Prologis Research today released the first of a two-part special report on automation in logistics real estate.
Automation and Logistics Real Estate #1: The State of Automation in Supply Chains highlights the fact that automation has the power to revolutionize logistics operations. As logistics customers work to ensure their operations are efficient and robust over the long term, automation is increasingly front of mind.
When done well, automated sites are more productive, run more smoothly, have faster processing times, improve worker safety, and are more efficient from a total cost standpoint (operating and capital expenses).
Importantly, what was anticipated to take years to gain traction is happening in just months due to a combination of factors: the pandemic and its pressures on the workforce, including higher absenteeism; improving technology, which is rapidly expanding capabilities and reducing costs; and the fast growth of labor-intensive operations: for example, e-commerce early adopters who can benefit significantly from automation technology. In addition, as Prologis customers spend more on automation, they will choose longer leases and also renew in-place.
While some logistics users are already making big investments in automation, the reality is that warehouse automation is still in the early stages. The report points out that automation is highest in scenarios where three discrete characteristics overlap: repeatable processes; steady cadence over a day and across seasons; and high-volume operations.