Automation Enhances Efficiency and Service Inside the Warehouse

Warehouse operations are traditionally labor-intensive, manual processes, but new technology is automating operations, increasing efficiency, expanding capacity and improving accuracy and service. Automation in the warehouse can take many forms, ranging from robotic arms and automated guided vehicles to conveyor belts, sorting system and sophisticated software platforms. At its core, automation aims to reduce manual touches, speed up material flow, and ensure precise inventory management.

According to the 2024 Logistics Management Warehouse Operations Trends Study, warehouses are already investing or planning to invest between $250k to $10 million in automation, including robotics and visibility tools.

Automated Storage and Retrieval Systems

Penske Logistics recently partnered with Cimcorp, a global manufacturer and integrator of robotic handling solutions, to automate a customer’s bakery order fulfillment process and manage the flow of baked goods from production to store shelves. The solution, called an automated storage and retrieval system (ASRS), will improve order accuracy, boost processing capacity, streamline product movement and speed up store deliveries.

The process starts by inducting or moving pallets of product into the ASRS which determines the best location for the baked goods. “It knows if it is a fast-moving or slow-moving item and places it in the most efficient location,” explained Steve Chambers, vice president of operations for Penske Logistics.

The system then uses an overhead gantry system to pick orders and automate the movement of bread trays stacked 16 trays high. “If a customer ordered two trays of bread, it picks two trays and transports that to the next location to generate a total of 16 trays and, ultimately, complete the order,” Chambers said.

Previously, every tray was picked up and transported by hand. "The system improves productivity and quality assurance," Chambers said, adding that the system supports increased volumes and can grow with the customer. "The pick module can be expanded without growing our footprint.” This is possible because the ASRS structure is modular. Additional gantry units and storage positions can be integrated into the existing framework without requiring new construction. The vertical storage design maximizes cubic space, enabling more capacity in the same square footage.

The system provides real-time data on the exact inventory available. “We build off that with our ClearChain technology suite that tracks the full customer order from start to finish and gives visibility into where things are located,” Chambers added.

Where AI Meets ML in Automation

Earlier this year, Penske piloted a yard management solution from Blue Yonder at one warehouse site and is rolling it out to additional locations. The technology uses computer vision and machine learning, tied into the yard management solution to automatically identify and check-in trailers. The system checks out trailers the same way, automating gate management and reducing errors.

The system also improves visibility and tracking details for loads by connecting directly to the Blue Yonder warehouse management system.

Inventory drones also hold promise, as they address several challenges in labor and inventory management. For example, they’re a safer alternative to reaching high shelves, they are operator-free and work around the clock with accuracy. “We have seen a lot of positive results and run a few different pilots. I think the unique thing about it is you don’t need an operator present. You just assign it a flight schedule,” Chambers said.

Automation Provides Options in Uncertainty

Maximizing labor has become more important as wages increase and labor becomes more challenging to find. At the same time, visibility has become more critical.

Proving ROI – Is it Worth It?

“Penske is constantly evaluating and testing new warehouse technologies to understand the benefits and prove out the ROI,” said Steve Chambers, vice president of operations for Penske Logistics.

Tests and pilots are a critical part of proving technology. “Not everything has a good ROI. We continue to engage on a regular basis to determine which emerging technologies are commercially viable today and which might have promise two to three years from now,” Chambers said.

The Penske Difference

From evaluation to execution, Penske takes a holistic and methodical approach to warehouse automation. The team works closely with customers to identify operational pain points, assess potential solutions, and run controlled pilots to validate performance. This includes modeling expected ROI, measuring results and ensuring the technology integrates seamlessly with existing systems. By proving the value before full-scale deployment, Penske helps companies invest with confidence.