Kenco opens new innovation lab for warehouse automation testing

A Decade From 10,000 Square Feet to 30,000

The original lab was created to help the company understand how emerging technologies such as automation would affect its operations.

“In 2015 we kind of started this journey. We put together a 10,000-square-foot innovation center because we wanted to understand how emerging technology, automation technologies, would be applied in our operation and how that would affect operation as well as our customers,” said Denis Reilly, president and CEO of Kenco, at the lab’s Sept. 10 ribbon-cutting. “And back then a lot of things were in play — nothing as solid as it is today — but we were seeing all these emerging initiatives going on out there.”

Reilly credited Kristi Montgomery, vice president of strategic transformation, with starting that process roughly 10 years ago. As the technology grew, so did Kenco’s technology ambitions.

“As both the industry and Kenco’s automation ambitions continue to grow, that space no longer supported our breadth of technologies that we wanted to evaluate, demonstrate, and develop,” Reilly said.

Kenco operated 140 locations across North America and had more than 7,500 employees as of August 2025, roughly 800 of them at its Chattanooga headquarters.

The opening drew former U.S. Sen. Bob Corker and Tennessee state Sen. Bo Watson, along with representatives from the Chattanooga Area Chamber of Commerce, Hamilton County Schools and the University of Tennessee campuses at Chattanooga and Knoxville. A large automation project with Thomas Goldsby, the Dee and Jimmy Haslam Chair in Logistics at UT Knoxville’s Haslam College of Business, is already underway, Reilly said.

Vendor Neutrality Shapes the Testing Environment

The lab is intentionally vendor-neutral by design. An OEM gets a working building to run equipment in, while a customer gets a look at that equipment with no purchase order attached. Kenco collects evaluation data on both. Neutrality is also the thing a 3PL can offer that a manufacturer’s own demonstration center cannot, because Kenco has no product line to defend when a system underperforms on its floor.

“This facility actually serves as more than a lab. It’s a working environment where we can validate technologies, we can develop solutions, and we can explore what is next for our customers and our operations,” Reilly said.

Warehouse Automation Testing and the Labor Question

Every automation rollout eventually has to answer the same question from the warehouse floor: How does it affect labor?

“Automation is not about replacing people. It’s about enabling them,” Reilly said. “These solutions help reduce excessive walking, eliminate tedious and repetitive work, minimize physically demanding tasks, and create safer, more sustainable work environments.”

This enablement via automation will continue to have a human in the loop. It will be a much more efficient associate, powered by these emerging technologies.

“Now, as you tour the facility today, we encourage you to view these technologies through the lens of a warehouse associate, because that’s where it’s geared towards,” Reilly told the room. “The senior warehousemen — you’re having to do picking and you’re having to do warehouse activities — try to take it from that perspective so you can understand how it’s going to impact their lives as well as the day-to-day operations out there.”