Automation: a question of resilience

SINCE EARLY 2020, global supply chains have endured a relentless barrage of disruptions: from Covid-19 shutdowns and port congestion to the war against Ukraine, Red Sea shipping attacks, and rising geopolitical tensions. Add in inflationary pressures, interest rate hikes, and volatile tariff policies, and it’s no wonder supply chain executives are searching for strategies that go beyond optimisation, they’re seeking resilience.

Among the most effective and forward-thinking responses to this uncertainty is warehouse automation. Once viewed primarily as a tool to improve efficiency, automation now plays a central role in helping companies manage risk, maintain service levels, and adapt with agility in an unpredictable world.

A cumulative effect

The cumulative effects of multiple global disruptions have fundamentally changed how companies must operate. Recent U.S. tariff changes are already prompting companies to shift away from just-in-time models in favour of ‘just-in-case’ inventory strategies. Recently, according to Gartner, 28% of industrial manufacturing supply chains have or are planning to move production closer to end markets. Holding more inventory in domestic warehouses before additional tariffs take effect is now a common risk mitigation tactic. But this creates a demand for more space and higher storage density, something not easily solved with traditional warehousing models.

At the same time, businesses are struggling to attract and retain labour. Warehousing roles often face high turnover, and onboarding new workers tends to be time-consuming and costly. These labour challenges increase operational vulnerability and make it harder to meet service expectations consistently. Companies need systems that reduce dependency on manual labour and offer predictable performance at scale.

Strategic response

According to Gartner, automation is imperative as companies are looking for ways to cut costs and become more productive. It’s a strategic response to macroeconomic volatility. Storage solutions, such as automated storage and retrieval systems (ASRS), enable companies to significantly expand storage capacity within existing footprints and scale throughput dynamically as demand fluctuates.

This is critical for executing a just-in-case strategy. By allowing companies to store more product closer to their customers, automation enables rapid response to demand spikes or supply disruptions. In short, automation transforms warehousing from a static cost centre into a flexible, resilient engine for growth.

The Covid-19 pandemic offered a stark contrast between companies that had already invested in automation and those that had not. Retailers and logistics providers equipped with ASRS, goods-to-person (G2P) systems, and flexible warehouse management software (WMS) were able to scale up order fulfillment and absorb labour shortages far more effectively than their manual counterparts.

Delaying decisions won’t work

The convergence of global disruptions, rising warehousing costs, and heightened customer expectations makes this a pivotal moment for decision-makers. Waiting for more “stable” times is a risky strategy as volatility is the new normal. Companies need to evaluate levels of automation to ensure cost optimisation and output maximisation. Delaying this decision not only risks operational setbacks but can lock companies into inefficient processes that become harder to unwind later.

Historically, warehouse automation required large upfront capital investments, making it inaccessible for many businesses. That’s changing. Flexible, as-a-service models are removing those barriers and accelerating adoption.

Today, such models allow companies to pay based on throughput and storage usage, much like a utility. There’s no large capital expenditure required, and the all-inclusive pricing typically covers system maintenance and integration. Companies can adjust capacity based on real-time needs, avoiding costly overbuilds or inventory shortfalls. This model not only reduces financial risk but also enables faster time-to-value. Most importantly, it gives companies more control over how and when to scale operations.

Automation addresses the most pressing supply chain challenges. Now, as volatility is the only constant, warehouse automation is more than a smart investment. It’s a shield against uncertainty and a springboard to future success.

Mats Hovland Vikse, chief executive officer, AutoStore