The time has come for SMEs to embrace warehouse automation

A decade since Amazon introduced robotics to its warehouses, reluctance to automate among smaller firms is being broken down by lower tech costs and rising staff shortages

“We took a leap of faith when we moved from a traditional paper-based, manual warehouse to a robotised one and although we did as much research as we could into potential impacts on the business and our people, there were still a whole lot of question marks.”

So says Ian Shay, director of L&S Engineers, which stocks in excess of 35,000 spare parts for construction, plant hire and the general public, and employs 100 people.

Since it invested about £1 million in the installation of 40 robots 15 months ago, the firm’s 25,000 sq ft warehouse has doubled its daily shipments and halved the error rate. Daily mileage among the staff has been slashed from between five and 10 to practically zero.

“Like every other retailer, we’d ogled Amazon’s technology for many years but didn’t think it possible that a small ‘widgets-in-bins’ type of operation like ours could ever use something similar,” says Shay.

It has, he says, now “surpassed” all its expectations in terms of added efficiency, and he urges other small and medium-sized enterprises (SMEs) to “follow our example and take a leap into the unknown”.

As soon as you see how effortlessly the robots move about and take in the quieter, calmer atmosphere, you know that this is the only way forward

It took until 2019 for the UK to catch up with the global average of 85 robots per 10,000 employees and today, use of automation per se continues to lag behind that of other industrialised nations.

Price has historically been an inhibitor, as has the fear of slow payback. Yet at a time when prices are falling and return on investment looks increasingly attractive, it’s the belief that some firms are simply too small for a tech overhaul that is proving pernicious.

Dull, dirty, dangerous work

“The truth is that any business which has a warehouse should be looking to automate, even if the scale of the operation dictates that this should be a semi-automated pallet wrapper rather than an all-singing and dancing robot,” says George Thompson, chair of the British Automation and Robot Association (BARA).

With labour shortages making an impact throughout warehousing and logistics, he believes SMEs can use automation to boost recruitment and retention, as well as cut future legal bills.

“Warehouse work is often dull, dirty and dangerous, and all too many businesses face employee litigation costs further down the line as a direct result,” says Thompson. 

“There’s no value in adding a walnut to a Walnut Whip, so why not leave the routine stuff to the machines and allow human beings to do more of the interesting, value-added tasks that keep them engaged and productive?” he says. 

Another myth BARA is keen to scotch is that automation involves tearing up existing warehouse facilities and starting again from scratch. 

From the collaborative robot, known as a cobot – which works alongside staff without the need for safety devices – to the autonomous mobile robot or automated guided vehicle, the variety of tech solutions now on the market have made retrofitting commonplace.

For SMEs unwilling to take any financial risk, robotics as a service (RaaS) is also proving an attractive way in.


Devised to provide maximum flexibility, the RaaS business model – where SMEs pay a small upfront fee to lease robotic devices, as well as services such as maintenance – allows businesses to scale up and down at speed in response to changing market conditions.

Along with SaaS, warehouse sharing or third-party logistics, trying before you buy is viewed by the industry as a game changer in terms of adoption by SMEs with no previous experience of automation.

One such firm, Oddbox, which was started in 2016 as a response to food waste, delivers 45,000 boxes of “wonky” fresh produce directly to customers’ doorsteps each week.

In a bid to expand its product offer, the firm recently commissioned a feasibility study into semi-automation of its two production lines, an exercise that has given chief operating officer Phil Eaves much food for thought.

“We were given two scenarios by our consultancy: one costing under £1 million and using the existing warehouse facilities, and the other costing more than £5 million and involving moving to purpose-built premises.”

Having chosen to retro-fit, the firm is now considering a £750,000 investment, a move that Eaves says is intended to boost customer satisfaction rather than speed of throughput.

“For us, a goods-to-person system makes far more sense than a robot, which may be able to handle raspberries or melons but will not be able to handle everything in the way that a human being can,” he says.

By replacing paper labels – which tell a packer that a particular customer wants to try avocado, say, but can’t abide broccoli – with an automated control system, which has already identified what is required for each box, the firm aims to expand its range without adding to staff numbers.

“At this stage, we’re still looking at the numbers but we’ll only go ahead with the investment if we are sure the payback can be achieved,” Eaves adds. 

Robots may no longer be the stuff of science fiction but the majority of SMEs need the help of a specialist automation consultancy or “integrator” before they decide on a strategy.

Thompson advises calling in two or three such experts, just as you would with plumbers or electricians, and “listening carefully to what they have to say about any pinch points you’re experiencing on the production line”. 

While most lines are either starved of product or over-saturated, he believes that it takes a “fresh pair of eyes to identify the problem, locate exactly where it’s coming from and build the right tech solution”.

For Shay, the new robots have not only boosted efficiency but have made the warehouse a more attractive place to work in.

“As soon as you see how effortlessly the robots move about and take in the quieter, calmer atmosphere, you know that this is the only way forward.

“Robots are the future – pure and simple – and for us, it was a risk worth taking.”