The warehouse automation market is booming, projected to reach $41 billion by 2027 with a compound annual growth rate of nearly 15%. With autonomous mobile robots improving productivity 2-3X and reducing labor costs by half, it's no wonder that businesses are accelerating their warehouse modernization efforts.
But here's the sobering reality: up to 50% of initial automation implementations fail to meet their intended goals. One consumer goods company invested over $150 million on an automation project that ended up largely unused due to inaccurate forecasts and poor planning.
The difference between success and failure isn't the technology itself; it's the preparation. Before you invest in automation, you need to lay the groundwork that ensures your project delivers the transformational results you're expecting.
This comprehensive guide will walk you through the seven critical steps to complete before implementing warehouse automation, ensuring you're truly ready to maximize your investment and avoid costly mistakes.
Want the complete implementation toolkit? Download our premium Automation Readiness Guide with detailed checklists, templates, ROI calculators, and a one-page executive summary you can use in your next meeting.
1. Data, Data, Data: Build Your Foundation on Accuracy
Why It Matters: Garbage in, garbage out. Your automation solution is only as good as the data it's built upon.
When someone designs an automated solution for your warehouse, they're relying entirely on the numbers you provide. If those numbers are wrong (whether it's inventory counts, order volumes, SKU velocity, or throughput metrics) the entire solution will be fundamentally flawed from day one.
Think of it this way: would you build a house on quicksand? That's essentially what you're doing when you automate based on inaccurate data. The system will be designed to solve problems you don't actually have while missing the real bottlenecks in your operation.
What Data Do You Need?
The foundation of any successful automation project requires comprehensive, accurate data across multiple categories:
Inventory and SKU Data: Without accurate inventory counts and detailed SKU information, your automation system cannot be properly sized or configured. You need to know what you're storing, how much of it, and how it moves through your facility.
Order Volume and Patterns: Historical order data (ideally 12-24 months minimum) reveals patterns that impact automation design. Are there seasonal peaks? Do certain products always ship together? What are your average and peak order volumes?
Throughput and Performance Metrics: Current productivity rates, picks per hour, order cycle times, and error rates establish your baseline. Without knowing where you are today, you can't measure improvement or set realistic goals.
Space Utilization: Understanding your current footprint usage, storage density, and workflow patterns helps determine what type of automation fits your facility and whether expansion is needed.
Labor Metrics: Staffing levels across shifts, overtime patterns, and labor costs per unit provide crucial input for ROI calculations and system justification.
The Cost of Bad Data
Industry experts consistently identify inaccurate data as one of the top reasons automation projects fail. When that $150 million project went largely unused, investigators found that inaccurate forecasts and misaligned facility usage were primary culprits.
Without clean, accurate data, even the most sophisticated automation solution will underperform. The time invested in data accuracy upfront will save months of headaches and potentially millions of dollars later.
Download Warehouse Automation Toolkit to ensure you're capturing everything automation providers need to design the right solution.
2. Define Clear Strategic and Operational Goals
Why It Matters: Automation without clear objectives is like driving without a destination. You'll burn resources without knowing if you're getting anywhere.
According to industry research, 61% of organizations cite change management (not hardware) as the single biggest obstacle to automation success. This often stems from misaligned expectations about what automation can deliver and how quickly.
Strategic vs. Operational Goals
You need defined goals at multiple levels. Strategic goals align with your long-term business vision, while operational goals address specific pain points in your daily operations. It is vital that all stakeholders are involved early on as changes late in the game can be costly.
Strategic goals typically focus on business enablement: supporting growth without proportional headcount increases, improving customer satisfaction, enabling new business models like same-day delivery, or reducing dependency on tight labor markets.
Operational goals address specific metrics: reducing order cycle time, increasing accuracy rates, improving safety metrics, reducing cost per order, or increasing throughput capacity.
Both types of goals are essential. Strategic goals secure executive buy-in and funding, while operational goals keep your warehouse team engaged and focused on tangible improvements.
Setting Measurable Goals
Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART). Vague aspirations like "improve efficiency" won't drive results. Instead, aim for concrete targets like:
- Increase throughput by 40% within 12 months of go-live
- Achieve 99.9% order accuracy within 6 months
- Reduce picking labor costs by 50% within the first year
- Support 2X order volume growth without adding warehouse space
- Reduce workplace injuries by 75% in first 18 months
Document both your current baseline metrics and your target goals. This creates accountability and provides a clear measure of success that everyone can rally around.
Access our Warehouse Automation Toolkit to define and align your strategic and operational objectives.
