If you’re in warehouse management, we know we don’t need to remind you: warehouses are under pressure from all sides.
From labor shortages and rising costs to space constraints and surging customer expectations, operations leaders are being asked to do more with less.
And while automation has long been considered a future-state solution, our latest data shows that for many, it’s already reshaping their day-to-day.
To better understand what’s working—and what’s still getting in the way—we surveyed over 100 warehouse leaders across industries, team sizes, and facility types.
Here's what we found: Inventory control, space optimization, and picking accuracy continue to be significant challenges. But they’re also where automation delivers the greatest ROI.
In this article, we break down the top warehouse challenges identified in the Kardex Impact Survey and explore how forward-thinking teams are solving them with automation. Each segment includes real data, customer quotes, and actionable insights that you can use to benchmark your own operations.
This article includes proprietary data from a 2025 survey of over 100 Kardex Remstar customers across North America, representing a wide range of industries including manufacturing, e-commerce, pharmaceuticals, and logistics. With over 140,000 automated storage and retrieval systems (ASRS) installed worldwide, Kardex Remstar brings decades of hands-on experience helping warehouse teams optimize space, improve efficiency, and adapt to shifting operational challenges. These insights reflect real-world data from the people managing warehouse operations every day — not just industry trends, but boots-on-the-floor realities.
We sought to identify the most significant challenges facing warehouses today. We asked our customers to choose their top three.
Here’s how they stacked up:
Let's delve deeper into these 12 warehouse challenges by major category: inventory management, warehouse space utilization, warehouse picking, warehouse labor, and external challenges.
Inventory issues topped the list in the Kardex Impact Survey—and it’s no surprise why. As SKUs grow and supply chains fluctuate, even well-run operations can struggle to keep track of what's in stock, where it's stored, and how fast it's moving. Manual systems, disconnected tools, and reactive processes only add to the complexity.
Inventory control remains the single most frequently cited challenge among warehouse professionals, with 62.3% of survey respondents ranking it as their top operational hurdle.
Warehouses today manage not just more inventory, but also more complex inventory. We're talking: serialized parts, lot-controlled items, kitted assemblies, high-value components, and temperature- or security-sensitive stock.
And yet, many facilities still rely on spreadsheets, disconnected storage zones, and time-intensive physical audits to manage it all. Discrepancies pile up, shrinkage becomes harder to detect, and staff spend hours chasing parts rather than picking orders.
And to make it worse? Poor inventory control has a ripple effect, resulting in delayed orders, costly rework, missed production deadlines, and frustrated customers. When stock isn’t where the system says it is—or isn’t in the system at all—everything from forecasting to fulfillment grinds to a halt.
“Everything is trackable and secure”
- Kardex Remstar Survey Respondent on the benefits of automation
While warehouse automation technology isn’t a silver bullet, many respondents who have already invested in automation say that inventory control was one of the first and most impactful areas of improvement.
46% of Kardex Remstar customers report that inventory control has significantly improved since implementing automation, highlighting a clear opportunity for those still struggling with manual processes.
Inventory visibility is one of those challenges that hides in plain sight—until it’s too late. In our survey, 30.2% of warehouse leaders identified it as a top operational pain point, and for good reason. When visibility breaks down, warehouses quickly lose control over stock levels, replenishment timing, and picking accuracy.
Distribution environments aren’t just dealing with bulk inventory anymore. They're navigating thousands—or even tens of thousands—of SKUs across multiple zones, buildings, or workflows. And while demand can fluctuate hour by hour, visibility often lags by days or even weeks. This leads to stockouts, over-ordering, inaccurate picks, and labor hours lost to hunting for parts that should be there, but aren’t.
These challenges become even more pronounced when inventory is fragmented across multiple systems. Some stock might be logged in an ERP, some in spreadsheets, and some—worse—in employees’ heads.
Without a centralized, real-time view of what’s where and how fast it’s moving, teams are forced to make decisions based on guesswork rather than facts.
