Warehouse Execution System Market Size, Share & Trends Analysis Report By Component (Software, Service), By Deployment (On-premises, Cloud), By End-user (Consumer Electronics, Automotive), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global warehouse execution system market size was valued at USD 1.06 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 14.2% from 2021 to 2028. An increase in order volumes and velocity is the primary reason for the increasing adoption of the warehouse execution system (WES). The capabilities offered by the WES software enable the end-users to effectively and efficiently manage workflows within the warehouse or distribution center. Moreover, as WES shares the functions of warehouse management systems and warehouse control systems, it is increasingly gaining traction.

Warehouse execution system is a hybrid software system having capabilities of Warehouse Control System (WCS) and Warehouse Management System (WMS) and is an ideal solution for organizations having large order volumes and high throughput needs. It helps to coordinate equipment and labor through dynamic optimization, which helps facility owners manage resources and optimize facility operations. Moreover, with an increased order volume, the automated warehouse facilities must be equipped with the latest technologies to cater to the increasing need for agile fulfillment.

Manufacturers and warehousing service providers are increasingly focusing on automating processes in their facilities. More emphasis is being given to software solutions such as WES, which include various functions such as automation control, optimized order execution, intelligent routing, optimized workflows, automated sortation, real-time visibility, congestion management, among others.

WES software can be offered by the companies/vendors in a couple of ways. Firstly, the software can be provided by the vendors as a standalone software offering. This type of solution may have the functionalities of both WMS and WCS integrated into one. The second type of offering comprises WMS or WCS software with WES capabilities embedded into the existing software. This type of solution is largely preferred by companies that do not wish to replace the traditional WMS software.

The COVID-19 pandemic has also significantly impacted the warehouse execution system market. The restrictions imposed by the government forced individuals to increasingly use e-commerce sales channels for purchasing groceries and other items. Such high usage of online sales channels pushed companies to develop their warehousing infrastructure in terms of technology and space. Moreover, the growing emphasis on faster order fulfillment also contributes to market growth as logistics providers increasingly adopt WES software to increase logistical efficiency.

Component Insights

The software segment dominated the market in 2020 and accounted for the largest revenue share of over 68.0% in 2020. The segment is also anticipated to remain dominant over the forecast period. The high growth of this segment is attributed to the capability of the WES solutions to increase the potential of automated warehouses. This is achieved by managing labor, inventory resources, and machines against high order volumes and strict delivery timelines.

The warehouse execution system heightens visibility across the warehouse as it comprises the best parts of both the warehouse management system and warehouse control system. The features that increase end-to-end visibility include replenishment management, inventory management, mobile scanner integration, receiving/shipping management, among others.

Small or medium-scale operations can be easily moved to a single WES software. However, warehouses having complex inventory issues may still require continuing using the existing WMS or ERP solution. In such cases, WES can be integrated into the existing WMS and ERP solution, thereby providing additional benefits, including transportation management, order and wave management, management reporting, slotting, among others. Further, the services segment is anticipated to register the highest growth rate from 2021 to 2028. The increasing usage of WMS services, including consulting and training, support & maintenance, among others, is contributing to the WES market growth.

Deployment Insights

The cloud segment dominated the market and held the largest revenue share of more than 54.0% in 2020. The rise of cloud-based technology across industries has significantly transformed business processes. The deployment of the WES offering on the cloud enables the end-users to reduce the upfront cost while substantially increasing warehouse efficiency. Cloud-based deployment has seen a drastic improvement in terms of security over the years. Security improvements on account of curtailing data thefts have made cloud deployment a viable substitute for on-premises system deployment.

The segment is also anticipated to register the highest compound annual growth rate over the forecast period. Cloud-based system solution offers various advantages over legacy on-premises deployment. New technological innovations are always around the corner, which can make on-premises systems obsolete within a short span. The excellent compatibility of cloud-based systems with newer technology and services makes it a more justifiable and flexible option over on-premises deployment.

End-user Insights

The third-party logistics (3PL) segment held the largest revenue share of more than 29.0% in 2020. Also, the segment is anticipated to register the fastest CAGR of around 15.9% over the forecast period. Third-party service providers handle a large volume of products, which necessitate the adoption of automation technologies. Moreover, the e-commerce industry is witnessing a drastic increase over the years, with a greater number of people using online channels for purchasing. This has further increased the number of goods handled by logistics providers. Therefore, advanced warehouse software, such as WES, is increasingly being implemented by the logistics companies to improve warehouse productivity, accuracy, visibility and control, and reduce operating costs, among other operational and non-operational efficiency.

The automotive and food & beverages segment held the second and the third-largest share in the market in 2020. Automotive manufacturers, component providers, and resellers highly utilize warehouses for storing numerous products for long periods. As such, these companies must have efficient warehousing capabilities to ensure the quick movement of products. Warehousing operations are also a critical business area for companies engaged in food & beverage manufacturing companies. The limited shelf life of most food items requires strict and agile monitoring of items stored in the warehouse to reduce losses. The exceptional operational capabilities offered by WES enable manufacturers to increase their revenue and reduce losses.

Regional Insights

Europe dominated the market and accounted for the largest revenue share of more than 32.0% in 2020. The region is also expected to continue its dominance over the forecast period. High awareness of cloud-based solutions is one of the key reasons for the growth of the sector. Moreover, the region also has several large and established automotive manufacturers in countries such as the U.K., Germany, and France, which is also contributing to the region's high share and growth. Led by the U.S., North America held the second-largest revenue share in the market in 2020. The presence of a large number of WES software providers, coupled with the high degree of logistical activity in the region, is the primary reason for the region's high share.

The Asia Pacific region is estimated to be the fastest-growing regional market till 2028. High-growth economies such as China, Japan, India, among others, are contributing to the growth of the regional market. Increasing income levels is facilitating heightened e-commerce activity across the region, which in turn is increasing the burden on the warehouses. To manage large inventories, warehousing/logistics companies are adopting advanced systems to manage and execute supply chain operations smoothly. Additionally, as WES offers various cost benefits to the manufacturers, it is increasingly gaining manufacturers' attention across various industries.

Key Companies & Market Share Insights

The market players are trying to gain higher market shares by adopting strategies such as collaborations and partnerships, investments, and mergers and acquisitions. Moreover, the companies are also launching new products & services and are also focusing on maintaining competitive prices. For instance, in March 2020, Softeon announced the launch of an advanced solution that combines WMS and WES solutions. The new solution can be deployed as a stand-alone offering or a combined offering having both WES and WMS. Some of the prominent players in the global warehouse execution system market are: 

• Honeywell International Inc.

• Fortna Inc.

• SSI SCHAEFER

• Manhattan Associates

• Bastian Solutions, LLC

• VARGO

• Matthews Automation Solutions

• Invata Intralogistics

• Softeon

• WESTFALIA TECHNOLOGIES, INC.

Warehouse Execution System Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global warehouse execution system market report based on component, deployment, end-user, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2028)

  • Software

  • Service

    • Consulting

    • Installation & Integration

    • Training and Support & Maintenance

• Deployment Outlook (Revenue, USD Million, 2017 - 2028)

  • On-premises

  • Cloud

• End-user Outlook (Revenue, USD Million, 2017 - 2028)

  • Consumer Electronics

  • Healthcare

  • Food & Beverages

  • Automotive

  • Third-Party Logistics (3PL)

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa