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Automation Accelerates to Boost ROI and Efficiency
Meghan Hall
10 min read
Automation has been having a bigger and bigger impact on the industry since the Industrial Revolution. But today, the technology has begun to get even more attention as technologists continue to iterate, consumers demand speed for their e-commerce deliveries and companies have a thirst to improve ROI and increase efficiency.
In 2024, experts said companies implementing automation did so out of necessity—and to cut the time it took to complete tasks like transporting items across the warehouse. They did so in the face of labor shortages in the logistics sector, increased competition from new-entrant e-commerce players and a delicate consumer spending environment. The technology is only expected to accelerate as complementary enhancements, like artificial intelligence, proliferate further and consumer demands continue to increase.
Experts weighed in on where it might be headed next—and how logistics leaders should consider implementing it.
AUTOMATION IN 2024
Andy Johnston, Geodis’ senior director of innovation, said the logistics company focused on lower-lift, but meaningful, technology implementation and use in 2024.
“We’re using our technology to automate the movement of inventory inside of the facility, so that our teammates have to travel less. So by traveling less, they’re increasing their productivity. That’s the very basic function of what a lot of the automation that’s out there is today,” Johnston said.
He noted that automation moving items from point A to point B have made the warehouse more efficient, in turn speeding up client processes.
Ahmad Baitalmal, chief technology officer and co-founder of warehouse automation startup Mytra, said that base-level automation has almost become a necessity because of the way retail and logistics moved in 2024.
As customers continue to value convenience and speed, it can be nearly impossible to achieve that by relying on humans’ work alone, he said.
“Five years ago, it was, ‘Wow, this is amazing that things are coming to me super fast.’ Today, it’s, ‘Why isn’t it here already?’” Baitalmal told Sourcing Journal. “[This is] no longer optional; it is required that you operate at a faster pace and deliver more with more capacity. That is your competitive advantage. Now, if you’re not doing that, your competitors are doing that, and so there’s a lot more attention to automation happening today.”
As companies worked to make their operations faster and more efficient, Jeremy Tancredi, partner at consulting firm West Monroe, said in 2024 he saw a move toward automation for specific use cases rather than sprawling aspirations.
“We’re seeing more companies move to more modular automation, so you have a lot of these very niche companies starting up,” he said.
A FORWARD LOOK
Because Geodis has seen that automation positively impacts its efficiency and processes to date, Johnston said the logistics company has several areas in mind for the technology in 2025. While 2024 was focused on systems that could impact individual shipments or people, the company has plans to focus on more commercial use cases this year.
“Where we’re looking to now is B2B order shipments—so think picking cases instead of each item, a pallet instead of a box…where a smaller-format robot wouldn’t be able to handle it,” he said. “Another thing is looking toward the inbound side of the business—truck unloading, both for loose cases and for full pallets.”
In the at-large logistics industry, Johnston said he expects drone-based solutions with AI built into the background to become a popular use case to maximize inventory efficiency. He also hopes to see expanded use cases for humanoid robots, which, today, are good at completing repetitive tasks, but have limits in terms of what they can do, how many pounds they can lift and how they interact with human workers.
As technologists and startups continue to change automation with technology—and the results being shared start to look more and more exciting—Johnston warned that companies looking to automate should ensure the third-party technology providers approaching them can actually carry out the scope of their promises.
“There’s a lot of really cool robots out there, a lot of roboticists, a lot of stuff that looks awesome on the trade show floor, but that may be their entire robot fleet, is the one they bring to the show floor,” he said.
Still, Johnston and Tancredi expect to see a greater number of mid-major companies partnering with startups and third-party technology providers; for companies that lack the resources and technological prowess of the likes of Amazon and Walmart, building in-house systems can take years.
Baitalmal said in the age-old “build vs. buy” equation, each side has its pros and cons.
“In 2025, manufacturing and supply chain companies weighing the choice between buying versus building robotics technology should consider factors like speed to market, cost, customization and adaptability,” Baitalmal said. “Buying offers quicker deployment and access to cutting-edge solutions but may limit customization and create dependency on external innovation. In contrast, developing in-house allows for tailored solutions enabled by recruiting and building a core team of innovative engineers, though it requires significant investment and time.”
A PEOPLE PROBLEM?
While automation can have positive outcomes for companies’ efficiency and profitability, it can also have negative impacts on worker sentiment if not introduced in a way that gives employees confidence in their own roles.
