It depends. Automation is supposed to increase the productivity and efficiency of the operations in general. This works especially well if the processes are quite standardize and the inventory are somewhat uniform and similar in terms of profile.

If the inventories vary by a lot, with some small pieces and other huge odd-shaped in nature, then automation may be a challenge. These variations need to be considered during the design phase. To cater to such a wide difference, the cost incurred in the automation machines may be high. It is challenging to justify in terms of ROI.

Another point to note is the flexibility of the systems. Some automation are "fixed" in nature, therefore in situations of volume fluctuations, there is no way operations can adjust the automation.

With automation, the operations can potentially free up manpower resources to do more value added activities. However, from the financial perspective, it is sometimes challenging to justify the investment. This is especially so in certain developing countries where the manpower cost is low.

I had some discussion previously with warehousing staffs in developed countries such as Japan. They approached the topic of automation carefully. In depth studies and analysis have to be done to ensure that automation is beneficial.

One major factor is the huge investment required. Once the machine is in place, regardless of the volume fluctuation or if the machine is idle, it is a sunken cost with depreciation.

The other factor to consider is the inflexible nature of certain automation. It does not allow the operations to scale up or scale down easily, depending on the business nature.

Since there are benefits from using automation, why don't we see them being used often in 3PL warehouses?