Automation and Logistics Real Estate #1: The State of Automation in Supply Chains
November 2020 | Prologis
Automation has the power to revolutionize logistics operations. As capabilities expand alongside declining costs, faster returns on investment (ROIs) are fueling adoption. Three trends are aligning to drive higher levels of automation within our facilities. First, COVID has led to greater absenteeism, further stressing labor availability. Second, technology continues to improve, expanding capabilities and reducing costs. Third, labor-intensive operations, specifically e-commerce, are growing quickly. These users benefit greatly from this technology and are leading adopters.
This dramatic transformation cannot be overstated: What was expected to take years to gain traction is occurring in mere months. As a result, some logistics customers are making significant investments in automation. In this report, the first in a series, we examine the current state of warehouse automation, how it is changing, and impacts on desired building features. Highlights include:
• Automation adoption is currently limited in logistics facilities due to high cost, low flexibility and slow ROIs. Move-in costs for fully automated facilities are 4-5x higher than no-to-low automation move-in costs.1 Additional factors include difficulties in planning and the need for operational flexibility, as well as realities around downtime and integration during implementation.
