Automation on the rise as labour shortage bites


With work shortages forecast to continue and predictions that up to 30% of the workforce may have to isolate, businesses big and small are looking to automation, TMX New Zealand General Manager Caleb Nicolson says

Over the last 18 months businesses have been grappling with a severe labour shortage, with unemployment dropping to 3.2 percent earlier this month, the lowest level on record.

The number of enquiries about automation have increased significantly across both our New Zealand and Australian businesses as organisations look for solutions to staff shortages.

Businesses are facing inflation, high wage costs, closed borders and now, the reality that staff may have to isolate for long periods of time over the next few months. Automation is increasingly being seen as a way to reduce the impact of these external factors.

More businesses see automation as a way to increase efficiency and reduce their reliance on a shaky labour market – that trend is accelerating in a Covid environment.

Businesses are recognising that incorporating automation can also help protect their people and customers by freeing up space and reducing staff contact in warehouses.

While traditionally automation was the domain of large corporates, there is now increased interest from small to medium sized businesses who are able to access automation at a lower price point.

Small to medium businesses are also the ones who are hit hardest by labour shortages and increased labour costs, so for them, an investment in automation is one which can pay dividends long term.

Automation doesn’t always have to be on a grand scale. There are a range of solutions available, from simple technology such as leveraging your existing WMS with pick and put wall processes, to vertical and horizonal carousels to more advanced solutions such as automated storage and retrieval (ASRS) at the pallet, carton or unit level.

There are a lot more automation providers and local partners in New Zealand compared to 10 years ago. While steel and shipping challenges are causing challenges around pricing, we are definitely seeing an uptick in interest in automation.

The warehouse automation sector is a rapidly growing market, with Reports and Data last year reporting that the global logistics automation market will reach $120 billion USD by 2026.

Planning and implementation can take time and is dependent on the capacity and timelines of automation suppliers.

New Zealand organisations also need to consider the incredible volume of automation demand in North America and Europe.

Identifying what kind of automation solution would best fit your business can seem complex so I’d encourage anyone interested in automating to seek independent advice to help them navigate the process.