Material handling and intralogistics are evolving from background processes into strategic functions, says Vijay Mathew.

Material handling and intralogistics are no longer just about moving goods from point A to point B. In 2025, amid global supply chain volatility, labour shortages, and the push for greater efficiency, these functions have become core to industrial competitiveness. The factory floor – once filled with manual trolleys, forklifts and basic shelving, is being reshaped by smart automation, robotics and connected systems. The focus is not just on speeding things up but building resilience, improving safety, tightening control over inventory, and unlocking flexibility in operations. Companies that once treated warehousing and material movement as back-end infrastructure are now investing in it as a strategic asset.

From manual muscle to intelligent machines

The shift away from manual handling to automation is well underway. Automated Storage and Retrieval Systems (AS/RS), Automated Guided Vehicles (AGVs), and Autonomous Mobile Robots (AMRs) are now central to how materials move within factories and warehouses. These technologies don’t just replace people – they rethink how material flows. AS/RS setups can handle thousands of stock movements per hour with high accuracy. AGVs and AMRs use vision and real-time routing to adapt to production needs as they change throughout the day. Leading manufacturers across India and Southeast Asia are using AMRs to move raw materials to production lines on demand, reducing wait times and improving overall throughput. For instance, Falcon Autotech’s NEO system – an AI-enabled AS/RS solution – is being deployed to automate storage and retrieval in e-commerce and FMCG facilities. Similarly, Armstrong Dematic is working with large FMCG players in India to implement robotic warehouse automation solutions that streamline intralogistics operations.

Software is quietly doing the heavy lifting

Behind the scenes, software is what ties everything together. Platforms like Warehouse Execution Systems (WES), fleet orchestration tools, and IoT dashboards are becoming the nervous system of the modern warehouse. They provide visibility into inventory, predict when machines need maintenance, and help optimise workflows without the need to redesign the floor. Digital twins, for example, are now used to simulate entire intralogistics processes before changes are rolled out – helping avoid trial-and-error disruptions. As AI tools mature, more decisions around routing, resource allocation and maintenance will be made autonomously.

Workforce safety and labour challenges are driving change

Automation is also being driven by practical labour challenges. Industrial workforces are aging. Repetitive, physically demanding jobs are harder to fill and retain. At the same time, there’s more focus on safety than ever before. Companies are responding with smarter tools. Forklifts now come with collision detection and load sensors. AMRs are built to safely navigate around people and respond to unexpected obstacles. These technologies help reduce accidents and improve working conditions. Importantly, automation is not removing jobs – it’s shifting them. Workers are being trained to manage robots and oversee systems. Demand is growing for technicians who can program, monitor, and troubleshoot automated fleets.

Efficiency gains are also supporting sustainability goals

As energy prices rise and climate goals become more urgent, material handling systems are being designed to use less energy and space. AMRs with better battery management, regenerative braking in AGVs, and vertical storage systems are all helping reduce the resource footprint. Some industrial parks are now running intralogistics systems on solar microgrids. Others are using data to streamline how and when materials are moved, cutting idle time and excess stock. By enabling just-in-time delivery and reducing overstocking, smart systems are also helping lower waste and improve resource planning across the board.

India is warming up to smart intralogistics

India is still in the early phases of this transition, but momentum is picking up. Large global manufacturers are leading the way – particularly in automotive, pharma, and FMCG. Companies like Godrej & Boyce have made strategic moves, such as acquiring Armes Maini to scale up intralogistics capabilities, while FedEx is setting up India’s first fully automated air cargo hub to support faster movement of pharma and auto exports. These moves reflect a growing recognition that smart intralogistics is critical for India’s industrial competitiveness.

But the real opportunity lies in how Indian startups are stepping in to localise innovation. We’re seeing new companies offer modular AMRs, low-cost software platforms, and retrofit automation solutions that work for small and mid-sized businesses. For example, Addverb Technologies (based in Noida, India) has designed Veloce – a multi-carton picking mobile robot with a vertical design to enhance warehousing and intralogistics operations. Government policies like the National Logistics Policy and PLI schemes are also pushing modernisation. As new industrial parks are built with automation readiness in mind, India could leapfrog the legacy challenges seen in more mature markets.

Conclusion

Material handling and intralogistics are evolving from background processes into strategic functions. As supply chains become more complex and expectations rise, the ability to move materials safely, efficiently, and intelligently will separate leaders from laggards. Companies that treat intralogistics as a core capability – not just a cost centre – will be better placed to adapt to future disruptions and scale their operations with speed and confidence.

Vijay Mathew is Director, Industrial Growth Advisory at Frost & Sullivan. With over 18 years of experience, Vijay is a seasoned advisor known for providing strategic, unbiased, and objective advisory services across a variety of industries. His areas of expertise include automation, process control, industrial sensors and instrumentation, and electronic test and measurement.