Every e-commerce leader or operator wants to automate. Few know when they are ready.
Automation has become the buzzword of every logistics and e-commerce conversation. From robotics to AI-powered sortation, automation promises speed, precision, and scalability. But it is not a one-size-fits-all solution. Simply introducing technology does not guarantee value. In fact, when done at the wrong time or under the wrong conditions, it can slow you down and cost more than it saves. Industry reports indicate that as much as 73% of automation projects fail to deliver because they automate broken processes instead of fixing them first.1
So, what does it take to reach the gains that automation promises?
1. Understand Your Process
Before you invest in equipment, invest in understanding how your process actually works. Automation magnifies both efficiency and inefficiency.
A process ready for automation should be:
Repeatable: The steps must follow a clear, documented flow with minimal variation in inputs or sequences. If operators are constantly improvising, the machine will fail to execute its programmed task correctly.
Predictable: Volume and flow must have a quantifiable range and predictable peaks. Automation only realizes its ROI when running at consistent, high-volume capacity; if your process is subject to erratic, untracked swings, you'll be left subsidizing expensive idle time.
Robust: The system must consistently deliver expected outcomes, even when facing common variables. This is where software and physical process meet. For example, to achieve an internal target like near-perfect inventory accuracy, your inputs (label quality, item placement, and scanning protocol) must be robust enough to prevent data errors before the product ever hits the conveyor.
Your inputs matter as much as your flow: label quality, training, and packaging uniformity. Even small inconsistencies can compound into major downtime.
2. Understand Your Business
Automation pays for itself only when volume and consistency reach critical mass. Every system has a breakeven threshold. Below it, you are subsidizing idle capacity. Above it, you are compounding efficiency.
Example: If a sorter costs $2 million and saves $2 per package in labor once throughput exceeds 40,000 parcels a day, running it at 20,000 units per day doubles your payback time. Or worse, it never pays back at all.
Readiness looks different across segments:
3PLs automate to scale across diverse client profiles.
Retailers automate to standardize the unique customer experience, especially as 71% of customers expect personalized experiences and seamless journeys, and 76% get frustrated when that didn’t happen.2
B2B operations emphasize precision and predictability.
B2C operations prioritize flexibility and speed.
Knowing which game you are playing shapes the ROI equation.
3. Understand Your Investment
Money is the easy part. The harder investment is time. Time to ramp, train, and stabilize. Operators who have spent years on manual push systems need to learn to pull work through automation.
Even with good equipment, initial productivity typically starts significantly below design throughput and ramps up as teams learn and stabilize. This initial stabilization period is a necessary operational reality that must be factored into the ROI timeline.
Then come the hidden investments:
Preventive maintenance programs: Required to identify component wear and prevent catastrophic failures that result in costly, unscheduled downtime.
Spare parts inventory: You must hold critical components on-site to reduce repair time from days to hours, protecting against supply chain delays for specialized equipment.
Process consolidation: The commitment to permanently retiring manual processes and aligning all facility activity around the new automated flow to maximize utilization.
Automation is not plug and play. It is a discipline.
4. Start Small, Build Smart
Don’t plan to go big immediately. Analyze your processes, volumes, and investment triggers critically. There may be smaller or sub-processes that can deliver meaningful gains.
Instead of a full-scale overhaul, focus on simple, scalable wins that target high-repetition tasks and eliminate manual error:
Pallet wrapping: Automating this repetitive, injury-prone task standardizes stability and reduces labor.
Labeling: Automated print-and-apply systems ensure label quality, position, and legibility, which are essential inputs for downstream sortation and shipping.
Auto bagging: A solution to speed up packaging for high-volume, small-item DTC orders, addressing the pressure for fulfillment speed.
Case packing: Automating the packaging of uniform items into master cartons to improve throughput consistency for B2B or retail shipments.
These targeted automations can then be integrated into the broader flow through basic conveyance, building the foundation for larger automation in the future.
