How to investment in Kardex systems with confidence and clarity.
Automated storage and retrieval systems (ASRS) are gaining momentum, but the question remains: Is the investment worth it? Manufacturers and distributors across industries are feeling the need for leaner teams, faster delivery expectations, and increasingly complex inventories. Automation can ease the pressure—but only if it delivers real ROI. Let’s break down how to calculate warehouse automation ROI, where the hidden savings come from, and why custom Kardex solutions implemented by AMH are helping operations scale strategically.
Why Automation ROI Is Hard to Pin Down
A major reason many facilities hesitate to automate isn’t cost—it’s uncertainty.
According to a recent McKinsey study, fewer than 25% of warehouses in North America are automated, despite 70% of surveyed logistics leaders planning to invest over $100M in automation within 5 years.
That disconnect comes from one thing: ROI can be tricky to calculate without understanding all the areas where automation pays off.
5 Key Areas of ROI
Let’s break down the five key areas where warehouse automation generates return:
1. Labor Reduction
Reduce picking labor by up to 70% with systems like Shuttle XP VLMs that deliver parts directly to the operator.
⟶ Fewer steps, less searching, lower strain.
3. Floor Space Savings
Vertical lift modules recover up to 85% of floor space by storing inventory vertically.
⟶ Postpone facility expansions, reduce rent or overhead.
2. Inventory Accuracy
Kardex software tracks inventory in real time, virtually eliminating miscounts, stockouts, and mispicks.
⟶ More uptime, fewer rush orders, better order accuracy.
4. Throughput Improvements
Batch picking, light-directed systems, and smart slotting boost picking speed by 200% or more.
⟶ Handle higher volumes without adding headcount.
5. Ergonomics & Safety
Reducing climbing, lifting, and repetitive motion cuts injury risk and associated costs.
⟶ Fewer lost-time incidents, lower insurance premiums.
Sample ROI Model: Kardex Shuttle XP VLM
Let’s say you’re storing 10,000 SKUs across 5,000 sq. ft. of shelving, picked by a team of 6.
| Metric | Before Automation | After Kardex + AMH |
| Annual labor cost | $300,000 | $150,000 (-50%) |
| Annual Cherry Picker Cost | $40,000/year | $10,000 |
| Floor space used | 5,000 sq. ft. | 750 sq. ft. (-85%) |
| Picking errors/month | 200 | 1 (-99%) |
| Order lines picked per manhour | 40 | 120 (+200%) |
| Estimated system cost | – | $275,000 |
| Payback period | – | ~1.8 years |
Note: These values are estimates and vary by facility size, SKU profile, labor rates, and operational complexity.
Your Next Step: Build the Business Case
When you work with AMH, we don’t just spec equipment. We help you:
- Audit your current storage and labor costs
- Model ROI using real operational data
- Identify bottlenecks where automation brings the most gain
- Map scalability so your system grows with you
Whether you’re just starting or expanding your automation journey, AMH and Kardex help you make informed, confident investments—with payback you can prove.
Schedule a consultation with one of our product experts today to calculate your potential automation ROI.
