Warehouse Management System (WMS) Market size is set to grow at a CAGR of 15% during the forecast period 2020-2025 and projected to reach $5.54 billion by 2025. WMS software application accomplishes the management of warehouse resources such as equipment, labor, space, tasks, and material flows, which is intended for distribution center management. The upsurge in the E-commerce industry is acting as the primary driving factor of the warehouse management system market. Additionally, the increase in the adoption of on-cloud WMS solutions, evolving multifarious distribution channels, and globalization of supply chain networks are contributing to the expansion of global warehouse management system market size.
Type - Segment Analysis
Presently, the software held the largest share in the warehouse management system market size in 2018. This is majorly due to the increasing adoption of WMS software by the small and midsized enterprises (SMEs). In addition to this, the globalization of supply chain networks coupled with the growth in the share of cloud-based WMS software solutions is burgeoning the demand for WMS software, globally. But, the services segment set to grow at a CAGR of 16.5% during the forecast period.
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Deployment - Segment Analysis
Increasing awareness regarding cloud software offerings such as cost savings and efficiency is gaining traction from companies. The great flexibility afford by the cloud system is attracting even the small firms to invest less capital in order to establish their footprints in the global warehouse management system market. Thus, the rise in the adoption rate of the cloud software systems by the SMEs is also leading to have a positive impact on the growth of the WMS market.
Geography - Segment Analysis
North America's warehouse management system market share dominated the global warehouse management system market, accounts for 54%, followed by Europe and APAC. It is owing to the presence of a huge number of companies with warehousing and distribution operations, worldwide. Furthermore, developed third-party logistics (3PL) networks and growth in the e-commerce industry are together augmenting the North America warehouse management system market revenue. The U.S. is contributing to a major share in the growth of the North America warehouse management system market. This is because of the shift in companies’ preference to handle most of their operations on the cloud, thereby creating a significant number of opportunities for the adoption of on-cloud WMS solutions in this country. Asia-pacific region is projected to grow at a fastest CAGR during the forecast period. It is due to the emerging economies which include China and Japan growth in the warehouse management system software market, as of 2018.
Drivers – Warehouse Management System Industry Outlook
The predominance of WMS in upgrading the supplier and customer relationship management is improving the growth of the warehouse management system market
The warehouse management system plays a major role in reducing the number of errors during the processing of orders and support product delivery on-time to the end-users with minimum distribution costs. Furthermore, the suppliers are implementing the WMS to experience greater efficiency and productivity. The expansion of e-commerce and the need for Omnichannel fulfillment is influencing the growth of the WMS market. ERP software resembles similar capabilities of WMS software and have control over tracking the course of inventory items picked, packed and shipped, thereby helpful in maintain the customer relationship management.
Advantageous WMS is attributing the augmentation in the warehouse management system market revenue
The WMS provides increased inventory accuracy, reduced lead and fulfillment time, effective space utilization, improved customer service, and optimized warehouse productivity. All these factors together contributing to an increment in the global warehouse management system market.
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Challenges – Warehouse Management System Industry
· The cost factor of on-premise warehouse management system is hampering the growth of the warehouse management system market
However, the high implementation cost associated with the implementation of an on-premise WMS is unfavorable to the SMEs. Besides, data privacy and security concerns are restraining the growth of the warehouse management system market. This WSM system requires the up-gradation of the software constantly.
Market Landscape
Agreements, product launched, and R&D activities are key strategies adopted by players in the warehouse management system market. In 2018, the market of the warehouse management system has been consolidated by the top ten players accounting for 49% of the share. Epicor Software, SAP, Infor, IBM, Manhattan Associates, Oracle, JDA Software, PSI Logistics, Tecsys, and High Jump are the warehouse management system’s top 10 companies.
Agreement/Product Launch
In May 2018, Infor and ELSEN GmbH & Co., signed an agreement of partnership. Through this partnership, ELSEN has enhanced its digitization strategy, by implementing Infor SCE, the company’s warehouse and transport management solution. This, in turn, enables ELSEN to monitor and control real-time inventory which improves the fulfillment processes and customer experience as well.
JDA Software announced the launch of a JDA Luminate, as a part of the next-generation solutions and core product enhancements, in May 2018. JDA Luminate is built in such a manner so that it readily integrates with various digital edge technologies namely the Internet of Things (IoT), AI, software-as-a-service (SaaS), and advanced analytics. This intelligent product delivers seamless customer experiences.
Key Takeaways
North America held a larger share in the warehouse management system market owing to the increasing demand for cloud software to improve the warehouse management and rise in the investments by multinational companies in the U.S.
The growing acceptance of cloud WMS systems to standalone warehouse management system is likely to aid in the market growth of the warehouse management system.
An increase in the digitization of supply chain management will increase the market demand for the warehouse management system market in the near future. This is because of the growing investments in the research and development department set to provide a significant number of opportunities for the warehouse management system market during the forecast period.
The integration of innovative technologies such as Artificial intelligence (AI) and augmented reality will amend the errors occurring due to the fallacious human interactions and increase the rate of automation in the warehouse operations.
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