on each company’s unique requirements and operations.

Hiring More Workers

Pros:

  • Greater Adaptability: Human workers possess the cognitive and problem-solving skills required to handle unexpected challenges or irregularities in the logistics process.
  • Easier Adoption: Hiring more workers is a straightforward solution that requires less data analysis and technical competency and is typically quicker to implement than automation.

Cons:

  • Limited Scalability: Companies may be constrained by factors such as labor shortages, retention challenges and the need for physical space and infrastructure to accommodate additional employees.
  • Human Error and Variability: Despite their capabilities, human workers are susceptible to errors, fatigue and variability in performance, which can cause inefficiencies, quality issues and delays.
  • Increased Labor Costs: Hiring more workers entails ongoing expenses related to salaries, benefits, training and supervision, which significantly impacts operational costs.

Investing in Warehouse Automation

Pros:

  • Increased Efficiency: Automated systems can perform repetitive tasks with precision and speed, resulting in enhanced efficiency in various aspects of logistics operations, including sorting, packaging and inventory management.
  • 24/7 Operations: Unlike human workers who require breaks, automated systems can operate continuously, enabling round-the-clock order fulfillment.
  • Cost Savings: While the initial investment may be significant, implementing automation can increase long-term cost savings by minimizing errors and optimizing resource utilization.
  • Increased Scalability: Automation solutions such as autonomous mobile robots (AMRs) can be easily scaled up or down to accommodate changing demands.

Cons:

  • Initial Investment: Some automation solutions require a higher upfront investment in equipment, software and infrastructure. Thus, it’s critical to weigh the payback period, initial capital investment and required volume to select the right solution for each situation.
  • Technological Knowledge: Operating and maintaining automated systems requires specialized skills and technical expertise, which may entail additional training for existing employees or hiring new personnel with relevant qualifications.

Many companies may find that a hybrid approach that combines automation and human labor can provide the best of both worlds. A gradual implementation strategy allows for scalability, while ongoing training and upskilling programs support the workforce’s evolution alongside technology. For example, a goods-to-person (GTP) solution can significantly minimize worker travel time and increase efficiency by bringing the items to be picked directly to the worker.

Prior to implementing a hybrid strategy, follow the steps below to determine the right combination of workers and automation solutions for your operations:

  • Assess the specific needs and challenges of today’s operations
  • Develop a targeted payback period, governed by an internal rate of return (IRR) or return on investment (ROI) calculation
  • Review the company’s long-term growth goals
  • Evaluate the initial capital investment and long-term cost implications and potential savings
  • Find a partner that can deliver a modular, scalable and flexible solution

As logistics operations stand at the crossroads of automation and workforce expansion, a thoughtful and strategic decision-making process is essential. By carefully considering the advantages and challenges of each option, companies can navigate this decision successfully.

Contact us today to learn how we can help you determine the right solution for your supply chain operations and increase resilience in this ever-changing logistics landscape.