“We no longer have parts in six different places.”
- Kardex Remstar Survey Respondent on the benefits of automation
This is why visibility is often the first domino in the warehouse performance chain: without it, everything downstream—picking, packing, cycle counting, and replenishment—requires more time, labor, and corrections.
For those who have turned to automation, tools like integrated WMS and inventory management platforms provide real-time transparency across SKUs and locations.
It’s no wonder that visibility improves dramatically for Kardex Remstar customers who centralize and digitize their storage environments.
While only 9.4% of survey respondents ranked returns management as a top operational challenge, it’s a silent disruptor that’s becoming harder to ignore, especially for facilities managing complex product lines, e-commerce orders, or aftermarket parts.
Returns are inherently messy. Items are returned without clear labeling, in damaged packaging, or without accompanying documentation. In many facilities, they’re temporarily set aside to be dealt with “later,” only to disappear into mislabeled bins or unstructured storage zones. This creates a vicious cycle: returned items go uncounted, inventory accuracy suffers, and valuable stock remains unavailable for resale or redeployment.
The stakes are high. A delayed or lost return doesn’t just create operational drag; it can also lead to customer dissatisfaction, compliance risk, and inventory distortion. In industries such as medical devices, electronics, or aerospace, mismanaged returns can have far-reaching regulatory and safety consequences.
What makes returns so tricky is that they don’t follow the standard inbound flow. They arrive irregularly, in unpredictable volumes, and often require inspection, reconditioning, or repackaging. Facilities without a clear, structured returns process usually find these items “falling through the cracks," or worse, re-entering inventory without proper traceability.
For warehouses that have adopted structured, automated workflows—especially those with centralized, digitally logged storage—returns become easier to process, track, and account for.
Space challenges ranked as one of the top operational barriers in the Kardex Impact Survey. Between rising lease rates, expanding product lines, and pressure to move operations closer to demand, many warehouses are outgrowing their layouts faster than expected.
Space isn’t just a real estate issue—it’s a workflow issue, a cost issue, and a growth inhibitor. In our survey, 46.2% of warehouse leaders said space constraints are a significant operational challenge. And the problem isn’t always that facilities are too small—it’s that they’re too rigid. When static shelving and floor-level storage dominate the layout, operations get boxed in—literally and figuratively.
Warehouse square footage is increasingly expensive. Lease costs are rising across the U.S., with industrial rent growth hitting record highs in recent years. Yet most facilities still operate in two dimensions, leaving valuable vertical space underutilized.
As SKUs grow and product lines diversify, the common solution is to sprawl: taking over adjacent areas, leasing off-site storage, or creating overflow zones that further fragment operations.
And it’s not just about where you store goods—it’s about how space impacts productivity.
When aisles are crowded and high-turn SKUs are buried in hard-to-reach bins, workers spend more time walking, searching, and navigating than actually picking. This creates a compounding effect, resulting in longer fulfillment cycles, more picking errors, and increased labor costs.
“We turned our inventory area into manufacturing space.”
- Kardex Remstar Survey Respondent on the benefits of automation
For many Kardex Remstar users, optimizing space was the first—and most visible—win. Vertical storage systems, such as Vertical Lift Modules (VLMs) and Vertical Carousel Modules (VCMs), enable teams to consolidate inventory, reclaim ceiling height, and free up critical floor space for revenue-generating operations. In fact, 78% of Kardex Remstar customers listed better space utilization as a top benefit.
Picking isn’t just about speed. It’s about precision, consistency, and scalability. As SKU counts rise and customer expectations shift toward faster fulfillment, pick accuracy becomes harder to maintain. In the Kardex Impact Survey, 41.5% of warehouse leaders identified accuracy as a significant challenge, while many others flagged seasonal demand spikes and high training turnover as compounding issues.
For many, the picking process is where efficiency is won or lost.
Inaccurate picks create some of the most visible and costly issues in warehouse operations: returned orders, rework, delayed shipments, and customer churn.
