The warehouse challenge: Are you storing goods or just air?
The world of logistics is changing fast. Faster deliveries, smaller orders, and tighter margins are redefining logistics.
As consumer industries move toward digital platforms, expectations for speed and cost efficiency keep rising. At the same time, manufacturing companies are cutting stock levels to stay lean and flexible.
This puts new pressure on warehousing. Orders are smaller but more frequent, delivery times are shorter, and quality standards remain uncompromising. Picking errors must be avoided, as customers can easily change suppliers.
Automation is evolving, and so are the requirements
Automation can solve many warehousing challenges, but the technology itself is advancing rapidly. What worked ten years ago may no longer be enough.
When planning a warehouse automation investment, it’s essential to take a holistic view. Throughput is still a key criterion, but it should not be the only one. Other operational elements, such as stock management, adaptability, and space efficiency, deserve equal attention.
Why optimisation never stops
In small-item automation, such as vertical lifts or carousels, the highest throughput is often achieved for only one to two hours per day. Average throughput can drop to one-third of that level. Continuous optimisation is therefore required to keep performance steady.
Higher throughput can be maintained, but usually at a significantly higher cost. Shuttle systems, for example, can cost up to one million euros.
Most warehouse automation systems are not “install and forget.” Stock data must be reanalysed and items reorganised regularly. This process, called slotting, is not always pleasant but remains essential. Items change, assortments evolve, and demand fluctuates. XYZ analysis should be done several times a year, not just at startup.
Warehouse management software helps optimise bin locations but does not physically move goods. And if your analysis only uses past data, you will always be reacting instead of preparing for what’s ahead.
Are you storing goods or just air?
Automation can make warehouse space usage much more efficient than manual shelving. It allows full utilisation of building height and dynamic allocation of vertical space inside the system.
In tray-based automation, light curtains measure the tallest object on each tray and allocate space accordingly. Ideally, all goods and bins are of the same height. If not, space is wasted—meaning part of your warehouse is storing air instead of goods.
Systems that handle individual bins can assign space more accurately, but the efficiency depends on using bins that fit the items closely.
Another typical inefficiency comes from reserving full slots for replenishment orders. While convenient for planning, this can waste up to half of the available space. In the worst cases, when order sizes are high and reorder points are low, most of the capacity remains unused. Frequent updates to shelf planning and slot allocation are the only real solutions.
Keeping order flow under control
Maintaining FIFO, LIFO, or other stock-rotation principles becomes difficult when there is only one slot per item. Replenishing on top of existing stock might work for some products, but not for all. In many cases, multiple slots per item are needed. Systems that handle individual bins can manage this easily, whereas tray-based systems may struggle to do so.
Rethink your automation
When evaluating small-item warehousing solutions, challenge what you already know.
Automation technologies are evolving, and your evaluation criteria should evolve too.
A modern warehouse system should not only move items efficiently but also support continuous improvement, flexibility, and innovative use of space. The real question is whether you are storing goods or just air.
https://www.konecranes.com/equipment/agilon
