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Businesses are set to invest over their annual warehousing costs into automation to boost productivity
Two fifths (42%) of businesses across manufacturing, retail and 3PLs are planning to invest equal to or more than their annual warehousing costs on automation over the next five years, according to new research.
In Scala’s New Report looking at the rise of robotics and automation in the supply chain, significantly, 6% of respondents said they are planning on spending more than double their annual warehousing costs on automation, over the same period.
A third of businesses (33%) surveyed are planning to spend between £1m and £5m in automation in the foreseeable future. Whilst 13% of businesses are committed to spending between £5m and £20m, and almost a quarter (23%) are willing to invest more than £20m.
Scepticism appears relatively low with just 12% of respondents stating that they were not planning to invest in automation at all in the foreseeable future.
The reasons given for future investment in automation include three key drivers; warehouse staff availability/costs, increasing operational efficiency and increasing capability to meet future growth. All three challenges were cited by over 80% of respondents.
These plans are despite the majority of respondents being in the early stages of automation with 37% having invested less than £1m in automation to date.
John Perry, Scala’s managing director commented: “More than ever, historical thinking and ways of working are no longer fit for purpose for future supply chains. Flexibility and resilience have become business critical.
“Considering the ongoing geopolitical and financial challenges facing global supply chains stemming from the crisis in Ukraine, Brexit, the pandemic and inflationary prices, it may seem surprising that companies are looking at serious investment into warehouse robotics and automation. However, the need to meet the changing marketplace without remaining at the mercy of ongoing staff shortages, high costs and reduced productivity are big drivers.
“The level of potential investment is staggering for an industry that is often criticised for being late to technological developments. With the total annual warehouse operations cost of those surveyed being £520m, and the expectation that the equivalent of £470m will be invested in automation over the next five years, if replicated across the industry, this represents a huge and evidently necessary investment.”
About Scala
SCALA Consulting was founded in 2001 and has earned an excellent industry reputation for providing high-quality supply chain and logistics expertise. The company now has an executive board of directors, all of whom have senior level business experience.
SCALA consultants work with many leading international companies. It is our approach to create partnerships with clients, combining our external experience and expertise with our client’s own business knowledge to deliver practical solutions in order to meet future commercial requirements and drive real tangible benefits.
SCALA Consulting is focused on ensuring that all our projects are carried out with sustainability and environmental factors as part of any decision-making process.
SCALA’s experienced team is passionate about innovating supply chain improvements and providing independent objective expertise with professionalism, diligence, and integrity.
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