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Warehouse Management Systems Market Driven by e-Commerce Paradigm

Published: Saturday, August 24, 2013
Last Updated: Saturday, August 24, 2013
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Growth of global market for Warehouse Management Systems (WMS) remained broad-based, occurring in both well-established and emerging market segments.

According to ARC Advisory Group, the global market for Warehouse Management Systems (WMS) grew by 8 percent in 2012. Growth remained broad-based, occurring in both well-established and emerging market segments. The WMS replacement cycle is responsible for much of the recent growth in the mature segments. As this dynamic diminishes, more enduring factors will propel future market growth. These factors include expanded adoption of WMS add-on modules, additional upgrades due to the benefits delivered by supply chain execution platforms, and increased demand driven by the omni-channel retail paradigm.

“Omni-channel retailers are integrating brick and mortar and e-commerce distribution channels. Traditional warehouses are being outfitted with WMS functionality to support the individual item handling requirements of e-commerce fulfillment,” according to Clint Reiser (creiser@arcweb.com), Enterprise Software Analyst and the principal author of ARC’s “Warehouse Management Systems Global Market Research Study” (http://www.arcweb.com/market-studies/pages/warehouse-management-systems.aspx)

Omni-Channel Retail Paradigm Drives WMS Sales

The omni-channel retail paradigm is increasing demand for WMS solutions by retailers, branded apparel companies, and 3PLs. Retail warehouses that traditionally focused on replenishing stores are being expanded with new zones focused on e-commerce. Retailers are also purchasing in-store WMS solutions to improve store-level inventory accuracy and expand their order and fulfillment options. Meanwhile, many branded apparel companies that sell direct to consumers through a corporate website are purchasing WMS to support their integrated distribution initiatives. Growth in e-commerce has also led to an increase in outsourcing to 3PLs to support this channel, as many 3PLs are establishing distribution centers specifically for e-commerce fulfillment.

Integrated Execution Platforms Increase WMS Value

Best-of-breed and ERP providers are touting the benefits offered by integrated supply chain execution platforms. The benefits of integrated supply chain execution processes are derived from the removal of operational silos; the ability to collect, aggregate, and share information; and the holistic operational and analytical perspective provided by the information improvements. ARC expects these benefits, in addition to the potential for lower total cost of ownership from quicker upgrades and implementation, to contribute to the growth in sales of WMS solutions in the near future.

WMS Add-on Modules Continue Growth

WMS revenues for add-on functionality such as labor management systems, warehouse analytics, and slotting optimization have been growing at impressive rates. Many WMS suppliers currently offer a wide range of available WMS add-ons and many other suppliers are currently developing add-on functionality to extend their current WMS solution set. ARC is forecasting above average growth rates for the add-ons as more suppliers extend their product lines to include additional add-on options and customers continue to adopt these solutions.


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