Management consultant, educator, and author Peter Drucker, whose writings contributed to the practical foundations of modern management theory, is quoted for once having said, “Management is doing things right; leadership is doing the right things.”

When it comes to warehousing, where “doing the right things” can translate to improving operational efficiency, the use of automated storage and retrieval systems (ASRS) are leading to substantial productivity gains for manufacturers, experts note. 

According to a recent report from Mordor Intelligence, North America is one of the largest markets for automated storage and retrieval systems globally, led by the United States. 

“The region’s manufacturing sector, which is a vast source of demand for ASRS solutions, hinges on the dominant U.S. economy, accounting for 82% of the region’s economic output,” the report states. 

Further, in its “Automated Storage & Retrieval System” report, the market research firm notes that significant factors driving automated material-handling systems include cost savings, labor efficiency ,and space constraints.

“Moreover, with the rapid growth in stock-keeping units (SKUs), wholesalers and distributors find it difficult to make informed decisions about the operations,” it states. “This factor is driving the need for more innovative usage of labor, equipment, and technology.”

Michael Roe, vice president of sales for DMW&H, Fairfield, N.J, points to ASRS solutions as an effective way to reduce costs and increase productivity in distribution.

“Our clients have experienced the benefits of lower labor requirements, higher efficiency, and error reduction with the implementation of automation,” he says. “In addition, automated storage systems provide more density, which can reduce square footage and real estate requirements.”

Meanwhile, the Mordor Intelligence report notes that other prominent factors, such as steady growth in wages paid to workers, have made warehouse operators look forward to alternate solutions for warehouse management. 

DMW&H’s Roe adds that automated storage systems also support a safer working environment.

“There are a number of safety benefits that come with automated storage solutions,” he says. “Employees experience less strain on the body as they no longer have to physically lift as many products. Dangerous tasks like reaching high points in the facility are taken on by automation instead of employees. Subsequently, this leads to the reduction of falls, errors, and other workplace injuries.”

Reaching new heights

In recent years, manufacturing automation technology has expanded dramatically, and ASRS solutions have become relatively popular in the manufacturing industry, experts note.

According to Straits Research, the global automated storage and retrieval system market size was valued at $11.15 billion in 2024 and projected to reach from $11.98 billion in 2025 to $19.76 billion by 2033, with a compound annual growth rate (CAGR) of 7.41% during the forecast period (2025-2033).

In its “Automated Storage and Retrieval System Market” report, Straits Research notes that the introduction of the “Industry 4.0” revolution has resulted in advancements to manufacturing equipment and inventions such as automated storage and retrieval systems, which have aided in quickening the production of manufactured items within an industry. 

“During such industrial revolutions, the manufacturing sector has dominated machine-made items due to its superior precision and substantial productivity gains,” the report states. “In addition, businesses have recognized the benefits of ASRS, notably in manufacturing, for operations such as production, distribution, and inventory management. 

“The upgrading of industrial facilities has increased the demand for ASRS during the past decade,” it continues.

An example of this is Manhattan Beer Distributors. Last December, the distributor unveiled its newly modernized automated facility in Suffern, N.Y. The $80 million project, completed in partnership with Westfalia Technologies, York, Pa., embraces cutting-edge automation to reduce the environmental impact while scaling operations.

During the grand opening, Simon Bergson, president and founder of Manhattan Beer Distributors, stated: “Through our investment here, we have firmly planted our flag in Rockland County. This facility allows us to more than double our inventory capacity while dramatically reducing our environmental impact and truck traffic, thanks to expanded rail capacity and alternative-fuel vehicles.”

Key sustainability highlights:

• Expanded rail capacity: The facility’s new double-track rail system eliminates thousands of truck trips annually, reducing emissions and congestion in the community.
• Alternative-fuel fleet: The Suffern fleet runs 100% on renewable natural gas (RNG), sourced from landfills and farms, with a goal of transitioning the entire company fleet to alternative fuels by 2030.
• On-site solar energy: A1 MW solar array powers the facility, complimenting similar installations at Manhattan Beer’s Bronx and Queens warehouses.
• Automation for efficiency: The high-density automated storage and retrieval system — provided by Westfalia Technologies optimizes space, minimizes waste, and streamlines inventory handling.

In a release, Dan Labell, president of Westfalia Technologies, stated: “The system is game-changing. With over 25 different pallet types, three-rail support for stability, and automated integration of two separate buildings, it’s one of the most versatile and efficient facilities of its kind.”

As ASRS offers a wide variety of customization possibilities, consequently, each ASRS supplier has unique customization that meets a market requirement, Straits Research notes.

“Consumers’ rising purchasing power has prompted many industries, including packaging and delivery, to utilize ASRS solutions more frequently. This is attributable to the increased production volume in the industrial sector,” according to the Straits Research report. “Using ASRS systems such as shuttle- and bot-based AS/RS and carousel-based AS/RS (vertical, horizontal, and robotic), for example, the effects of eCommerce and omnichannel delivery have been mitigated significantly. Heavy load shuttles linked to workstations to maximize floor space and accelerate delivery are two benefits that ASRS use has provided to this industry.”

Moreover, Straits Research notes that eCommerce is a significant driving factor for the demand from automated distribution warehouses, such as ASRS, as consumers seek ever-shorter delivery times.

“Increased demand and elevated consumer expectations have prompted eRetailers to implement operational modifications for expedient order fulfillment and to preserve market competitiveness,” the report states. “This presents a considerable opportunity for the rapid adoption of automated equipment in the eCommerce industry. 

“In addition, as the popularity of online and mobile shopping applications has reached its pinnacle and customers can purchase any product at any time, the eCommerce industry has been plagued by unpredictability in consumer demand,” the report continues. “Due to fluctuating eCommerce demand, the advance pick zones are in a constant state of flux to accommodate variable item demand. This is an opportunity for the international market.

This rise of eCommerce as well as a collection of efficiencies suggest that automated storage solutions will move beyond a want to a necessity.