Supply chain leaders face increasing pressure to keep up with demand, reduce costs, and enhance service levels, all while remaining flexible to market shifts.
Automation is often seen as the answer, but implementing it effectively is not as simple as replacing human labour with machines. Unlike people, automation thrives in structured environments and requires careful alignment with business strategy to deliver real value.
While automation is becoming a frequent topic in Board conversations, many businesses have a shortage of in-house capability to develop strategy and drive implementation within their Business as Usual (BAU) teams. A successful automation strategy isn't about forcing technology into existing operations; it’s about designing automation around the core principles discussed below to maximise return on investment (ROI) and future-proof supply chain investments.
Understand your business: Start with strategy, not technology
Before deploying automation, businesses must first define their strategic goals:
- Where is our customer, and how do we meet them?
- What constraints exist in current supply network or fulfilment models?
- Is the goal to improve service levels, optimise order accuracy, reduce labour dependency, increase space utilisation or provide distribution/sales capacity to meet future growth?
- How does automation fit into long-term commercial objectives?
- What level of investment is justified, and are there better options for capital allocation?
Companies take an inside-out approach – designing automation to fit their current infrastructure rather than starting with customer expectations, business growth, and service requirements. A structured approach ensures automation aligns with core business drivers, rather than simply addressing operational constraints.
Flexibility: Automation must adapt to business needs
Not all automation is created equal. The ability to adapt to different business models, fulfilment channels, and customer needs is critical. Businesses, particularly in retail and e-commerce, face fluctuating demand, product mix shifts, and service level changes. Automation investments must be flexible enough to support these evolving requirements.
Modular and scalable automation solutions, such as Autonomous Mobile Robots (AMRs) or Robots-as-a-Service (RaaS) models, offer flexibility, allowing businesses to scale operations without excessive capital investment or fixed infrastructure such as conveyor sortation systems. In contrast, where product homogeneity, predictable scale of volume and stable network requirements exist, more rigid automation such as compact automated storage and retrieval system (ASRS) and shuttle systems can bring even greater cost reduction, space utilisation and ROI. Striking the right balance between flexibility and structure ensures automation solutions support both immediate needs and long-term growth.
Scalability: Preparing for growth and seasonal peaks
Retail and e-commerce supply chains rarely operate in a steady-state environment. Seasonal peaks, promotional surges, and long-term business expansion demand logistics systems that can scale efficiently. Key considerations include:
- Can automation handle stock keeping unit (SKU) growth, product mix change and order velocity changes?
- Is there enough capacity to support peak periods, both daily and seasonally?
- Can solutions be incrementally expanded rather than requiring a full rebuild?
Investing in scalable automation and flexible material handling systems allows supply chains to meet demand without excessive costs or disruptions.
Futureproofing: Invest without regret
One of the biggest risks in automation is investing in solutions that quickly become obsolete, inflexible, or misaligned with business needs. To futureproof supply chains, businesses should:
- Assess whether the automation can adapt to changing consumer fulfilment preference.
- Consider Total Cost of Ownership (TCO), not just capital expenditure – factoring in depreciation, maintenance, energy consumption, operational and upgrade costs.
- Avoid technology debt by selecting interoperable systems that integrate with existing platforms and emerging technologies.
- Ensure the solution remains relevant as the business grows or changes its fulfilment strategy.
- Determine the investment is right-sized, allowing for incremental investment as the business landscape changes.
By designing automation solutions with the future in mind, companies can increase efficiency without locking themselves into rigid or short-lived solutions, ensuring investments drive lasting value.
Simplicity: Design for operational usability
Overly complex automation systems can create more problems than business leaders anticipate. The best solutions are straightforward, easy to manage, and aligned with operational needs. This includes:
- Avoiding unnecessary technology layers – automation should streamline, not complicate. Every new line of code that is created becomes a risk and needs to be supported.
- Validating processes and solution architecture through detailed operating modelling before implementation.
- Where possible, minimising integration complexity by limiting the number of different automation technologies within a single facility. This can provide greater adoption rates across technology and users while providing an easier path to business case benefits.
By focusing on simplicity in design and execution, businesses can ensure automation enhances operations, as well as reduces maintenance requirements and risk.
Case study: Scalable automation
Problem:
An ASX-listed retailer faced capacity constraints and rising costs in its ageing distribution centre (DC). Limited access to capital required a phased investment approach to improve efficiency without disrupting operations.
Solution:
Our team designed and executed a transformation strategy for a next-generation DC with a modular automation strategy. To support future growth whilst limiting upfront costs, a Robots as a Service (RaaS) solution was selected. The DC design incorporated expansion space, allowing for additional automation investments to be made in the future as cash flow permitted, without disrupting the DC’s operation.
Outcome:
The transformation reduced labour costs by 40% improved operational efficiency, and provided a flexible, future-ready supply chain aligned with the retailer’s long-term growth strategy.
Next steps
Automation is not a one-size-fits-all solution. It must align with business strategy, operational realities, and future growth plans. The right approach balances flexibility, scalability, and investment risk to ensure automation delivers lasting value rather than becoming a costly constraint.
If you're looking to integrate automation into your supply chain, reach out to us to discuss how a to best maximise your investment and futureproof your operations.
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