Why trust, flexibility, and execution now matter more than speed

The warehouse automation market is entering a new phase, defined less by rapid adoption and more by reflection. After a surge of investment in the years following COVID-19, many companies are reassessing their approach, driven by a growing realization that automation alone doesn’t guarantee results.

“There were a lot of missing expectations on the performance side of things,” said Alex Haines of Toyota Automated Logistics, during an interview at the recent Gartner Supply Chain/Xpo Symposium in Orlando.

The gap between expectation and execution is now shaping how companies evaluate their next automation investment.

Toyota Automated Logistics (TAL) recently launched, although the company is no stranger to the warehouse automation space. Under the umbrella of Toyota Industries Corporation, TAL is a global partner for integrated warehouse automation that combines the three companies—Bastian Solutions, Vanderlande’s Warehousing business and viastore—under one brand as an integrated automation hub to deliver scalable systems, intelligent software and lifecycle service.

From excitement to skepticism

In the early wave of automation adoption, speed was the priority. Companies rushed to deploy robotics, conveyors, and automated systems to address labor shortages and meet rising e-commerce demand, but those rapid deployments didn’t always hit the mark.

“There’s a lot of conversation where people [were] just burned, frankly, from projects that were not engineered properly or executed well,” Haines said.

As a result, trust has become the defining issue in the market.

“Eighty percent of the conversations I had were like, ‘If we’re going to do something else, how do I make sure I can trust what you’re delivering?’” he said.

That skepticism is slowing decision-making and forcing solution providers to rethink how they engage with customers, moving from selling technology to proving outcomes.

Flexibility becomes the new requirement

At the same time, volatility across supply chains is reshaping how companies think about automation design. With product mixes changing, demand shifting, and network strategies evolving, rigid systems are becoming a liability. Haines said designing for flexibility is now a priority.

“I want to make sure I have flexibility for growth and scale because one day it’s this, the next day it’s this,” Haines said, describing customer concerns.

There is no single solution to that challenge. Instead, companies are taking a more nuanced approach by combining different technologies and design strategies to balance efficiency with adaptability.

That includes:

• Running extensive scenario and sensitivity analyses during design
• Combining rigid and flexible automation systems within the same facility
• Phasing deployments to allow for incremental scaling over time

“It’s planning for five years but building for two,” Haines said.

The rise and reality of digital twins

Digital twins are emerging as a key tool in managing that complexity and more companies are exploring their potential. A digital twin allows a company to simulate and test automation strategies before deployment. But, Haines said companies should investigate thoroughly before jumping into the digital twin universe.

“For 90% of customers, they don’t need that level [of visibility],” he said. “They need the level of confidence of a simulation.”

Full digital twins, particularly those maintained over time, are still largely limited to high-scale, high-risk environments due to cost and complexity. That said, the trajectory is clear.

“The industry’s going full digital twin for most systems going forward at some point,” he said.

Execution is the risk

If there is a consistent lesson emerging from recent automation projects, it is that failure is rarely about the technology itself, Haines said. Instead, breakdowns occur in design, integration, and execution.

“It’s not necessarily that the technology [is] bad, it’s just if you don’t have a very methodical approach, people have had some bad experiences,” Haines said.

The biggest mistake companies make when considering an automation investment is rushing, Haines said. Rather than assuming automation is the answer, companies are being urged to step back and evaluate whether and where it truly makes sense.

“A lot of people just assume they need to do something to automate,” he said.

Automation doesn’t stop at the four walls

Another emerging lesson: automation decisions cannot be made in isolation. Systems that optimize warehouse performance can create bottlenecks elsewhere in the supply chain if not aligned with upstream and downstream operations.

“If you don’t have that [analysis], then what we’re doing upstream doesn’t make any sense,” Haines said.

That is driving greater collaboration across supply chain partners, from network design to transportation to store operations, earlier in the process. Haines said engaging partners early in the process improves the chance of success.

The bottom line

Warehouse automation is no longer in its early-adoption phase. It is entering a period of maturity where success depends less on deploying technology and more on executing it effectively. That shift is forcing both customers and providers to rethink their approach.

For customers, it means slowing down, asking harder questions, and prioritizing flexibility. For providers, it means proving outcomes, building trust, and designing systems that can evolve alongside the business.

Haines said it means resetting expectations to get the most out of your investment.

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