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Warehouse Management

The Complete Guide For Automated Warehouse Management (2023)

Find everything about automated warehouse management and learn what an automated warehouse is, its types, benefits, technologies, implementation and challenges.

Team Hopstack
April 23, 2022

In this blog

In the present day and age, automation in almost every industry and organization is considered to be revolutionizing. The idea behind automating your workflow is simple. It is to reduce operational costs and improve efficiency. But when it comes to automating a warehouse, things can get complicated. A warehouse is a significant component of the supply chain. There are so many moving parts and a lot to keep in mind before you know where or which part of the warehouse needs automating.

This article will take you through everything you need to know about Automated Warehouse in detail. It will also include the latest trends in technology and the challenges in Automated Warehouse you might encounter.

What is Automated Warehouse?

Automated Waerehouse or Warehouse Automation, in a nutshell, is the automation of the movement of inventory from the point where it is received into the warehouse to the point where the inventory is shipped out. Every step of the process is directed to reduce human intervention and maximize efficiency. When a business chooses to automate its warehouse, they gain control and visibility of the warehouse operations.

As a result, many companies and warehouse owners looking to improve their efficiency and optimize productivity are turning towards Automated Warehouse to achieve their business needs. As of 2018, research showed that more than 40% of warehouses moved towards technology and automation.

Before we go further, it is critical to understand that automation, as widely believed, does not always mean robotic or mechanical automation. In so many scenarios, automation simply refers to implementing software tools and services to eliminate the manual execution of tasks that take up the time and energy of the warehouse staff.

Types of Warehouse Automation

There are majorly two types of Warehouse Automations, and understanding how they are different can help you decide what is most suitable for your business.

Physical Automation:

Physical Automation of Warehouses refers to implementing robots and other mechanical equipment like conveyors to automate the manual labor process. It goes without saying that an upfront cost is high and must be borne by the warehouse owners when they decide to automate their warehouse this way. Based on the nature of business and the complexity of warehousing, this type of Warehouse Automation can be highly preferable for many companies.

Process Automation:

On the other hand, Process Automation refers to implementing tools that digitize manual processes such as handling data regarding inventory and orders. This simply refers to modern software that helps businesses and warehouses track complex data as efficiently as possible. The upfront cost is relatively low compared to the Physical Warehouse Automation technique.

Both of the above Automation techniques are highly beneficial. It mainly depends on the maturity and complexity of your business to know which of the above types are best suited for your warehouse. This could also mean that in situations where the warehouse is significantly huge, and there are large amounts of data, a combination of these Warehouse Automation types can be the most suitable.

When Should You Consider Warehouse Automation?

Before we dive deeper into the how-tos of Warehouse Automation, it is best to start with this question. Suppose you or your warehouse team is often caught up with handling warehousing tasks manually and spending excessive time analyzing data using spreadsheets and paperwork. You could be paying exorbitant amounts of money on labor costs. It is believed that labor costs constitute almost 65% of the overall warehouse operational budget. In any case, it is time you consider using a modern Automated Warehouse system like a Warehouse Management System.

There are a few other signs you should look out for when you want to know if it is time to Automate your Warehouse:


  • You are finding it challenging to fulfill orders on time.
  • Keeping track of inventory data and order information is turning out to be inaccurate.
  • Wrong picking is causing the order error rate to increase.
  • You are finding it difficult to assign tasks to your warehouse staff.
  • There are inaccuracies in inventory cycle counts.
  • You have overstaffed your warehouse to keep up with the orders you receive.
  • Packaging methods are failing and causing Orders to return because of damages.
  • Overhead costs have increased due to repetitive shipping of orders.
  • You find it challenging to engage with your customers and keep them satisfied.


The most important thing to keep in mind is that the challenges mentioned above are pretty standard, and it is very natural to face them if you are an e-commerce business owner. But once you can successfully identify them, you can take appropriate steps like automating your warehouse operations to keep them at bay.

If you need more help identifying and understanding these challenges, we recommend getting in touch with our industry experts.