And yet, in many facilities, accuracy is sacrificed in the name of speed—or lost to chaotic storage layouts, poor labeling, and lack of guided processes.
According to our survey, 41.5% of respondents cited pick accuracy as one of their biggest challenges, making it the third most common issue behind inventory control and space constraints. And for mid-sized warehouses, picking accuracy was a top challenge.
And the root causes are easy to spot: static shelving that hides SKUs, inconsistent slotting rules, confusing labeling, or temporary employees unfamiliar with the layout.
The pressure to pick quickly, especially in e-commerce or high-throughput environments, only increases the chance for errors.
And with modern consumers expecting next-day shipping or faster, there’s little room for mistakes. In a system that relies heavily on tribal knowledge and manual checking, even the best teams can’t maintain high accuracy at scale.
Want to learn more? We explore this concept in more depth in our post on inventory accuracy and stock visibility.
“Less time finding parts. More time getting work done.”
- Kardex Remstar Survey Respondent on the benefits of automation
Kardex Remstar solutions approach this challenge with a goods-to-person workflow that removes much of the guesswork from the process. But even more than speed, these systems bring structure, enabling teams to pick accurately, consistently, and with confidence, even during peak periods or with newer staff.
Whether it’s a seasonal rush, a sudden supply chain catch-up, or an unexpected bump in orders, demand spikes expose the weak points in a warehouse operation. In our survey, 17% of respondents said managing surges in picking demand is a top challenge, and while that number may seem modest, its impact is anything but.
That’s because spikes rarely arrive with a warning. Promotions hit. Suppliers catch up. Product launches create fulfillment chaos. And in operations that rely heavily on manual picking, even a 20% uptick in volume can slow the entire system. Orders back up, labor teams get stretched, and quality starts to slip.
The most common ‘solution’? Hire more temporary staff. However, this often introduces new problems, including lengthy onboarding times, inconsistent picking, and a higher likelihood of errors. In fast-moving environments, the lack of standardized, scalable workflows becomes painfully apparent—and costly.
In fact, 56% of Kardex Remstar customers surveyed operate with 24 or fewer employees, and still scale effectively.
Kardex Remstar systems are designed to help lean teams stay responsive. Whether that means faster picks, shorter training time, or automated batching, automation adds elasticity to fulfillment operations, without relying on temporary labor or sacrificing accuracy.
Accurate replenishment is one of the most deceptively difficult challenges in the warehouse. On the surface, it sounds simple: keep fast-moving SKUs stocked and replenish them before they run out. But in reality, many facilities struggle to execute replenishment consistently, especially when inventory is scattered, visibility is delayed, and replenishment logic is handled manually.
In our survey, 16% of warehouse leaders named replenishment as a top operational challenge. Poor replenishment leads to stockouts, backorders, rushed picking, and reactive purchasing—all of which create delays, waste, and higher costs.
The problem often lies in the disconnect between what’s picked and what’s restocked. Many systems rely on manual min/max thresholds, disconnected spreadsheets, or periodic cycle counts that don’t reflect real-time activity. When replenishment lags behind demand—or gets skipped entirely—teams are left scrambling to fulfill orders without the right materials in place.
For many Kardex Remstar users, automation helps close this gap. With software-integrated replenishment workflows and centralized inventory visibility, teams can trigger replenishment based on actual usage, ensuring the right product is always in the right place, at the right time.
Warehouses today face a dual labor dilemma: it’s harder to find good people, and it’s more expensive to keep them. Whether you’re running a 10-person operation or a global facility, the strain on workforce resources is real—and growing.
And while there’s no magic fix for a tight labor market, automation offers a powerful way to reduce dependency on manual work, improve training time, and help teams do more with less.
Across the logistics and warehousing sector, labor has become one of the most volatile and expensive inputs. According to our survey, 17% of warehouse leaders selected rising labor costs as a top challenge. While that may not seem like a dominant concern on paper, it’s a pressure that touches almost every aspect of daily operations—from hiring and scheduling to pricing and profitability.
