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The Wrong Question Is Costing Warehouses Millions

The floor gets the credit for output. But today, the real fight is won in how the operation is designed. The teams that understand this are pulling ahead, fast.

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The Wrong Question Is Costing Warehouses Millions

MOST COMPANIES ARE ANSWERING THE WRONG QUESTION 

Most companies evaluating warehouse automation start with the same question: which solution should we choose? It feels like the logical first step. It is also, according to Andrew Tolman, the wrong one. 

“Technology is the easy part to talk about,” says Andrew, who leads Solutions for Hai across the Americas, after more than a decade designing and engineering automation systems on the integrator side, including at Vanderlande and KNAPP North America. “You can see a demo, compare rates, and put a capital number next to it. The harder conversation is getting operations, engineering, IT, finance, and the business to agree on what is actually limiting the operation.” 

That harder conversation, he argues, is the one companies skip. And it is costing them millions.

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“Technology is the easy part. 

The hard part is agreeing on what’s actually limiting the operation.” 

 

— Andrew Tolman, VP of Solutions, Americas, Hai Robotics 

THE INDUSTRY’S BIGGEST MISCONCEPTION 

Before any technology enters the conversation, Andrew starts with the requirement itself: how much volume has to move, what the SKU and order mix looks like, what service window the operation is protecting, and where the current process actually breaks. A company may believe it needs more automation when the real constraint is replenishment timing, inventory accuracy, space, or how work is released. Until that distinction is clear, comparing technologies is premature. 

Skip that step, he warns, and the consequences show up later, and cost more. “When technology is selected first, the requirements show up late. Then the team is changing scope during firm engineering, paying for change orders, and building manual workarounds before the system is even live.” Andrew has seen individual pieces of equipment hit their rated speed while the building still misses its ship window, because sequencing, replenishment, or exception handling was never designed around the equipment in the first place. 

The misconception underneath all of this, he says, is treating automation as an equipment purchase. It isn’t. “It changes how inventory is stored, released, picked, sequenced, recovered, maintained, and managed every day.” Machine rate matters, but what matters more is how the full process performs with the real SKU mix: during peak, and when something goes wrong. Sometimes the answer is robotics. Sometimes it’s software, a process change, or a hybrid of all three. The goal is a better running operation, not more equipment on the floor. 

EVERY WAREHOUSE HAS A DIFFERENT CONSTRAINT 

No two warehouses fail in the same way. Some are constrained by labor, others by storage capacity, SKU growth, fulfillment speed, or system integration. Brownfield sites carry an added layer, since any new system has to integrate with existing WMS, controls, equipment, and routines while the building keeps running. 

Andrew is quick to note that the first problem a customer names is rarely the real one. “A site may say it needs more pick capacity when replenishment is starving the pick area. It may say it’s out of space when velocity and slotting are the real issue.” His starting point is always the same: map the flow, find where queues build, and compare a normal day against peak. That’s usually where the real loss of capacity becomes visible. 

Two retail warehouses make the point well. One supports e-commerce with a large SKU count, heavy each-picking, and a tight footprint. Travel and storage density may justify a goods-to-person system there. The other ships mostly cases to stores, with plenty of storage but tight sequencing and trailer departure windows; that site may get far more value from better wave logic, sortation, or transportation synchronization. “I would not recommend the same technology to both without looking at the order profile and the work that has to happen before and after the automated process.”

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“A concept can be technically impressive and still be the wrong answer for the operation. You have to be willing to change it when the data says it will not scale.” 

 

— Andrew Tolman, VP of Solutions, Americas, Hai Robotics 

It’s why Andrew resists ranking automation technologies against each other in the abstract. A fixed system can be highly efficient when volume and mix are stable. Modular robotics can make more sense when capacity needs to be added in stages, or the building is likely to change. A manual or hybrid process can still be the right call when volume hasn’t matured or the process still needs to be proven. “I would choose the option that fits the business case, product profile, building, and growth plan, and that the site can support after the project team leaves.” 

START WITH THE BUSINESS OUTCOME, NOT THE TECHNOLOGY 

If the conversation shouldn’t start with robots, where should it start? With business goals: reducing fulfillment cost, increasing storage density, improving delivery performance, or supporting future growth. Only once success is defined can the right automation fit be determined. 

In practice, that means Andrew opens with requirements, not products: volume, SKU and mode mix, cutoff and service windows, where the current process fails, and what happens to the business if nothing changes. From there he moves into the building, the labor model, the systems, and the growth assumptions. He also makes a point of asking site leaders what makes the process hard to run today. “Their answer is often more useful than the high-level project description.” 

