Complexity, not cost, is the leading challenge when it comes to adopting automation technology in order fulfillment operations, our latest research finds. Automation adoption continues to accelerate in the warehousing space, driven by factors such as labor and skills shortages, increasing customer demand for faster and more accurate deliveries, and space constraints. However, according to our recently published Voice of Market Tracker, complexities associated with deploying automation in logistics facilities are presenting the greatest barrier to adopting automation. Unsurprisingly, financial considerations are also high on the list of obstacles, with budget limitations and high upfront cost ranked at #2 and #3 respectively. This is just one insight included in our latest Voice of Market survey, which covers market health, sentiment, investment appetite, vendor perception, pain points and emerging trends in the industry.

Our in-depth survey of more than 300 executives and facility managers found those involved in intralogistics cite challenges such as the need to alter layouts, upgrade facilities, integrate automation with existing platforms, or halt operations as deterring them from automating order fulfillment processes. For example, one electronics executive, told us, “Implementing large-scale automation – such as conveyors and sortation systems – in order fulfillment and outbound operations is a complex and time-intensive process. These installations require significant layout changes and operational downtime, which can be highly disruptive. While vendor and internal support teams help resolve these challenges, the reality is that disruptions frequently occur during transition periods, creating real operational risk on the ground.” Our findings highlight the importance of automation companies designing products that minimize operational disruption, can be installed into legacy warehouses as well as purpose-built facilities, and are deployed quickly and easily.

Cost is not the #1 barrier to automation in order fulfillment operations

We asked executives and managers from order fulfillment operations, including those in the retail, e-commerce, parcel, manufacturing and production, 3PL and distribution sectors to rank the importance of different barriers to automation, ranging from financial obstacles, to their strategic aims and staff capabilities. While budget and cost were certainly among the top challenges, the complexity of integration ranked number one, followed by budget limitations, high upfront cost, and concern around staff capabilities also ranking highly.

Integration complexity is the top barrier to automation for companies in order fulfillment operations

Providing an opportunity to develop an understanding of the warehouse automation market beyond what companies are hearing from their own customers, the Voice of Market survey delivers twice-yearly insights based on qualitative and quantitative research, coupled with expert interviews and analysis. It features ‘in their own words’ examples from executives across the industry. In our most recent survey, respondents repeatedly told us that just filling out an RFP with numbers is not sufficient. Their preferred future partners will take time to understand what is required, ask questions, perhaps  even visit the project location(s.) One food & beverage executive highlighted the need for automation to meet strict security standards to comply with internal IT policies, explaining: “This challenge is even more pronounced in large, global organizations where IT security requirements are strict. In some cases, we have been unable to move forward with preferred suppliers simply because their systems could not meet internal security standards.”

According to our research, because more automation is happening in brownfield sites, solutions need to account for working in parallel to production, taking more variables into account, and vendors must consider the specific limitations of each site before installing automation. One automotive and retail 3PL experienced unexpected facility infrastructure issues because of poor planning, with gradual shifts in the warehouse structure resulting in beam levels becoming uneven creating “significant problems for the stacker crane system”, which required precise calibration. They added: “Correcting the issue was costly and disruptive. The system had to be dismantled, the floor rebuilt, and the automation reinstalled in a different warehouse. Ultimately, the project failed to deliver its expected return – highlighting how small physical inaccuracies can have outsized impacts on automation performance.” In such cases, knowing your competition also matters – vendors with more complicated projects specifically request startups be added to the mix of RFP respondents, as they often approach challenges with more innovative solutions.

There are key differences by company type

While in aggregate integration complexity came out as the top barrier, our Order Fulfillment Voice of Market study identifies important differences in how respondents at various company types weight the various factors. For example, integration complexity is a much bigger issue in the parcel segment than it is for retail, where budget limitations far outpace every other barrier. This granular market segmentation and analysis provides valuable insights that can inform strategic decision-making, product development, service offerings, responses to RFPs, customer engagement, go-to-market plans, and marketing material.

Parcel faces the most acute integration complexity issues, while budget is top barrier to automation for manufacturers/producers and for retailers

This is only one example of how our Voice of Market service delivers insights regarding the market’s top priorities. Additional filters allow you to view the data by industry, region, revenue, facility size, and even facility height, enabling you to building more effective strategic plans, strengthen partnerships, and tailor messages to different audiences. Download our Voice of Market brochure here.

Automation is a top strategic priority for 40% of executives

It is no secret that the case for automation is strong and growing, as companies continue to struggle with hiring labor and its rising costs. In fact, it is the top strategic priority for 40% of respondents to our Voice of Market Survey. Despite the obstacles executives perceive to adopting automation, it is a high or top priority for 79% of the 363 individuals we quizzed when it comes to their order fulfillment operations.

Automating facilities is a top strategic priority for companies in order fulfillment

Within these companies, however, there is significant divergence in priorities between decisionmakers and those who influence decisions. Decisionmakers are significantly more likely to rate automation as a top strategic priority, indicating that the perceived challenge of convincing management to approve automation projects may be unfounded. Understanding this difference enables companies to better plan their approach and speak to the key needs of each audience.

Decisionmakers and influencers view automation priority differently

Use our Voice of Market service to craft more informed strategies

These are just two examples of the breadth and depth of information you can glean from the Voice of Market study. It features a range of deliverables, including an interactive survey analysis dashboard and a full written report. Covering the order fulfillment operations of a host of different companies across industry provides a deep dive into what the key challenges are for intralogistics operations.  The global data gathered is supported with clear, informed, quality insights from our market experts which are regular, timely, and consistent. It is the only syndicated Voice of Market offering of its kind, and can be actioned in decision making across a range of business areas; from strategic planning to sales, marketing, and solution design and development.

If you’re seeking unbiased, insightful, granular market data to support stronger strategic decisions, please contact us.