3. Establish a Realistic Budget
Why It Matters: Understanding the true cost of automation and securing appropriate funding is critical to project success.
Understanding ROI Expectations
Remember, autonomous mobile robots typically deliver payback in 12-18 months with ROI calculations showing strong returns. However, this assumes proper planning and execution.
Your ROI calculation should account for both hard and soft benefits:
Hard benefits include direct labor savings, reduced error costs, decreased overtime, and lower injury-related expenses.
Soft benefits might include improved employee satisfaction, enhanced customer service, increased capacity for growth, and better data visibility for decision-making.
Budget Reality Check
Companies plan to increase their investment in automation significantly over the next five years, reaching 25% of capital spending on average. In logistics and fulfillment specifically, automation is expected to account for more than a third of capital spending.
Here's what comprises a typical automation budget:
Hardware typically represents 58% of total automation investment. This includes conveyor systems, robotics, automated storage and retrieval systems (AS/RS), sortation equipment, and material handling equipment.
Software adoption is growing at a 17% CAGR and represents an increasingly important portion of total investment. The software layer orchestrates hardware, integrates with your WMS and ERP, and provides the intelligence that makes automation truly effective.
Installation and integration costs often add 20-30% to hardware expenses. These include site preparation, system integration, testing, and commissioning.
Training and change management are frequently underestimated but critical to success. Budget accordingly.
Ongoing maintenance and support typically runs 10-15% of initial investment annually.
Finally, always include a contingency fund of at least 15-20% for unexpected challenges that inevitably arise.
The Hidden Costs
Beyond the obvious expenses, consider:
- Lost productivity during implementation and ramp-up
- Temporary labor to supplement during transition
- Potential customer service impacts if not managed properly
- Internal project management time and resources
- Data cleanup and system integration work
Do your homework and understand what a realistic budget looks like for your specific needs. Talk to multiple integrators, research case studies in your industry, and avoid the trap of comparing your operation to companies with vastly different scales or requirements.
Access our Warehouse Automation Toolkit to estimate your potential returns based on your specific operational data and automation goals.
4. Invest in the Right Software
Why It Matters: Hardware without intelligent orchestration software is like having a Ferrari without a steering wheel. The best automation requires the best brain to control it.
The Critical Role of WES
A Warehouse Execution System (WES) is the intelligence layer that sits between your Warehouse Management System (WMS) and your automation equipment. While many companies focus heavily on hardware selection, the software that orchestrates everything is equally (if not more) important.
Here's what many operations discover the hard way: WES can do what a WCS (Warehouse Control System) can do, and does things a WMS often says it can, but cannot.
What WES Does That Other Systems Can't
Real-Time Decision Making: WES makes split-second decisions about which automation resource handles which task, optimizing throughput and balancing workload across your entire system. Your WMS issues orders; WES determines the most efficient way to execute them.
Multi-System Orchestration: Modern warehouses often have multiple automation technologies (conveyors, sorters, AMRs, AS/RS, pick-to-light, etc.). WES orchestrates all of them together as one cohesive system, something WMS and WCS struggle to do effectively.
Dynamic Task Allocation: WES continuously evaluates system performance and dynamically adjusts task allocation based on real-time conditions. If one zone is overloaded while another is idle, WES rebalances automatically.
Performance Analytics: WES provides detailed visibility into automation performance, bottlenecks, and opportunities for optimization that your WMS simply can't see at the execution level.
Why Your WMS Isn't Enough
Many WMS vendors claim they can handle automation orchestration. In reality, WMS is designed for inventory management and order management, not real-time equipment control and task optimization. Adding automation orchestration as a "feature" to WMS often results in:
- Slower response times (WMS operates in minutes, WES operates in seconds or milliseconds)
- Limited ability to handle complex multi-system automation
- Inflexibility when you want to change or add automation equipment
- Vendor lock-in if your WMS provider controls your automation orchestration
The New Dawn Advantage
When evaluating WES solutions, consider proven platforms like Conveyco's New Dawn. A robust WES solution provides:
- Vendor-agnostic orchestration that works with any automation hardware, protecting your investment and giving you flexibility
- Real-time optimization that maximizes the performance of your automation investment
- Scalability to grow with your operation as you add capabilities
- Advanced analytics that turn operational data into actionable insights
- Proven track record in complex, multi-technology automation environments
The Bottom Line
Don't make the mistake of treating WES as an afterthought. The most sophisticated automation hardware will underperform without intelligent orchestration software. Budget for best-in-class WES from the beginning, and ensure your automation partner has deep expertise in WES implementation and optimization.