Another natural entry point: Sortation. Directing parcels or inventory to outbound destinations is high volume, high repetition, and low variation. This makes it the ideal use case for automation without the complexity of automating the entire receipt-to-ship process in one leap.
Emerging technologies like collaborative robotics, AI-driven optimization, and cloud-based automation control systems are shifting the model from big bang investments to incremental, data-driven evolution. The best operators are learning that automation no longer has to be all or nothing. It can evolve with the business.
5. Implementation Realities: What Happens After the Switch Is Flipped
Even the best-designed automation plans meet their biggest challenges after go-live. Integration, vendor alignment, and change management often determine whether ROI is achieved or missed.
As mentioned previously, more than 70% of automation efforts fail. This isn't due to poor technology, but because of weak readiness and execution. Integration, process design, and training drive the real results.
To measure success, focus on KPIs beyond labor cost:
Error rate reduction (%)
Throughput variance by hour/day
Uptime vs. downtime ratio
Flexibility score (handling mix shifts)
Payback period (in months or years)
6. System Integration
One automation installation that I encountered ran as a standalone unit with minimal connection to the Warehouse Management System. This created barriers to adoption and barriers to performance tracking.
Configuration had to be done at a local terminal outside the Warehouse Management System. This led to misalignment between the broader floor operation and the automated equipment.
Origin scans and reject data from the two systems were different. That difference complicated troubleshooting and complicated metric review.
The lesson was clear. Integration is as important as machine function. Build for one source of control and one source of data. Provide easy access to configuration and to performance analytics.
7. Vendor Partnership
Choosing the right integrator can determine whether an automation project succeeds or struggles. For complex or high-spend initiatives, the largest names in the industry are not always the best fit.
When evaluating partners, consider how important your project is to their business and whether their backlog will delay your timeline.
In a prior role, we selected a regional integrator over a national firm for three key reasons:
They could meet our compressed installation timeline.
Our project and the promise of future work represented meaningful business to them, aligning incentives for shared success.
Our internal team needed hands-on post-installation support given our limited experience operating and maintaining automated equipment.
That decision proved invaluable. The project had its challenges, but it received priority attention from the integrator's leadership down to the team on the floor. Major escalations were handled directly by the CEO and his leadership team. At one point, spare parts were flown in by private jet to minimize downtime. That level of responsiveness would have been unlikely with a large national provider.
Sometimes the right partner is not the biggest one, but the one most invested in your success.
8. Change Management
One of the most challenging automation projects I encountered had nothing to do with the equipment itself. The real failure was in how we managed the change within the warehouse.
The new automated system required orientation, spacing, and proper package placement, which is a pull process that demanded a shift in behavior from a workforce used to push systems (dump and go). Our failure to prepare the team for that change created inconsistency, leading to frequent downtime and high reject rates.
In hindsight, I would have engaged the workforce much earlier, before installation even began. Design walkthroughs, discussions about how pull systems differ from push systems, capturing employee concerns, and building standard operating procedures with clear training certifications would have built ownership from day one.
Automation succeeds or fails as much in hearts and minds as it does in hardware.
9. The Taste Test
I’m a strong proponent of automation, but at the right time and for the right processes. Half-baked automation delivers exactly what you would expect: a poor tasting investment.
When done right, automation compounds value across your operation. It improves predictability, consistency, and customer experience. When done wrong, it locks in inefficiency at scale. The difference lies in readiness, not ambition.
The question is not “Should we automate?” but “Are we ready to automate?”
Partnering for Automation and Optimization
As I begin my next chapter at Stord, I’m excited to focus on innovation that earns its keep. This includes automation and technology investments that create measurable and scalable value for our customers and teams. My new role is specifically designed to solve the very issues I’ve described here, such as readiness and the gap that plagues most automation initiatives.
The difference between a broken investment and a real advantage lies in timing and connection. By partnering with Stord, you gain a unified approach that ensures your automation drives network-level efficiency.
So, what's your automation readiness score? Share your own implementation experiences with us and let’s learn from each other!