How Does Automated Warehouse Work?

When you automate your warehouse, advanced software tools like Warehouse Management System and hardware technologies like Robotics and sensors work in synchronization to automate almost every step in the warehouse process. If you already have an existing software tool, you can easily integrate it with the automation system and enhance your workflow.

Automating Warehouses can ensure you are always ready to meet the market's rising demands and provide your customers with the best service possible. In any business, data is absolutely critical. The same goes with warehousing as well. With the automation system capturing real-time data, you can easily analyze data most efficiently.

How to Implement an Automated Warehouse Model?

How to Implement an Automated Warehouse Model?

Like any business model, even the Automated Warehouse Model requires a solid project plan. When developing your Automated Warehouse Model plan, there is no one plan for all ideologies. You will have to understand where your business stands and develop a plan accordingly. But, here are some things you should not miss when planning to Implement an advanced Automated Warehouse Model.

Brainstorm with Your Team

Regardless of the size of your business, you must involve your team and all the stakeholders. Doing so will help you gather insights into what parts of your warehouse need special attention. That is not all; it is also essential to include people with the necessary expertise who can help you ideate in the right direction. It is wise to have third-party industry experts who can help you understand your warehouse needs and recommend suitable business tools to make the Warehouse Automation process smoother.

When you brainstorm with your team, defining your business goals and objectives is vital. If you do not know what you want to achieve, it can get challenging to track your progress after you have automated your warehouse.

Collect and Analyze Data

Data is a valuable resource in any business. Effective Automation of your Warehouse depends on the data you have already gathered from your operations and workflow. It is vital to analyze this data and derive critical takeaways to know precisely where your business stands. Once you get a clearer understanding of what needs your attention, you can strategically plan the automation process for your warehouse by considering various factors like infrastructure and budget.

Understanding Inventory Control

One of the main functions of a warehouse is Inventory Control and Management. Before you begin the Automated Warehouse systems process, you need to understand the operation flow of your inventory management. Data points like inventory cycle count, inventory loss, inventory damages, and inventory movement are essential to systematically planning a model that can amplify your throughput. At this point, analyzing your ecommerce order fulfillment Key Performace Indicators or KPIs can be beneficial as they give you insights into some of the most critical metrics of your business.

In all of the above cases, implementing a powerful Warehouse Management System that includes a top-of-the-line Inventory Management System can do wonders for your business and warehousing model.

Implementing a Warehouse Management System or WMS

A modern Warehousing Management System includes a feature set specially designed to enhance your warehouse workflow. Every step can be systematically carried out from the inbound stage to ensure efficiency and reduced costs. When you implement a feature-rich Warehouse Management System, you gain the ability to automate your warehouse to a whole new level.

In case you already have an existing enterprise software, a modern Warehouse Management System should be able to integrate with your system effortlessly, giving you maximum control and visibility all in one place.

Determining Suitable Warehouse Automation Type

Once you have gathered enough information and defined your goals, the next step is to determine the most suitable automated warehouse systems type. You will have to understand if your objective is to reduce labor costs or expand your warehouse operations. Suppose you want to automate the manual data entry process or implement effective task assignments; you will have to determine what type of Automated warehouse system is optimal for your business. In some instances, choosing a combination of automated warehouse management systems can also be beneficial.

Types of Automated Warehouse System Technologies

Types of Automated Warehouse Technologies

Technology, in general, is evolving rapidly. There are so many innovative solutions out there, and choosing the right one for your business needs is critical. Here are a few notable solutions we believe are a must for Automating your Warehouse. Please note that this list is not limited to the following solutions.

Goods To Person (GTP)

Goods To Person is one of the most popular techniques to transport inventory within the warehouse by implementing equipment like conveyors, carousels, and vertical lift systems. The concept of Goods To Person is straightforward. It enables inventory to flow through various stages without much human interference. With the proper use of Goods To Person, the picking speed of a warehouse can increase more than double.