Think of it this way: your automation hardware is your investment in capability, but your WES is your investment in performance. You need both.
Learn how to select a great WES in our comprehensive Warehouse Readiness Toolkit
6. Identify and Align Your Project Team
Why It Matters: Even the best technology will fail without the right team driving implementation and adoption.
According to McKinsey research, automation projects often fail due to "lack of cohesive vision, poor understanding of automation technology by leadership, and misalignment of beliefs and principles within the organization."
Who Needs to Be on Your Team?
A successful automation project requires cross-functional collaboration. Your project team should represent every area impacted by the automation, from executive leadership to warehouse floor operations.
At the executive level, you need a sponsor with budget authority and strategic vision who can remove organizational obstacles. This person champions the project at the highest levels and ensures it aligns with broader business objectives.
Your operations lead (warehouse manager or operations director) understands daily workflows, current pain points, and team dynamics. They're essential for ensuring the solution addresses real operational needs, not just theoretical improvements.
IT representation is critical for addressing system integration, data requirements, and technical infrastructure. Automation doesn't exist in isolation; it must communicate with your WMS, ERP, and other systems.
Finance representation ensures proper ROI tracking, budget management, and financial impact evaluation. They also help build the business case that secures funding.
HR or training coordination manages the people side of change, including communication, training programs, and addressing employee concerns about job security and role changes.
Floor supervisors and team leads bring ground-level insights and will be implementing the system daily. Their buy-in is essential for user adoption. See #4 about the importance of Change Management.
Critical Success Factors
Clear roles and responsibilities ensure everyone knows what they're accountable for and prevents gaps or overlaps.
Decision-making authority matters tremendously. Teams bogged down in approval processes struggle to maintain momentum and respond to challenges quickly.
Time commitment is non-negotiable. Team members need protected time to work on the project, not just "fit it in" around regular jobs.
Aligned vision means everyone agrees on what success looks like before moving forward. Misalignment here causes friction throughout the project.
Technical understanding doesn't mean everyone needs to be an expert, but leadership should invest time in understanding automation capabilities and limitations to make informed decisions.
As referred to earlier in this article, one company's $150 million project failed because forecasts were inaccurate. Due to these mistakes, the facility ended up being used differently than planned. A properly aligned project team would have caught these misalignments early.
Get the Warehouse Automation Readiness Toolkit with role definitions, responsibilities matrix, and team alignment tools to ensure your project starts with the right foundation.
7. Implement a Robust Change Management Strategy
Why It Matters: Technology doesn't fail automation projects; people do. Or more accurately, the failure to properly manage organizational change does.
Research shows that 62% of respondents reported human error from manual process management as the number one root cause of inventory fulfillment issues. Automation can solve this, but only if your team embraces it.
Why Change Management Matters
The team that will be using the automation must be included in the process from the beginning. These are the people who know where the real pain points are, what workarounds exist, and where the current system falls short. Their buy-in isn't just nice to have; it's essential.
The Four Phases of Change Management
- Discovery and Involvement starts by gathering input from your warehouse team about their daily headaches, bottlenecks, existing workarounds, frustrating or dangerous tasks, and what would make their jobs easier. This serves two purposes: you get valuable operational insights, and your team starts to feel ownership of the solution.
- Communication and Transparency happen throughout technology selection and implementation. Explain what is being done and why. Be clear about benefits, specifically emphasizing "this will make your job better, not eliminate it." Address fears head-on, especially about job security. Share timelines and what to expect at each phase. Celebrate milestones and early wins.
- Training and Support acknowledge that no one likes learning new things when they're comfortable with the old way. That's human nature. But you can smooth this transition with comprehensive training well before go-live, different learning formats (hands-on, video, written guides, one-on-one), identification of "super users" who can help their peers, longer learning curves than you think you need, extra support during initial weeks after launch, and honest acknowledgment that challenges will arise with assurance that things will improve.
- Continuous Feedback Loop keeps communication channels open after implementation. Actively solicit feedback on what's working and what isn't. Make adjustments based on user input. Continue to recognize and celebrate improvements.
Addressing Job Security Concerns
One of the biggest fears surrounding automation is job loss. Be honest and transparent: automation typically eliminates tasks, not jobs. It removes repetitive, physically demanding, or dangerous work, allowing employees to focus on higher-value activities that require human judgment and problem-solving.
In today's tight labor market, many warehouses struggle to fill positions. Automation can help retain employees by making jobs safer, less physically demanding, and more engaging. Frame automation as a tool that makes your team more effective, not one that replaces them.
