Third-party logistics providers (3PLs) face increasing pressure from client demands, seasonal shifts, and rising operational costs. However, most warehouses weren’t built with today’s level of complexity in mind. Ripping everything out and installing a new automated system is costly and risky. 

Learn why 3PLs across the globe are adopting retrofit automation solutions.

The Real Cost of Rip-and-Replace Automation Systems

Many 3PLs serve multiple clients from within the same facility. They simultaneously juggle different SKUs, order profiles, and fulfillment timelines. A complete system overhaul can cause weeks or months of undesirable downtime. Let’s break down all the hidden costs associated with a rip-and-replace approach:

• Revenue loss from a slight outage can lead to missed SLAs, frustrated clients, and potential contract losses. 
• The time taken to train staff in using modern automation systems. 
• Customization complexity, where a system that works for one tenant might not work for another. 
• Uncertain ROI arising from the high upfront CapEx of complete facility automation. 

Retrofit-First Automation: Real-World Use Cases  

Retrofit-first automation strategies allow 3PLs to enable automation in a phased manner, without disrupting existing workflows. Let’s look at some examples: 

1. Pick-to-Light Retrofit Solutions for Seamless Order Fulfilment: 3PLs supporting retailers must reduce pick errors during peak sales for seamless fulfilment. Instead of redesigning the warehouse, retrofitted pick-to-light systems can lead to:

• Reduction in picking errors
• Increase in order throughput

For example, a growing 3PL sought to unify batch and order processing into one system. By retrofitting a modular setup into existing racking, the 3PL could enjoy: 

• 5–7x improvement in productivity 
• 57% reduction in manual labor

1. Modular Bots for Zone-to-Zone Transport: 3PLs can use AMRs to handle intra-warehouse transport between picking and packing stations. These bots can work around humans and existing layouts and require no remodelling, leading to:

• Quicker go-live
• Improved labor utilization

For example, an apparel retailer needed to automate a complex pick module spanning four mezzanine levels with ceilings as low as 8 feet. By implementing an Omni Rack Robotics system, the retailer could enjoy smooth installation and flexible scaling, along with: 

• 85% reduction in manual labor
• 65% annual cost savings

1. Dynamic Pickwalls to Handle Demand Fluctuations: Dynamic pickwalls are an excellent way for 3PLs to streamline picking and ramp up throughput. During peak seasons, pickwalls can be scaled up and repositioned to bring high-velocity SKUs closer to pack stations, resulting in: 

• Increased picking efficiency 
• Lower cost/pick

For example, a grocery distributor sought to launch a D2C channel, but had limited automation, rising labor costs, and no spare headcount. To handle products across 800 SKUs and keep up with variable demand, the distributor implemented a retrofit standalone system, leading to: 

• 4x productivity boost
• 80% error reduction 

1. Omni Rack Robotics for Improved Shelf Utilization: Many 3PLs have unusable high bays that result in dead space or investment in expensive cranes. Omni Rack Robotic systems can turn such spaces into fulfillment assets, opening doors to: 

• Better fulfilment 
• Reduced delays

For example, an apparel manufacturer had five aisles of high-bay racking that were inaccessible due to obsolete crane systems. New automation options would have required a full rip-and-replace, costing over $18M and causing months of downtime. By implementing an Omni Rack Robotics system, the manufacturer could

• Recover 11,000 SKUs from previously inaccessible shelving
• Minimize labor with no additional infrastructure cost 

Digital Twins: Derisking Deployment Across Tenants

One of the most effective tools enabling retrofit-first strategies is digital twins: a virtual replica of the warehouse that simulates real-world operations. They ensure validation without risk and automation without surprises by reducing guesswork and making every investment more precise, intentional, and measurable. 

3PLs can validate performance, spot potential issues, and stress-test the system before warehouse automation deployment. This includes:

• Flow modeling for new tenants
• Deploying and assessing the impact of software updates virtually 
• Simulating seasonal demand spikes
• Testing for peak load performance in a zero-risk environment 
• Planning capacity across zones

For shared warehouses, this is a huge advantage. It enables operators to answer key questions like:

• Will this new client’s SKU profile break our flow?
• How many bots do we need for Black Friday?
• What’s the ROI of retrofitting one aisle versus five?

Ready to Retrofit Your Warehouse for What’s Next?

3PLs are in the business of speed, accuracy, and adaptability. In a market where product categories evolve overnight, the days of massive, fixed automation systems are fading fast.

If you want to keep existing operations running smoothly, match capacity to real-time demand, and stay profitable across multiple clients and demand spikes, a retrofit-first automation strategy should be your first choice. 

Let’s explore how modular systems, innovative software, and real-world modeling can future-proof your warehouse. Talk to our warehouse automation team today for a site assessment.

FAQs

What are the hidden costs of rip-and-replace automation solutions?

Rip and replace automation solutions have several hidden costs, such as: 

• Installation costs 
• Downtime costs
• Workforce training costs

How do retrofit automation solutions overcome these costs?

Retrofit automation solutions are easy to deploy and require no changes to existing warehouse infrastructure. They can be easily integrated into bays and shelves and do not disrupt ongoing operations. 

How does Cartesian Kinetics turn any rack into an automated rack?

Cartesian Kinetics‘ Omni Rack Robotics system retrofits directly into standard or mezzanine racks, transforming them into high-performance fulfillment engines.