Supply Chain Automation: Why It’s Not Just a Digital Revolution

So you’re thinking about supply chain automation.

But what does that mean, exactly?

Supply chain automation will mean different things to different people. That’s because there’s so much opportunity to automate within the supply chain sector. Automation usually means the digital aspect of automation, like machine learning algorithms, industry 4.0, powerful analytics, and AI-powered forecasting systems.

But automation is much broader, and much more physical, than it’s given credit for.

In this article, brought to you by the warehouse automation experts at Kardex Remstar, we’ll go beyond the digital side of supply chain automation and dive deep into the physical aspects. We’ll explore how automated storage and robotic warehouse systems are at the center of the automation technology driving the industry forward.

Ready? Let’s dive in.

What is Supply Chain Automation?

Supply chain automation refers to the use of technology to perform tasks within the supply chain with minimal human intervention. This includes a wide range of tools and systems, from robotic process automation (RPA) that handle purchase orders to physical automation like automated storage and retrieval systems (ASRS) that manage inventory and order fulfillment inside warehouses.
When implemented fully, supply chain automation connects the digital brain of your supply chain (planning, forecasting, procurement systems) with the physical muscle (warehouse execution, order picking, material handling).

Here are a few examples of each type of automation:

Think of it this way:

Digital tools tell your supply chain what should happen, and physical tools make it happen (faster, more accurately, and with fewer people.)

Supply Chain Automation Technology

Automation technology on the warehouse floor is where things get really tangible. It’s where your goods move, your orders are fulfilled, and your labor constraints are directly addressed.

There are so many types of supply chain automation technology. And more are emerging every year. For the purposes of this article, we’ll take a closer look at four of the most impactful categories of physical warehouse automation and how each plays a role in improving the speed, accuracy, and agility of your supply chain.

Vertical Lift Modules (VLMs)

A Vertical Lift Module (VLM) is an enclosed system that uses an automated elevator to retrieve trays of stored items and deliver them to an operator at an ergonomic access point. VLMs are one of the most popular types of automated technology for warehouses because of their ease of use, versatility, scalability, and intuitive setup. Because VLMs can save you up to 85% of your warehouse floor space, you’re able to get ROI fast.

VLMs are ideal for operations managing small parts or high-SKU-count inventory in tight warehouse footprints. And warehouses of all sizes can benefit from their automated storage and digital integration capabilities.

These systems are commonly used in manufacturing, aerospace, and electronics environments where accuracy, traceability, and space savings are critical.

• Saves up to 85% of floor space
• Reduces pick times by up to 65%
• Improves inventory accuracy to over 99%

VLMs integrate with inventory management software to ensure every pick and put-away is tracked in real time, making them a valuable asset for any digitally connected supply chain.

Vertical Buffer Modules (VBMs)

A Vertical Buffer Module (VBM) uses shuttles and totes to automatically retrieve goods and present them for picking. Designed for speed and flexibility, VBMs excel in high-throughput environments like e-commerce fulfillment and retail distribution.

They are especially effective in managing fast-moving items and handling batch or zone picking strategies.

• Boosts throughput by up to 45%
• Reduces labor requirements during peak seasons
• Supports rapid, multi-line order fulfillment

VBMs are modular and easily scalable, making them a go-to solution for companies needing to adapt quickly to shifting order volumes.

Vertical Carousel Modules (VCMs)

A Vertical Carousel Module (VCM) is a series of rotating carriers that move vertically to bring stored items to the operator. Simple, reliable, and efficient, VCMs are ideal for repetitive storage and retrieval of parts, tools, and components.

They’re a perfect fit for maintenance operations, service centers, and facilities that want a cost-effective entry point into automation.

• Cuts search time by more than 50%
• Integrates easily with pick-to-light systems
• Provides a compact, low-maintenance solution

VCMs offer a straightforward way to boost productivity and ergonomics without overhauling your entire warehouse layout.

Conveyor and Robotic Automation

Conveyors and autonomous mobile robots (AMRs) are used to transport goods between workstations, picking zones, and shipping areas. These systems connect ASRS technologies like VLMs and VBMs to create a continuous, end-to-end automated workflow.

They’re especially useful in high-volume operations that need to eliminate repetitive travel and reduce human handling of goods.

• Increases daily order capacity by up to 35%
• Enables 24/7 operation with minimal oversight
• Improves safety by reducing manual material handling

By integrating conveyors or AMRs with ASRS and warehouse software, you can easily build a scalable system that flexes with your supply chain demands.