U.S. warehouse wages have risen steadily over the last few years, fueled by inflation, competition for skilled workers, and broader shifts in the labor market. And the impact is far-reaching: every hour spent searching for SKUs, walking long aisles, or correcting picking errors now carries a higher financial cost.
The real issue? In many facilities, labor efficiency isn’t improving at the same rate as labor cost. Manual systems still dominate the workflow, and new employees often require weeks of training just to reach baseline productivity. Worse, operations teams are frequently forced to layer on overtime or temp workers during peak periods, pushing already strained budgets even further.
“We've increased throughput without hiring more people.”
- Kardex Remstar Survey Respondent on the benefits of automation
For facilities that have automated with Kardex Remstar, the return on investment often starts with labor savings. By enabling fewer people to do more—faster, safer, and more accurately—these systems help protect operations from rising costs without compromising service or scale.
Wondering about the true cost of labor? Head on over to our ASRS Cost Justification Calculator to see how much automation could save you.
While rising labor costs put pressure on the budget, labor shortages hit the operation even harder. In our survey, 14.2% of warehouse leaders named workforce availability as a core challenge—but based on broader industry trends, that number is likely underreported. The hiring market has tightened dramatically in recent years, with skilled labor increasingly hard to find and even harder to retain.
It’s not just about finding people—it’s about finding the right people. Warehousing roles often require physical stamina, attention to detail, and the ability to navigate fast-moving environments. And while the work is essential, it’s not always seen as attractive, especially in areas with competitive labor markets or high turnover.
Onboarding is another major hurdle. Even when new hires are available, many operations lack the tools or time to train them effectively. That leads to long ramp-up periods, inconsistent productivity, and costly errors. As a result, warehouse leaders are increasingly being asked to meet output goals with fewer personnel and do so without compromising accuracy or speed.
“Faster onboarding, quicker results. It just works.”
- Kardex Remstar Survey Respondent on the benefits of automation
By reducing dependency on manual labor and streamlining core workflows, Kardex Remstar systems allow teams to operate more effectively, even when headcount is tight. And when the right systems are in place, employees are more likely to stay, perform, and succeed.
Want to keep reading? Head on over to our article: How Automation Can Solve the Labor Shortage
Here’s how Kardex Remstar customers ranked the benefits of automation for the labor shortage:
When warehouses think about productivity, they often focus on speed. However, for employees, long-term performance also depends significantly on comfort, safety, and sustainability. In our survey, 13.2% of respondents called out ergonomics, health, and safety as a top challenge, and in reality, that concern is likely embedded in every aspect of modern warehouse work.
Traditional shelving and floor-level storage often require workers to perform inefficient, physically demanding tasks, such as walking long distances, reaching into deep bins, bending repeatedly, or handling heavy loads at awkward angles. Over time, these repetitive motions lead to fatigue, injuries, and lost time - not to mention lower morale and higher turnover.
And as the labor market tightens, keeping experienced employees safe and engaged isn’t just the right thing to do—it’s a business imperative. Injuries, strain-related absences, and long-term workers’ comp costs can erode operational budgets just as quickly as inventory errors or shipping mistakes.
“Kardex increased our productivity - safely.”
- Kardex Remstar Survey Respondent on the benefits of automation
For warehouse leaders looking to build sustainable, people-first operations, investing in ergonomic workflows is more than a wellness initiative—it’s a productivity multiplier. Kardex Remstar systems support this by minimizing unnecessary motion and enabling workers to do their jobs effectively, without physical wear and tear.
Not every warehouse challenge comes from inside the four walls. Global volatility—characterized by tariffs, trade restrictions, long lead times, and supply shortages—continues to ripple through operations. While operations teams can’t control global trade, they can control how prepared they are to weather the storm.
