Beyond Throughput

Has warehouse automation, at times, solved the wrong problem? This question arises when reading the central thesis put forward by our affiliate Dematic in its article on the five most important industry trends of the year: “Growth is no longer the problem. Profitability is.”

With AutoStore, Kesko is boosting efficiency and capacity in a minimal amount of space.

Kim Baudry, Global Market Development Director at Dematic, says: “E-commerces unlock new revenue streams, but not without a cost.” The operational expenses associated with fulfilling online orders – particularly in high-volume environments –can significantly erode profit margins, she explains.

This margin pressure is driven by several structural challenges:

• Labor-intensive picking processes: Manual fulfillment remains costly and difficult to scale, particularly as order profiles become smaller and more fragmented.

• Volatile order volumes: Seasonal peaks and unpredictable demand patterns require flexible capacity – often resulting in inefficiencies during slower periods.

• Tight delivery windows: Same-day and next-day expectations increase time pressure and operational expense across the entire fulfillment process.

• Omnichannel pressure: Serving stores, online customers and multiple distribution channels simultaneously adds structural complexity that directly impacts margins.

Kim Baudry, Global Market Development Director at Dematic, says: “E-commerces unlock new revenue streams, but not without a cost.” Against this backdrop, Kim Baudry offers a clear reminder: “The challenge is not just growth, but profitable growth.” Automation, she argues, provides a “Pathway” to improving both efficiency and profitability.

Yet technology alone is not the answer. To truly outpace competitors and delight customers, companies must carefully plan and continuously optimize their operations – aligning system design, process logic and performance metrics with measurable margin impact, not just throughput targets.

As Kim Baudry notes, “Technologies like autonomous mobile robots can take over repetitive labor intensive tasks, freeing up human workers for higher volume activities.” By reallocating labor from low-value movement to higher-impact tasks, retailers can stabilize productivity while containing rising personnel costs.

High-density storage and goods-to-person concepts further improve the economics of fulfillment. “Flexible systems like AutoStoreTM can be ideal, as seen in Kesko's grocery operation in Finland,” Baudry explains. (The use case she refers to can be explored here ). By minimizing walking distances and optimizing space utilization, such systems directly reduce cost per pick – a decisive lever in margin-sensitive environments.

Ultimately, the debate is not about automation versus manual processes, nor about speed versus scale. It is about aligning operational design with economic outcomes. Growth remains important – but growth without margin discipline can quickly undermine competitiveness.

Warehouse automation, when intelligently integrated and continuously optimized, shifts the focus from sheer throughput to sustainable performance. Seen this way, the initial question answers itself: automation isn’t the wrong solution, as long as the real objective is profitability rather than volume alone.