Keep your team involved and informed at every step. Their success is your success.
Download the Warehouse Toolkit with communication templates, training frameworks, and strategies for building buy-in across your organization.
7. Prepare for Downtime and Operational Disruption
Why It Matters: Large automation projects, especially in existing (brownfield) facilities, can significantly impact operations. Being unprepared for this disruption can lead to missed orders, unhappy customers, and internal chaos.
A glitch in online retail giant ASOS's automated warehouse management system caused a backlog that cost the company upwards of $31 million. Similarly, UK supermarket chain Sainsbury's experienced warehouse automation failure that contributed to a pre-tax loss of £39 million, the worst in the company's 139-year history.
These weren't technology failures; they were failures to adequately plan for the disruption and have contingency measures in place.
What to Expect During Implementation
For brownfield automation projects, expect reduced capacity during installation and testing phases. Footprint changes may temporarily limit storage or workflow areas. Possible shutdowns of facility sections (or the entire facility) during critical installation phases are common. Learning curve impacts mean productivity typically dips before improving. Integration testing periods may see systems not performing at full capacity.
Questions to Ask Your Integrator
Before committing to a project, get realistic answers about:
- Timeline from contract to full operational capacity
- Which phases will impact daily operations
- Whether installation can occur in phases to minimize disruption
- Expected capacity during each phase
- How long training will take before teams reach previous productivity levels
- What contingency plans exist if installation takes longer than expected
- Whether temporary shutdown periods are required, when, and for how long
Creating Your Disruption Management Plan
Proactive planning minimizes impact and maintains customer relationships. Key strategies include:
- Communicating with customers early if you anticipate service disruptions. Proactive communication preserves relationships and allows customers to plan accordingly.
- Building inventory buffers before major disruption phases provides a cushion during reduced capacity periods.
- Adjusting commitments by considering reduced order volumes or extended delivery windows during critical phases helps set realistic expectations.
- Planning for alternative fulfillment through temporary outsourcing or alternative facilities provides backup capacity if needed.
- Staffing appropriately, as you may need extra hands during transition periods to maintain service levels while teams are learning new systems.
- Setting realistic internal expectations so leadership understands that short-term dips in performance are normal and expected.
- Don't be caught off guard. Realistic expectations and solid contingency plans are your insurance policy against costly surprises.
Access our Warehouse Automation Toolkit to build a comprehensive plan that keeps your operation running smoothly during implementation.
8. Choose a Partner, Not Just a Solution
Why It Matters: Automation is a long-term commitment that can completely transform your business, but no project goes perfectly. You need a partner who will stand by you through challenges, not just a vendor who sells you equipment and disappears.
What to Look for in an Automation Partner
- Experience and track record Look for years in business and financial stability, relevant industry experience at your scale, customer references you can actually talk to, and case studies that demonstrate problem-solving ability, not just successful installations.
- Technical expertise and innovation ensure your partner can support your needs long-term. Seek deep understanding of multiple technologies (not just pushing one solution), ability to integrate with your existing systems (WMS, ERP, etc.), investment in R&D and staying current with technology, and strong software capabilities (the intelligence layer that orchestrates everything).
- Partnership approach distinguishes true partners from transactional vendors. Look for willingness to understand your business (not just push products), collaborative design process that includes your team, transparency about capabilities and limitations, and realistic timelines with honest communication about risks.
- Support and service infrastructure determines whether you'll get help when you need it. Evaluate post-implementation support structure, response time guarantees for critical issues, training programs and resources, preventive maintenance offerings, and spare parts availability.
- Scalability and flexibility ensure your investment grows with your business. Seek solutions that can expand with your needs, technology that isn't locked into a single vendor ecosystem, modular approaches that allow phased implementation, and ability to adapt to changing business needs.
Red Flags to Watch For
Be wary of providers who:
- Push a single technology as the answer to everything
Ask them to explain why that specific technology is the best fit for your unique needs and what alternatives they considered. A strong partner should tailor solutions, not force a one-size-fits-all approach. - Show unwillingness to work with your existing systems or vendors without reason
Request specific technical or business reasons for their hesitation. A good integrator should collaborate and adapt to your environment, not demand a clean slate. - Make customer references hard to obtain or verify
Insist on speaking directly with recent customers in your industry or with similar project scope. If they avoid this, it’s a red flag worth exploring further. - Focus only on hardware without discussing software integration
Ask them to walk you through how their hardware communicates with your WMS, WCS, or ERP systems. The right partner should prioritize seamless integration over equipment sales. - Make unrealistic promises about timeline or performance
Push for a detailed project plan with milestones, dependencies, and contingencies. Ask for examples of similar projects they’ve completed on schedule. - Show inability or unwillingness to provide detailed documentation
Request sample documentation—such as design drawings, test plans, or user manuals—from past projects. Transparency and documentation discipline are hallmarks of a quality integrator. - Offer pricing that is significantly cheaper than other bids
Ask for a detailed cost breakdown and confirm what’s included or excluded. Extremely low bids often omit critical components, services, or support that will cost more later.