On KPIs, his advice is restraint rather than volume. Rather than a scorecard of twenty measures, he picks the few tied directly to the reason for the investment: on-time shipping, cutoff attainment, sustainable throughput at the actual mix, accuracy, labor per unit, storage capacity, system availability, recovery time, and cost per order or case, with safety and ergonomics built in from the start, not added later. A throughput number without the mix, duration, and service window attached, he notes, doesn’t tell you much. 

Starting with the objective can change the recommendation entirely. A missed cutoff might be solved largely by slotting or order-release logic. A building with no room to grow might need storage density above all else. A process still in flux might call for a manual or semi-automated first phase rather than a full design commitment. Andrew has seen this play out directly on deployments where the team launched manually in some cases to validate SKU flow, labor, replenishment, and WMS rules before committing more capital, generating real operating data and reducing the risk of scaling the wrong design. 

A LESSON FROM EXPERIENCE 

Andrew’s perspective is shaped as much by years spent designing these systems from the solutions side as by his current role guiding customers through them. One of the clearest examples came early in his career, on a project built to support a better replenishment model for a retailer’s constrained urban stores. The team started manually, with a WMS-driven operation, to understand single-piece handling, sequencing, milk runs, and staffing before adding technology. That launch reduced out-of-stocks by more than 50 percent and reached 98 percent operational readiness within 30 days. 

A robotic concept came next. The technology worked, but cycle time became the constraint, and it couldn’t scale to the volume the business needed, so the design changed. “A concept can be technically impressive and still be the wrong answer for the operation. You have to be willing to change it when the data says it will not scale.” 

That experience still shapes how Andrew advises customers today. “The customer lives with every design decision we make. A demo is controlled. A real site has wrong product dimensions, late inventory, blocked paths, system delays, staffing gaps, maintenance issues, and a peak mix that does not behave like the average.” He now spends far more time on those conditions up front: clear exception paths, recovery procedures, rollback criteria, spares, training, and ownership before go-live. He also favors a controlled ramp, increasing volume when the process is stable rather than when the calendar says it’s time. 

The broader lesson: a capital approval is only the beginning. It also commits a company to integration, data cleanup, training, maintenance, site leadership, and a stabilization period. Treat those as secondary work, Andrew says, and the expected value tends to arrive later than planned. He also encourages customers to ask, up front, how the solution will be supported after the project team leaves, and how benefits will be measured six or twelve months later. Mechanical acceptance confirms the equipment was installed. It says nothing about whether the operation is delivering the business case. 

WHAT WILL SEPARATE WINNERS FROM EVERYONE ELSE 

There is no universal “best” automation solution, only the solution that fits a company’s specific operational challenge and business objectives. The companies that get the most out of automation, in Andrew’s experience, aren’t chasing the newest technology. They’re asking better questions from the outset. 

If warehouse leaders remember one thing, Andrew wants it to be this: look first at what’s leaving the building. Are the right orders shipping on time, at the right cost and accuracy? Can the team run the operation and recover when something goes wrong?

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“Robot moves, utilization, and equipment uptime are useful diagnostics, but they are not the final measure. 

 

If those numbers look good and the customer result is still off, we are measuring the wrong part of the process.” 

 

— Andrew Tolman, VP of Solutions, Americas, Hai Robotics

And the first question every company should ask before evaluating automation isn’t which system to buy. It’s a sentence they should be able to complete together: we need to move this volume and mix, by this cutoff, at this cost and accuracy, inside this building, while supporting this growth. Only then can a team weigh the value of solving the problem against the risk of leaving it unsolved. If the team can’t agree on that statement, Andrew says, it’s too early to select a technology. 

Looking ahead, he expects the next five years to bring more modular systems, more software orchestration, and more automation layered into existing buildings rather than built from scratch. Customers, he says, don’t want to replace an entire operation every time their profile changes. They’ll expect to add capacity in stages and lean on better data to manage slotting, work release, and exceptions. AI will help with design, forecasting, orchestration, and maintenance, but it won’t fix poor master data or unclear operating ownership. And providers, in his view, will increasingly be measured less by the go-live date and more by how quickly a site stabilizes, and whether it sustains throughput, accuracy, and service once the project team is gone. That, ultimately, is where the business value shows up.

Ready to ask the right question before you invest?

 

We work with warehouse and distribution operators across the Americas to define the real constraint first, then build the right mix of process, software, and automation to solve it.

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ABOUT THE AUTHOR 

Andrew Tolman is VP of Solutions, Americas, Hai Robotics. He works with warehouse and distribution operators to define the real operational constraint first, then build the right mix of process, software, and automation to solve it. 

This article is part of the Hai Perspective, a series of our experts’ insights grounded in real operational challenges.

 

 

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