Automated Storage and Retrieval Systems (AS/RS)

Automated Storage and Retrieval Systems are a type of Goods To Person technology. But the main difference between the two is that Automated Storage and Retrieval Systems are often used in more complex warehouses with space constraints. Research shows that Automated Storage and Retrieval Systems have the potential to improve order picking accuracy levels to above 99.99%. Some of the most common Automated Storage and Retrieval equipment include Tote Shuttle, Material Handling Equipments, and Mini-loaders.

Automated Sortation Systems

Sortation, in simple terms, is the process of identifying which item goes where. An Automated Sortation System uses technologies like Radio Frequency Identification (RFID) to scan the barcode on the items to find the storage locations accurately. Often, this module is equipped with conveyors that help sort the items as efficiently as possible.

Pick To Light and Put To Light Systems

Pick To Light and Put To Light are quite interesting. The mobile barcode scanners are synced with digital displays positioned at storage locations. When an item is scanned or searched for, the system directs the warehouse associate to the exact location, making it easier for the associate to find the storage location for picking or placing the item. Pick To Light and Put To Light Systems significantly reduce the time to search for locations.

Voice Picking and Tasking

Voice Picking and Tasking uses technologies such as speech recognition for warehouse procedures. When the warehouse associate dictates the item attributes to the system using mobile headsets or microphone devices, the system directs the associate in an optimized path to pick or put away the item in question. This significantly reduces the overall time taken to pick up the item or put away. Another vital benefit of Voice Picking and Tasking is that the warehouse associate does not need to hold the RF Handheld device while picking or putting away, which considerably reduces the risk of injury. Research stated that there were almost five injuries for every hundred full-time warehouse employees in 2020, a significant percentage of injuries.

Automatic Guided Vehicles (AGVs)

Automatic Guided Vehicles are a particular variety of warehouse vehicles used to carry inventory around the warehouse floor. Automatic Guided Vehicles are unique because they have very minimal processing power onboard. These vehicles follow a pre-defined path to move around the warehouse using specialized sensors that track a magnetic strip on the warehouse floor. The downside of Automatic Guided Vehicles is that they cannot be used in warehouses with many human movements, which could be the case in a large warehouse scenario.

Autonomous Mobile Robots (AMRs)

Autonomous Mobile Robots are similar to Automatic Guided Vehicles in function. But the main difference between the two is that Autonomous Mobile Robots use GPS to determine optimal routes to move around the warehouse floor. Autonomous Mobile Robots are equipped with advanced laser and infrared sensors that help them detect obstacles and navigate around them. This is where Autonomous Mobile Robots have the edge over Automatic Guided Vehicles - the ability to be used in crowded warehouses with many obstacles.

Challenges Faced in Automated Warehouse Management

Besides countless benefits, there are a few challenges you should know about before you start your Automated Warehouse management journey. One of the biggest challenges is the upfront cost that has to be borne by warehouse owners. This can be looked at as a form of investment that will give you great returns with time, but it is still a significant amount to take lightly.

Another challenge, just like any other equipment, is that they can fail at unexpected times. You will have to schedule timely maintenance routines to ensure they work efficiently. Again, the maintenance cost for all of this is something you will have to keep in mind. It is vital to note that regular audits will have to be conducted to ensure warehouse operations are running as smoothly as possible. It is highly recommended to consult an industry expert during these phases.

Best Practices for Automated Warehouse Management System

Best Practices for Warehouse Automation

At this point in history, it is evident that warehouses are an essential component of the supply chain. Be it any Conglomerate or a Small and Medium-sized e-commerce business, having a well-planned warehouse will help drive commerce forward. Warehouse Automation is no doubt a step that could benefit you massively. Here are a few best practices you should follow to make the most of automatic warehouse:

Evaluate Your Warehouse Layout

Automating your warehouse can easily help you streamline your workflow and improve productivity. But, if there's a flaw in your Warehouse Layout, you will not be able to make the most of your automated warehouse system. Every Warehouse is unique and will require you to intervene differently. You will have to systematically assess the space and understand your warehouse's throughput to know where there is a gap in processing. Once you know what is going on, you can then make the necessary changes to your Warehouse Layout that is logistically optimal for your business needs.

