The vision is seductive: gleaming robots gliding through vast warehouse spaces, a perfect symphony of efficiency and data-driven decisions. Automation, we’re often told, is the solution for today’s logistics challenges, promising cost savings, supercharged productivity and flawless accuracy. For many, the initial journey into automation has brought tangible benefits.
But beneath the surface of this technological revolution lies a complex reality. While the upfront investment, the need for new skillsets and basic WMS / ERP integration are well documented discussion points, true, sustained optimisation in warehouse automation is filled with less obvious challenges that can quietly erode ROI, impact agility and leave even the most sophisticated operations wondering why their multi-million dollar systems aren’t delivering on their full potential.
Rigidity vs Agility
Traditional, large-scale automation is engineered for stability and high-volume throughput of predictable goods. It excels when order profiles and demand is consistent. But we operate in an era of unprecedented volatility. From sudden increases in demand thanks to viral TikTok trends to unexpected supply chain disruptions combined with the constant pressure for hyper-personalisation means that the world of ecommerce logistics is no longer steady or predictable.
Businesses are starting to realise that an inability to adapt quickly can be more costly than minor operational efficiencies. Modular, scalable and easily reconfigurable automation solutions and intelligent systems that can dynamically reroute flow based on real time conditions are now key to success. Without these, your automation may be built for a world that no longer exists.
At THG Fulfil, we have invested over £70m in our automation to deliver industry-leading performance, efficiency and scalability across every stage. We have partnered with industry-leading automation solution providers including Autostore, Geek+ and Libiao and push the boundaries beyond standard automation capabilities, leveraging advanced optimisation techniques to maximise efficiency and performance.
The Boomerang Effect
Ecommerce has reshaped consumer behaviour, with shoppers expecting free, easy and seamless returns as standard. The challenge for retailers is balancing these evolving expectations with the rising costs of reverse logistics.
Admittedly, warehouse automation has made significant strides in optimising outbound flow (picking, packing and shipping), the challenges arise when confronted with the unpredictable nature of returns. Products can come back in varying conditions, often without original packaging, sometimes damaged, sometimes as new. They require inspection, grading and decisions on disposition (restock, refurbish, liquidate, recycle). This process is inherently less standardised and more judgement-based than outbound fulfilment. Most automation systems are designed for the uniformity of new products flowing out and are therefore ill-equipped to efficiently handle this diverse inbound stream. Manual processing requires significant cost and can be an efficiency challenge for highly automated facilities.
Specialised automation, AI-powered inspection processes and intelligent routing for returns processing is essential for retailers to be at the forefront of solving what is currently a multi-million-dollar industry problem.
Information Rich, Insight Poor
It’s no secret that modern automated systems are data-generating powerhouses, with sensors, robotic controllers and vision systems churning out terabytes of information. The promise is a data-driven operation.
The challenge in logistics is that often this valuable data remains siloed within individual vendor systems. Even with a WMS or ERP, achieving true interoperability and translating raw data into actionable insights that benefit the entire supply chain network is a monumental task. It’s not just about optimising picking paths within the warehouse, it’s about using the data to dynamically adjust transportation plans, inform inventory deployment or even provide proactive updates direct to the consumer informing them about potential delays. This requires a complex level of data integration, with retailers actively seeking out end-to-end visibility and control.
We have invested millions of development hours into building proprietary technology that controls and optimises every part of the fulfilment and delivery journey. Our optimization strategy begins even before products arrive at the warehouse. We analyse key characteristics of inbound inventory, delivery profiles, and opportunities to reduce costs at every stage of the supply chain. Our data teams employ advanced algorithms, incorporating graph theory, mathematical modelling, and proprietary THG Fulfil intelligence to determine the most efficient logic. Our data scientists collaborate closely with operational excellence teams to simulate and test modifications in real time, ensuring measurable benefits before implementation. This not only reduces costs and improves storage capacity but also strengthens our outbound strategy, ensuring seamless operations throughout the year.
Delivering Genuine Automation Optimisation
Overcoming these challenges is about approaching automation with a more strategic, holistic and forward-looking mindset. The journey to fully optimised warehouse automation is complex, but by acknowledging and addressing these challenges, we move beyond simply installing robots to truly transforming operations, building resilience and forging a genuine competitive advantage in an increasingly demanding world. The future of logistics belongs not just to the automated, but to the intelligently and adaptively automated.