Facilities that build resilience into their infrastructure—from more innovative inventory management to on-site storage flexibility—are better positioned to adapt when the market shifts.
Even as the dust settles from the peak of the pandemic, global supply chains remain fragile. In the Kardex Impact Survey, 30.2% of warehouse leaders identified supply chain instability as one of their biggest operational concerns—and for good reason. Delays, material shortages, unpredictable lead times, and volatile demand continue to put pressure on planning, inventory, and fulfillment.
The challenge is bigger than logistics. When raw materials or components arrive late—or don’t arrive at all—warehouse teams are left scrambling to adjust schedules, reallocate stock, or push back shipments. This instability cascades across departments: procurement runs hot, operations runs lean, and customer service takes the heat.
The problem is compounded by just-in-time inventory models that were never built to absorb this level of disruption. With minimal buffer stock on hand and limited space to store excess inventory, many facilities find themselves vulnerable to even minor delays. And with global events—from shipping lane blockages to geopolitical tensions—continuing to affect supply flow, instability is no longer the exception. It’s the environment.
In our article on tariff-proofing your warehouse with ASRS, we outline how automation can help operations build flexibility into their physical infrastructure, enabling facilities to hold more inventory on-site, adapt to changes faster, and reduce reliance on risky external storage networks.
“We're more resilient now. Less scrambling, more control.”
- Kardex Remstar Survey Respondent on the benefits of automation
While no warehouse can eliminate supply chain risk entirely, Kardex Remstar customers are showing that the right automation investments can reduce the impact.
More space, better organization, and higher visibility help teams absorb delays, pivot faster, and stay productive even in uncertain times.
In a surprising twist, a small handful of customers indicated reshoring and nearshoring as a challenge in the comment section of our survey.
As global instability continues to affect cost, reliability, and delivery times, many manufacturers are turning inward—literally. Reshoring and nearshoring are on the rise across North America as companies look to move production closer to their end markets. But with that shift comes a new challenge: reconfiguring domestic warehouse and storage strategies to match.
Whether you're expanding an existing U.S. footprint or launching a new regional operation, reshoring often means starting from scratch—or adapting legacy facilities not built for modern fulfillment complexity. You may be bringing production closer to the customer, but that doesn’t automatically solve for SKU growth, inventory precision, or warehouse layout.
Facilities reshoring operations often face new storage pressures, from holding more raw materials on-site to managing smaller, more frequent shipments. And with domestic labor and real estate costs often higher than offshore options, every square foot and every labor hour must work harder.
For companies reshoring or nearshoring production, Kardex Remstar automation offers an opportunity to build smarter, not just bigger.
Centralized, high-density storage makes it possible to manage complexity with less space, fewer staff, and greater confidence.
Rather than experimenting with fringe workflows, warehouses are doubling down on the essentials: inventory control, order accuracy, replenishment, and traceability. These aren't flashy upgrades—they're the bedrock of reliable, scalable operations. And they’re the areas most vulnerable to labor gaps, rising SKUs, and shifting demand.
The big takeaway? Automation is no longer reactive—it’s proactive. Leaders aren’t just chasing efficiency. They’re building adaptable infrastructure that helps them stay competitive, even as conditions change.
This forward momentum is also reflected in strategic priorities. Reducing costs and improving speed remain key goals, but they’re now joined by more future-facing initiatives: gaining control over inventory, preparing for economic uncertainty, and building supply chain resilience. Teams aren’t just solving yesterday’s problems—they’re laying the groundwork for tomorrow’s success.
Optimizing your warehouse doesn't have to be a mystery. Check out our comprehensive warehouse best practices guide with 55 hands-on tips for warehouse managers to learn more.
We asked our customers to rank the following in order of priority for 2026. Here’s what they said:
At Kardex Remstar, we see this shift every day. Customers aren’t asking whether automation fits into their strategy. They’re asking how to expand it, what to automate next, and how to scale without compromise.
That’s the real future of warehouse automation—more clarity, not complexity.