ABI Research Forecasts WMS Revenues at $10B by 2030

December 17, 2021

The warehousing sector has been forced to ramp up its digitization efforts considering the increased order volume and growing omnichannel trends due to the e-commerce boom. Global investment in Warehouse Management System (WMS) platforms surged from US$2.3 billion in 2019 to over US$2.5 billion in 2020, indicating an 8% year-over-year growth. The biggest investment in WMS, unsurprisingly, has come from logistics service providers with over US$636 million last year. Investments in retail and food and beverages follow suit with US$509 million and US$483 million respectively. According to ABI Research, worldwide WMS market revenues will have a Compounded Annual Growth Rate (CAGR) of over 23% from 2021 to 2030 and exceed US$10 billion in revenues by 2030.

“Companies are starting to combine the value of multiple hardware and software solutions. Productivity technologies can achieve far greater return on investment if combined correctly with other technologies. For example, by combining location tracking data with a voice solution, warehouses using a WMS can optimize workflows by minimizing distance traveled based on a worker’s whereabouts,” explains Adhish Luitel, Industry Analyst, Supply Chain Management and Logistics at ABI Research.

In terms of adding innovation, the WMS market has been seeing some compelling developments. Advancements in data collection and tracking allow more insights into warehousing operations, as well as boosting predictive analytics. Operators can now deploy Machine Learning (ML) algorithms that capture the data and give insights in real time. A wider adoption of blockchain will allow the supply chains to become more connected, accountable, and visible. Blockchain applications within WMS could fully streamline workflows and link them all together via encryption to ensure comprehensive security. Robotic Process Automation (RPA) is another exciting development. It combines the use of software, robotics, Artificial Intelligence (AI), and ML to create a much faster way of completing inventory management tasks like picking up or putting back items onto shelves.

“There is also a need for warehouse operators to formulate a strong inventory management strategy. Inventory management is becoming an increasingly crucial pillar of supply chain management. Ensuring that workers can access the right technology to monitor inventory efficiently is important, but automated solutions for inventory management should also be explored,” Luitel adds.

The days of stand-alone, on-premise WMS software are numbered,” said Wayne Newitts, CMO of Logiwa, a leading provider of cloud-based WMS solutions. “To meet ever-increasing demand, online DTC retailers and 3PLs need intelligent systems that both drive warehouse efficiency and can easily integrate with supply chain partners including e-commerce platforms and transportation providers.” Newitts added, “The dramatic growth in the online direct-to-consumer market is driving technology innovation, which in turn is helping to drive that growth. Integrated robotics systems and AI-powered pick, pack and ship applications are not the future of warehouse management - they are happening today.”

Similarly, technologies do not just have to integrate well with the WMS platform, they also need to add value when using other types of technologies. Vendors that develop solutions that integrate well with various levels of automated processes and technologies will be most likely to achieve long-term success. As a sign of the growing maturity of the WMS market, a wide number of leading vendors such as Manhattan Associates, Oracle NetSuite, Blue Yonder, Ehrhardt Partner Group (EPG), and Mantis offer compelling end-to-end solutions.

Alan Prillaman, VP, Client Services with Open Sky Group noted, ““To support the supply chain transformations many organizations are currently making via the use of modern supply chain platforms such as Blue Yonder warehouse management and other key logistics-based solutions, Open Sky Group offers a compressed “time-to-value” period to clients when implementing new systems using our methodology of disciplined agility which places a priority focus on the utilization of industry best-practices and our unique ability and philosophy to utilize standard product capabilities to meet complex business needs. In further support of compressing the time-to-value period, we have developed a pre-built and validated WMS template that creates the foundation for our Blue Yonder implementations. In addition, Open Sky Group is supporting our clients’ need to maximize warehouse employee productivity to meet increasing fulfillment demands in the midst of a labor shortage through the introduction of warehouse automation technologies which supplement the native capabilities of the WMS and are enabled through the flexible integration capabilities of the Blue Yonder platform.”

“Vendors should be ensuring that they have a well-developed partner network and integration strategy relating to complementary technologies. Technological vendors and solution providers should be paying close attention to indoor Real-Time Location System (RTLS) providers,” Luitel concludes.

Bob Bova, President, CEO of AccuSpeechMobile added, "As manufacturers, distributors and 3PLs grapple with the new expectations of supply chain delivery, the review of their WMS software is a key cog in that process. Looking to upgrade, replace or augment these systems will be on the docket for these organizations that are expected to evolve into this modern day delivery heavy paradigm."

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