41 www.drivesncontrols.com June 2026 SMART WAREHOUSES n AI is moving into UK warehouses, but humans remain central Dematic, the supply chain automation specialist, has produced a report examining how factors such as labour shortages, space constraints, heightened consumer expectations, and the rapid emergence of AI, are forcing a strategic rethink of automation practices in the UK warehousing sector. The study*, called The UK’s Automation Tipping Point, shows how organisations can make smarter, more flexible supply chain decisions at a time when both operational pressure and the cost of getting it wrong have never been higher. Based on insights from experts across the industry – including logistics companies, consultants and end-users, as well as the UK Warehousing Association and DHL Supply Chain – the study highlights how automation is evolving from a traditional engineering function into one that spans technology, data and operations. It also sets out practical recommendations to help organisations plan for, and respond to, this shift. The report’s key findings include: n AI is helping to boost automation, but won’t solve labour challenges; n executives are struggling to identify the right automation strategies due to a lack of experience; and n the emergence of models such as robots-asa-service and warehouse-as-a-service may offer a good starting point for smaller firms entering the market, but won’t be long-term answers. The report suggests steps that warehouse operators need to be taking now if they are to achieve the economic benefits of automation over the coming five years. AI won't replace humans According to the experts interviewed, although AI is becoming increasingly embedded in warehouse operations, it will neither remove the need for human staff on the warehouse floor, nor solve labour shortages on its own – particularly in complex and variable environments. Instead, AI will enable smarter, more resilient operations. Simulations such as digital twins will help organisations to model scenarios, stress-test performance and respond more effectively to external shocks – from supply disruption to demand volatility. The growing use of AI will also reshape the skills needed for warehousing, increasing demand for specialised “warehouse scientists” who can validate and translate insights from data into operational decisions. “We’re at an inflection point,” says Dematic logistics consultant, Kevin Price. “Consumer expectations are higher than ever, supply chains are volatile and labour is scarce. To power sustainable growth, the warehousing sector needs greater flexibility and a better understanding of how, and where, automation and AI can support operational resilience. “These technologies only deliver value when deployed strategically,” he adds. “This is why organisations are increasingly looking for partners who are more business systems integrators, than pure engineering companies.” Rising property costs and limited land availability are forcing many warehouse operators to rethink how and where they invest. The study predicts that this will lead to an increasing use of automation at existing sites, alongside greater use of shared and multi-tenant facilities. At the same time, changing demand patterns are pushing operators away from static capacity planning towards more flexible, scalable automation strategies. These trends are lowering the barriers to entry for automation, particularly for mid-sized businesses, allowing them to deploy modular systems incrementally and scale as their needs change, instead of committing significant capital expenditure to single-use sites. Obinna Njoku, head of automation at HellermannTyton, agrees: “Consolidation and new fulfilment models will certainly reduce the number of single-tenant warehouses, but these spaces are more likely to be converted into multi-tenancy facilities, micro fulfilment hubs or warehouse-as-a-service, than to remain empty.” The study addresses other challenges facing the industry, including: supply chain risks; the rise of digital twins; dark warehouses; working with cobots; managing costs and consolidation; 4D warehouses; unlocking the last mile in distribution; understanding changing consumer expectations; and developing distribution systems for the circular economy. n *The report can be downloaded from www.dematic.com/en-gb/insights/ downloads/vision-paper-2026 A new report explores how technology is reshaping the UK’s warehousing sector. It examines how automation can unlock significant economic gains, the obstacles that companies face in implementing it, and what they can do to overcome them. Automation will increasingly be applied to existing warehouses, according to the Dematic report
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