We recommend you consider different layout configurations when evaluating your Warehouse Layout. Go through our article on optimizing your Warehouse Layout to know more.

Implement Latest Technology for Scalability

Regardless of where you invest your resources, it should always focus on scaling your business to the next level. And modern technology can be one such asset. Technology has given rise to many innovative solutions that you can implement to transform warehouse operations. In particular, the Internet of Things (IoT) is one of them. With the ability to communicate virtually with one another, IoT devices can be a great addition to the Warehouse Automation process that can streamline and help you scale your warehouse for improved efficiency.

Take a look at our article to learn more about how the IoT transforms warehouse operations.

Automate Data Analysis

Analyzing Data in any business is critical. If you run an e-commerce business, you already know the importance of tracking specific metrics. Key Performance Indicators or KPIs are sure shot metrics that provide significant insights into how your e-commerce business is performing and where you should shift your focus to make the most of your automatic warehouse process. This is only possible when you have employed a system that captures real-time data actively. That is why it is essential to implement a Warehousing Software that keeps track of these metrics to give you recommendations that could help you increase efficiency.

Implement an Inventory Management System

The fundamental function of a warehouse is to store inventory. As inventory in any business is one of the essential assets, managing them as effectively as possible is critical. When you implement an Inventory Management System, you automatically gain control and visibility of how your inventory is stored in the warehouse. One of the most vital tasks of inventory management is performing cycle counts. When you have automated your warehouse, you systematically use RFID barcode scanners to perform cycle counts.

An article to learn more about Inventory Optimization.

Integrate Robotics to Enhance Warehousing

Implementing Hi-tech Robots can do wonders for the Automated Warehouse system process. It is no surprise that the Robotics Industry is skyrocketing. It is estimated that the Robotics industry will grow by 26% annually to value at over $190 billion by 2025. Almost every other sector employs Robotics in their production line or their warehouses to help them achieve the efficiency and productivity needed to beat their competition. If you want to make the most of your Warehouse Automation, investing in modern Robotics can be game-changing.

We recommend you read our take on how Robotics can enhance your warehousing operations

Implement an Advanced Warehouse Management System

If you've made it here, you probably might have guessed already that automatic warehouse is only as good as your Warehouse Management System. As of 2020, over 72% of warehouse managers and owners believe the Warehouse Management System is the preferred software for streamlining warehouse operations. That is why it is critical to implement an advanced Warehouse Management System that can help you streamline your warehouse operations.

A modern Warehouse Management System should have the ability to manage inventory effectively and analyze real-time data while giving you the power to customize based on your business needs efficiently. An advanced Warehouse Management System gives you the ability to integrate the latest technology, such as the Internet of Things and Robotics, with minimal effort. It should give you complete control and visibility of all your warehouse operations, all in one place.

Benefits of Automating Your Warehouse

As mentioned throughout the article, Warehouse Automation has so many benefits. Here are a few that are noteworthy:


  • It increases efficiency and productivity.
  • Optimized warehouse space.
  • Increased warehouse throughput.
  • Improved employee satisfaction.
  • Improved customer service.
  • Reduced human error.
  • Efficient resource utilization.
  • Reduced operations cost.
  • Better control over inventory.
  • Minimal order error rate.
  • Reduced shipping costs.
  • Minimized manual labor.
  • Reduced storage expenses.
  • Improved on-time shipping rate.
  • Maximized warehouse safety.
  • Reduced inventory stockouts.
  • Accurate data collection and analysis.
  • Maximized control over warehouse equipment.
  • Enhanced material handling capabilities.
  • Reduced Order return rate.
  • Improved Order picking accuracy.
  • Maximized order fulfillment rate.


We at Hopstack believe in adapting modern technology to automate every stage of the warehousing process. We understand the challenges warehouse owners have to face when running a business. We provide companies with robust Warehouse Management Systems that help them take their warehousing game to a whole new level.

Schedule a demo with our industry experts to know more!

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