Warehouse managers in 2026 face steep challenges in managing storage, throughput, and fulfillment in a business climate that’s rife with uncertainty. On any given day, geopolitical developments or changes in tariff policy can trigger a surge in the amount of inventory that needs to be stored or shipped back out again.
To help manage those wide swings, many facilities have turned to automated material handling equipment and robotics. And now another technology—artificial intelligence (AI)—is offering even greater potential to ease the load. Computerized AI brains could someday take over warehouse operations and cut labor demands, enabling smaller cadres of employees to manage bigger workloads.
But many experts say that AI and other warehouse technologies will never fully replace a human workforce. Automation might be able to take over certain repetitive tasks, but it can’t replicate human judgment or insight. What it can do, however, is supercharge workforce performance by reducing obstacles and inefficiencies.
“I don’t think AI is going to replace labor, just some very mundane tasks. But it will elevate the performance of individuals,” says Tony Wayda, consulting principal of client advisory and partnerships at JBF Consulting, a logistics strategy advisory and technology integration firm. “AI could enable workers to make faster and better decisions. Whether it’s choosing a pick path, planning restocking, or whatever, it could make suggestions, like ‘Here are some better options; you could do A, B, or C.’”
Applied to warehouse operations, AI could also lead to improvements in areas like workplace safety by analyzing computer-vision data to provide preemptive collision detection. Or it could accelerate the onboarding and training of new employees by using augmented reality (AR) or virtual reality (VR) to simulate the tasks that an individual will do. That could allow them to learn new skills before ever stepping onto the DC floor.
“Warehouse labor is notoriously high turnover, so if we can get someone onboarded 30% faster and give them better training systems, your people will be happier and you’ll have less turnover,” Wayda says. The technology could even help workers earn bigger paychecks, since many DCs offer monetary incentives for exceptional picking speed and accuracy. “If AI can help them do that, it’s a win” for both the worker and the company.
Faster onboarding and training for warehouse workers could be one of AI’s biggest payoffs, agrees George Ninikas, senior vice president of accounts at Ortec, an Atlanta-based developer of supply chain optimization software and analytics solutions.
“AI tools will be a tremendous boost for workers,” Ninikas says. “It will enable more personalized training sessions depending on their experience. So maybe they won’t need weeks and months to learn how to use a WMS [warehouse management system] or a planning tool, because they can interact with the AI assistant and be up and running.”
AI MEETS THE LMS
When it comes to AI in the warehouse, much has been written about the assist it can give workers. What has sometimes gone unnoticed is the boost it can give supervisors and managers—particularly when AI is combined with labor management software (LMS).
A case in point is ODW Logistics, a Columbus, Ohio-based third-party logistics company (3PL) that deployed an AI-enabled LMS platform from Reston, Virginia-based software developer Takt in November 2024. The company is now running the software at a handful of sites, with plans to eventually implement the platform at about two dozen of its fulfillment and warehousing facilities, according to Brian Drees, ODW’s senior director for operations excellence.
One of the key benefits of an AI-enabled LMS like Takt is that it provides real-time performance tracking, which allows supervisors to respond to anomalies as they occur. For instance, the system would be able to tell that a certain worker took 25 minutes to begin their tasks after arriving on site and automatically alert a manager. The manager could then investigate the cause of the holdup and remove any operational barriers—a move that would both get the work back on track and make the worker feel supported. “Employees just want to do their work, not have obstacles to jump over to get it done,” says Drees.
It works the other way as well. If another worker were running at 120% of their target picking rate, the system would notify a manager of that too, enabling the manager to praise the speedster for a job well done—and do it promptly.
Either way, it’s a win, Drees says. “There’s nothing better than people getting kudos [for outstanding performance] or getting help if they’re struggling,” he notes. “It raises employee morale because people like to feel they’re succeeding and improving.”
That applies to supervisors as well as to workers on the floor, Drees points out. He says the Takt LMS has helped in the regard by giving ODW’s supervisors the tools and the data they need to coach more effectively. “It’s a huge benefit for the management team, to do better at what they’ve already been doing in the past,” he says.
The numbers attest to the project’s success. Since it deployed the Takt labor management system, ODW has seen a 29% improvement in workforce performance, according to the software vendor.
A PROPER INTRODUCTION
The benefits of bringing AI-enabled LMS into the warehouse seem abundantly clear. But the experts also warn that managers have to introduce the new technology in the right way, or else it could backfire.
“Some companies are treating AI as magic, ‘holy grail’ technology, but they should really treat [an AI implementation] like any other change management initiative,” says Ortec’s Ninikas. “You shouldn’t automate everything super quickly, without involving the front-line workers. You can’t [just assume] all problems will be resolved just by saying the two letters ‘A’ and ‘I,’ because you will not see success. For this to work, you need to build trust by taking incremental steps and making a cultural shift.”
Wayda of JBF Consulting offers similar advice. “Get the front-line people involved early,” he says. “Because at the end of the day, this is not a technology project; it’s a strategic operational project that just happens to use AI.”
And as with any other strategic project, DC leaders first need to identify exactly what they want to accomplish with AI and what metrics they’ll use to gauge their progress. “It’s current and it’s cool,” Wayda says, “but is it successful? [Does it deliver on] the original business proposition?”
When skillfully deployed, AI can provide benefits throughout the DC, he says. “It makes for a happier warehouse employee. But the message has to be not to make them use it, but to offer them a tool and tell them it can make them better. People want career development, reskilling, and career paths.”
