Dematic, a global leader in supply chain automation, has today launched The UK’s Automation Tipping Point, a new study examining how labour shortages, constrained real estate, heightened consumer expectations, and the rapid emergence of artificial intelligence (AI) are forcing a strategic rethink of automation across the UK warehousing sector. Exploring the technologies and trends in play, the study shows how organisations can make smarter, more flexible supply chain decisions at a time when both operational pressure and the cost of getting it wrong have never been higher.
Based on insights from experts across the industry – including 3PLs, industry bodies, consultants and automation end-users, as well as the UK Warehousing Association, and DHL Supply Chain – the study highlights how automation is evolving from a traditional engineering function into one which spans technology, data and operations. It also sets out practical recommendations to help organisations plan for and respond to this shift.
AI adds resilience but won’t replace humans
AI is becoming increasingly embedded across warehouse operations. But, according to the experts interviewed, it will neither remove the need for human staff on the warehouse floor, nor solve labour shortages on its own, particularly in complex and variable environments.
Instead, AI will deliver value as an enabler of smarter, more resilient operations. Simulations such as digital twins will help organisations model scenarios, stress-test performance and respond more effectively to external shocks, from supply disruption to sudden demand volatility.
The growing use of AI will also reshape the skills needed for warehousing, increasing demand for specialist talent or “warehouse scientists”, those who can validate and translate insights from data into operational decisions.
“We’re at an inflection point. Consumer expectations are higher than ever, supply chains are volatile and labour is scarce. To power sustainable growth, the warehousing sector needs greater flexibility and a better understanding of how, and where, automation and AI can support operational resilience,” says Kevin Price, logistics consultant at Dematic. “These technologies only deliver value when deployed strategically. This is why organisations are increasingly looking for partners who are more business systems integrators, than pure engineering companies.”
The democratisation of automation
Rising property costs and limited land availability are forcing many warehouse operators to rethink how and where they invest. The study predicts it will lead to increased automation within existing brownfield sites, alongside greater use of shared and multi-tenant facilities.
At the same time, changing demand patterns are pushing operators away from static capacity planning towards more flexible, scalable automation strategies.
These trends are lowering the barriers to entry for automation, particularly for mid-sized businesses, allowing them to deploy modular systems incrementally and scale as needs change, instead of committing significant capital expenditure to single-use sites.
This is a view supported by Obinna Njoku, head of automation, HellermannTyton who commented, “Consolidation and new fulfilment models will certainly reduce the number of single-tenant warehouses, but these spaces are more likely to be converted into multi-tenancy facilities, micro fulfilment hubs or ‘Warehouse as a Service’ than to remain empty.”
The study addresses other key topics challenging the industry, including: wider supply chain risks; the rise and risks of digital twins; making sustainability pay; dark warehouses; working with co-bots; managing costs and consolidation; the 4D warehouse; unlocking the last mile in distribution; understanding changing consumer expectations; and developing distribution systems for the circular economy.
