Ninety-one percent of companies have reported an increase in capital expenditures, or capex, on order-fulfillment automation over the past year, according to new research from Interact Analysis. The market intelligence firm revealed in its latest “Voice of Market” report that more than half of those investing more during the previous 12 months increased their spending by 6% to 15%.
Survey respondents plan on further investment, with 95% of them saying they anticipate an increase during the coming year.
According to the report, return on investment (ROI) expectations are also rising, with 61% of respondents now expecting ROI from fulfilment automation within 12 months. However, as capex grows, automation customers are willing to be more flexible about the criteria they consider when calculating ROI.
“Asking the right questions can enable suppliers of order-fulfilment automation to incorporate a broader set of criteria — standardization, accuracy, demand flexibility, multi-shift operation — or factors can be weighted differently when suppliers partner with potential clients to truly understand the current operation and future needs,” said Monica Sanchez, senior research lead for “Voice of Market” at Interact Analysis.
Productivity could improve with ‘end-to-end’ automation
Interact Analysis experts said that automation asymmetry may be restricting productivity. Many facilities now operate a hybrid model for order fulfillment in which core flows like conveyance, storage, and picking are at least partially automated, while critical peripheral processes, including cycle counting, inspection, and exception handling, remain manual or semi-manual.
This means high-speed systems are constrained by slower, manual upstream/downstream operations, limiting overall throughput. Facility leaders said that there are two important ways in which OEMs and system integrators can add value:
- Help clients integrate automation end-to-end, rather than at one stage of a process
- Advise clients on harnessing further productivity by making simple process changes
“Facility automation” is rapidly becoming a key priority for companies. Approximately 40% of respondents to the “Voice of Market” survey stated that full facility automation is a top strategic priority, with decision-makers almost twice as likely to do so (50%) than influencers (29%).
Respondents also said they want to decrease reliance on labor due to high costs, shortages, and recruitment challenges, especially for processes with low added value and high repetitive stress or injury.
“Order-fulfillment automation can deliver significant benefits around quality, consistency and speed to the customer,” Sanchez explained. “We expect robotic automation will lead the market over the next three to five years, particularly mobile robots, collaborative robots, and loading and unloading robots. With between 20% and 37% of operations currently fully manual, there is huge scope for adoption.”
“Now that automation is an irreversible trend, the top barriers are practical integration complexity, internal capability gaps, and uncertainty around scalability,” she added. “There is a strong desire, therefore, for vendors to partner more closely with vendors and system integrators from the start of a project and beyond go-live to ensure its success.”
About the Interact Analysis fulfillment report
Interact Analysis’ “Voice of Market” is a twice-yearly syndicated quantitative and qualitative study. It is intended to deliver impartial insights from decision-makers and influencers who are involved in the use, selection and purchase of automation for their facilities. These insights include market health, sentiment, investment appetite, vendor perception, pain points and emerging trends.
With over 200 years of combined experience, Interact Analysis is a market intelligence authority for global supply chain automation. The Wellingborough, U.K.-based firm‘s research covers the entire automation value chain – from the technology used to automate factory production, through inventory storage and distribution channels, to the transportation of the finished goods. It said the world’s leading companies trust it to surface robust insights and opportunities for technology-driven growth.