The True Cost of Choosing Wrong
Unfortunately, too many implementations fail to meet their intended goals. This failure rarely lies with faulty technology; it lies with vision, integration, and strategy.
When the Sainsbury's project failed, it was found that outsourcing left top management with minimal hands-on involvement, inadequate monitoring, and lack of ownership. The relationship between the company and its technology partner deteriorated, making recovery even harder.
In contrast, companies that choose the right partner experience smooth implementation with proactive problem-solving, continuous optimization after go-live, long-term relationships that evolve with business needs, and confidence that someone has their back when challenges arise.
Remember: the initial sale is just the beginning. You're not buying equipment; you're entering a relationship that will span years or even decades. Choose wisely.
9. Embrace Continuous Improvement: There Is No Finish Line
Why It Matters: Automation isn't a destination; it's a journey of ongoing optimization, evolution, and improvement.
Many companies make the mistake of thinking automation is a one-time project: Install the system, flip the switch, and you're done. But the most successful automation implementations are those that view it as a continuous process of getting better, smarter, and faster.
The Evolution of Automation
Year 1 focuses on learning and optimization. Fine-tune workflows based on real-world use. Adjust parameters to match actual (versus projected) demand patterns. Train new employees. Identify unexpected bottlenecks or opportunities.
Years 2-3 emphasize expansion and enhancement. Add capabilities based on operational experience. Integrate new technologies as they become available. Scale to handle business growth. Optimize based on accumulated data.
Years 4+ drive transformation and innovation. Rethink processes that automation enables. Explore new business models your automation supports. Continuous technology refresh to stay competitive. Leverage AI and analytics for predictive optimization.
What This Requires from Your Partner
A great automation partner doesn't just install equipment and wish you luck. They provide ongoing support and optimization services through regular check-ins, performance reviews, and recommendations for improvement. They offer technology guidance, helping you understand how emerging technologies can benefit your operation. They facilitate continuous training as your team evolves. They remain accessible for the long term, years down the road when you're ready to expand or need to troubleshoot an issue.
The Competitive Advantage
The global warehouse automation market is growing at nearly 15% annually. By 2027, it's expected to reach $41 billion. Companies that view automation as continuous improvement rather than a one-time project will stay ahead of competitors, adapt faster to market changes, maximize their return on investment, build increasingly efficient operations, and create a culture of innovation and improvement.
There really is no finish line with automation. It's always about progress: getting better, smarter, and faster. When you work with the right partner, they'll be there with you every step of the way, continuing to deliver value for years to come.
Ready to Start Your Automation Journey?
You've learned the seven critical steps to prepare for warehouse automation success. But knowing what to do and actually doing it are two different things.
Get the Complete Implementation Toolkit
Download our Premium Automation Readiness Guide and receive:
- Quick-reference checklists
- ROI calculator template
- Goal-setting worksheet
- Project team framework
- One-page executive decision brief
Ready to automate but can't get management on board ?
Download the Warehouse Automation Readiness Toolkit: Alternative Approaches If Facing Pushback
Partner with Conveyco
At Conveyco, we understand that successful warehouse automation goes far beyond technology; it's about partnership, preparation, and continuous commitment to your success.
We've helped countless businesses navigate the complex journey from manual operations to optimized automated facilities. We know the pitfalls, the challenges, and most importantly, how to avoid them. Our approach is built on the seven principles outlined in this guide because we've seen, firsthand, what separates successful implementations from costly failures.
Why Choose Conveyco
We're with you from day one. From data assessment to implementation and beyond, we're your partner at every step.
We prioritize your success. Our solutions are designed around your specific needs, not our product catalog.
We stand by our work. When challenges arise (and they will), we're there to solve them together.
We think long-term. Automation is a journey, and we're committed to growing and evolving with your business.
We deliver results. Our customers see real ROI, improved operations, and long-term competitive advantage.
How We Can Help Whether you're just starting to think about automation, working through your readiness checklist, or ready to move forward with implementation, Conveyco is here to help.
