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Warehouse Management market report transcript
Regional Market Outlook on Warehouse Management
The versatile business nature of the e-commerce industry is a key market driver of WMS, which is forecasted to be $1.5 billion by 2017, with a CAGR of 13.9 percent between 2015 and 2029.
Current Market Size
- The North American WMS industry is estimated to be $1.5 billion in 2017 and is expected to grow at a CAGR of 13.9 percent between 2015 and 2019
- Rebound in trade activities, requiring to manage highly efficient warehouse operations, increasing logistics outsourcing to 3PLs, and B2C e-commerce are the factors influencing WMS market
- Automobile, e-commerce, healthcare, and food industries are the major market drivers, where service level and lead time influence the growth of each market
- Tier-1 WMS providers with core functionalities and other peripherals are highly preferred by leading apparel retailers, such as Adidas, Nike in the US and Europe
Growth Drivers and Constraints
Growth of E-commerce Industry
- The e-commerce market is the key driver for the increase in WMS adoption
- In North America, e-commerce is growing at 8.3 percent CAGR (2017–2021), with a user penetration of 76.5 percent in 2017
- Fashion products contribute to 20 percent of the overall e-commerce market
- Omnichannel retailing by e-commerce industries has increased the need for WMS to provide high operational efficiency
Change in Warehouse Operations
- Increased adoption of automated material handling equipment needs updated WMS to have seamless integration
- Adoption of cloud-based technologies reduces capital cost and enables WMS to work smarter
- Multiple channel distribution and just-in time inventory requirement have necessitated WMS to be faster and smarter with additional features and functions, such as slotting, RF tracking, etc.
Customized Analytics Reports
- Data captured and past data analysis to develop a future plan to be competitive in business
- Data-driven warehouses help in identifying process bottlenecks
- Higher adoption rate of 3PL practice in North America initiates the necessity of defined performance metrics, customized to each organization
Upgradation and Maintenance
- WMS needs repetitive maintenance and constant upgrade of software, due to the changing nature of the warehousing industry
- WMS is prone to system bugs, which are to be considered while negotiating maintenance terms
Installation and Integration
- Changes in current warehouse process are to be captured carefully to customize WMS to suit requirements
- Training with respect to new functions and features will need labor skill from inter department
- The reluctance to change from the current legacy system to new WMS is an existing threat
- Shift from on-premise system to cloud-based technology will need high technical expertise for successful implementation
Market Dynamics and Trends
Supply chain professionals have begun to consider warehouse as a growth center rather than a cost center. So, robust WMS solutions with peripheral features are highly recommended for the retail industry to increase service levels with their automated warehouse systems.
- This is the basic WMS, which focusses only on key warehouse operations, which facilitate operators with necessary data
- The limitations include accuracy of data, single warehouse operation, and high customization cost
- The software had off-the-shelf functions, in which, only 60 percent was utilized
- This is highly customized with the best-in-class options, which caters to the need of each industry and buyer
- The advancements in automation and multi-region warehousing operation, due to evolving e-commerce industry, had provoked the development of advanced WMS
- The advanced WMS processes high level of information and provides bespoke reports, reducing the administrative work
- Advanced WMS supports new functions, such as slotting, RF tracking, and enables connectivity with mobile devices