How Warehouse Automation Supports Supply Chain Functions

If speed, accuracy, and adaptability are top of mind for your operation, then automated warehouse technology is right for you. But how and where do they fit into your current workflow?

Here’s how ASRS can directly support your critical supply chain processes:

1. Planning and Procurement Automation

Automation can provide you with real-time inventory data that improves your forecasting, automates your replenishment, and reduces your procurement risk.

VLMs and VMBs automatically record every transaction and update your inventory counts live. From there, your inventory management software can trigger low-stock alerts. It’s never been easier to gain visibility into your SKU movements and avoid costly stockouts.

2. Production and Kitting Automation

Automation technology makes it simple to streamline material flow to the shop floor by supporting just-in-time assembly.

VLMs and VCMs store production components and commonly-used tools, so the right part is always available to your team. Conveyors and AMRs connect your automated storage with production lines, delivering kits and components automatically.

Reduce downtime and take some of the physical strain off your team at the same time.

3. Fulfillment and Order Processing Automation

Warehouse automation can drastically reduce your picking times, improve your order accuracy, and help meet your tight shipping deadlines. VMBs are ideal for e-commerce and retail where there’s multi-line order picking. 
And VLMs can store your high-value inventory in a secure, space-saving footprint for on-demand picking.

4. Returns and Reverse Logistics Automation

Returns driving your team crazy? With automated storage technology, your returns can be quickly scanned, sorted, and restocked, getting inventory back into circulation faster.

VLMs can be configured with specific zones for returned stock, quarantine items, or pieces that need quality inspection. And your inventory management software ensures you know where everything is, from receipt to reissue.

5. Distribution and Last-Mile Preparation Automation

Automation can ensure fast and accurate order staging. Last-mile preparation is a breeze with technology that makes it easy to accelerate handoffs to shipping carriers.

VBMs can stage your high-priority or fast-moving orders close to shipping areas. And conveyors and AMRs can move finished orders directly to loading docks based on carrier or delivery route.

Three Trends Shaping Supply Chain Automation

As supply chains become more complex and customer expectations continue to rise, companies are rethinking how and where they automate. While digital tools continue to evolve, physical automation systems like ASRS are playing an increasingly central role in how supply chains adapt and scale.

Here are three trends shaping what’s next:

1. Decentralized and Micro-Fulfillment Warehousing

Customers expect deliveries, FAST. That’s why so many companies are shifting away from a handful of massive distribution centers to smaller, localized fulfillment centers. These micro-fulfillment hubs are located closer to urban areas and high-demand regions. To meet demand, these DCs rely heavily on compact ASRS technologies like Vertical Buffer Modules (VBMs) and Vertical Lift Modules (VLMs) to make the most of their limited square footage.

2. Data-Driven Automation

We've shifted away from data models and stepped fully into intelligence models. The right technology makes this transition easy. By combining ASRS technology with IoT sensors, ERP systems, and WMS platforms, companies can make smarter, faster decisions about their inventory, their labor, and their order routing.
With inventory management systems, ASRS units can feed real-time data into the broader supply chain tech stack, unlocking predictive analytics and closed-loop inventory management.

3. Workforce Augmentation, Not Replacement

We probably don’t need to remind you that labor shortages remain a top challenge across the supply chain. Automation can help. But not necessarily in the way you think. Technology automation isn’t about replacing people; it’s about making your existing team more effective. ASRS systems can reduce physical strain, simplify training, and enable one worker to do the job of several.

Automated warehouse technology allows companies to retain their experienced employees, upskill new hires, and build a more resilient workforce over time.

The Future of Supply Chain Automation is Physical

While digital tools like AI and RPA help improve planning and forecasting, physical warehouse automation is where real operational efficiency happens.

Technologies like Vertical Lift Modules (VLMs), Vertical Buffer Modules (VBMs), Vertical Carousel Modules (VCMs), and integrated conveyors and AMRs are transforming warehouse operations by improving speed, accuracy, and space utilization.

When it comes to implementing automation that truly aligns with your supply chain goals, Kardex is a proven partner. With over 140,000 systems installed worldwide, we help companies across industries automate smarter. We’ll send a warehouse automation expert to your facility to evaluate your workflow and see what systems would work best. Contact us today for your free, no commitment site visit.

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