The contract dispute between the International Longshoremen’s Association (ILA) and the East Coast U.S. ports, in which automation proved a major sticking point, is just one industry example of fear of job loss creeping in. But the longshoremen aren’t the only ones with that fear, and researchers believe that in many cases, those fears could be warranted. Forrester projects that, across industries, the U.S. could see a net loss of over 1.4 million jobs by 2032 because of automation.
To help quell employees’ fears, some organizations have started to upskill employees and train them alongside automated machinery. But Tancredi said that, as many companies have introduced automation, they’ve done so without properly explaining to employees what the purpose is, or how they can best interact with the technology, which can cause tension in the workplace.
“Traditionally, it’s been kind of an arrogant approach by management that says, ‘Oh, well, we can talk to the workers all we want about automation, but they won’t understand it.’ But that’s no longer the case. People are using technology in every aspect of their daily life. So whether it’s a warehouse worker or someone in the manufacturing facility or on a dock, they’re pretty tech savvy at this point,” he said.
With that in mind, Tancredi recommended transparent communication with employees whose day-to-day job responsibilities will be changed or impacted by automation. He noted that it’s also important to highlight the benefits automation could have for workers: particularly around health, safety and saving time, which could see workers sustaining fewer musculoskeletal injuries from heavy lifting and physical work in the warehouse, as well as incurring fewer unpredictable overtime hours.
“The long-term health benefits can help [people] to really see warehousing as a career, rather than just a job for the young,” he said.
Tancredi said many companies, particularly those that are small-to-medium enterprises (SMEs) are more interested in applying warehouse automation technology in bits and pieces than they are in creating a fully automated warehouse within several months. “We’re seeing more and more clients embrace small pieces of automation, as opposed to trying to boil the whole ocean,” he explained.
And while some of that is often done as a way to test and learn, or to save money until the technology has been proven out, it can also be a way for workers to interact with automation in a low-stakes way, he noted. Once they’ve seen that one process can be positively impacted by automation, workers may be more likely to embrace similar technology for other functions.
While many think of automation as being integral to physical processes, Johnston said it can be just as useful for tasks like translation; he noted that Geodis has used automation via screen to share directions or tasks in workers’ native languages, since about 30 percent of its workforce, English is a second language. That, he said, has helped training that might usually take weeks take mere days.
“With retail [and] fashion, we have these very high-peak seasons…so using some of the tools that automation offers for training to reduce training time,” he told Sourcing Journal.
For Geodis’ employees, it typically takes three to four weeks to become fully comfortable with automated technology working in tandem with humans. And when he thinks about the industry on the whole, Johnston said he believes it’s still in early days in terms of what automation can truly offer.
WORDS FROM THE WISE
As companies continue to set automation in motion, they’ll not be starved for choice around the technology.
Tancredi and Johnston expect many companies to adopt piecemeal automation capabilities, primarily powered by third-party providers. Tancredi said that trend has a few reasons behind it—the first being that, as technology proliferates, startups honing in on one specific use case for warehouse automation have become increasingly popular. Most robots and automation systems are designed for a few main capabilities, and companies unsure about automation can make low-risk, lower-cost investments in those types of technologies, as compared with buying in on a wholly automated warehousing system.
“We have all these different styles of robots, from little modular ones that look like little Roombas, to full-scale cranes that are going up and down the aisles,” Tancredi told Sourcing Journal. “You can get in at a pretty low entry level—in some cases, only a few thousand dollars to get a single robot…so it’s very easy to see if it works for you, to see if it’s the right investment for your company.”
But as companies sort out what kind of technology makes sense to implement, it’s important not to use technology for technology’s sake; identifying an area that could use stronger efficiency before evaluating solutions can help ensure investments make maximum impact when it comes to automation.
As those evaluations happen, it’s not just about looking externally; to find success with automation, Johnston said, companies need to ensure they have their ducks in a row on existing processes; automation, after all, isn’t a magic cure-all, and innovation and technology teams making recommendations on automation need to see improvement on key performance indicators (KPIs) to justify continued expenses.
“As you’ve selected the process that you want to automate, really dive deep into that process and its current state and make sure that it’s not a bad process, because adding automation to a broken process does not fix it. If anything, it’s just going to show you where it’s broken,” Johnston said. “Make sure you’ve got the house in order before you bring in automation, because if you bring in automation and [the process] was broken before…guess what’s going to get the blame? Automation, because it’s the new thing.”
This article was featured in SJ’s Logistics Report. To download the full report, click here.
