Warehouse Management System (WMS) Market Size, Share & Trends Report

Warehouse Management System (WMS) Market Size, Share & Trends Analysis Report By Component (Services, Software), By Deployment (Cloud, On-Premise), By Function, By Application, And Segment Forecasts, 2018 - 2025

  • Published Date: Apr, 2018
  • Base Year for Estimate: 2017
  • Report ID: GVR-2-68038-151-1
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2016
  • Number of Pages: 101

Industry Outlook

The global warehouse management system (WMS) market size was valued at USD 1.69 billion in 2017. It is expected to register a CAGR of over 16.0% over the forecast period. Growing economies across the globe have propelled various sectors such as manufacturing, retail, and healthcare to achieve highly efficient operations in order to increase their output and meet consumer demand.

U.S. warehouse management system market

In an attempt to address growing demands, logistic companies are continuously progressing to overcome challenges created by fluctuating product markets and shipping schedules. Warehouse management system assists in reducing lead time, increasing delivery speed of products, and minimizing distribution costs.

Demand for WMS is anticipated to witness a sharp rise due to factors such as changing supply chain models of product manufacturers and rapidly growing consumer demand, especially in the transport & logistics and retail sectors. The need for manufacturers to automate warehouse management processes and curtail costs globally is one of the key trends triggering market growth. Spiraling demand for the system may be attributed to its ability to ship products in the fastest time through the shortest shipping routes.

Customers prefer cloud-based WMS services to on-premise solutions as the former ensures cost reduction on the service. Software-as-a-Service (SaaS) was introduced to meet burgeoning demand for cloud-based services as it offers a low upfront cost and enables faster implementation in warehouses.

Manufacturers are now focusing on automation of activities and suppliers are developing solutions to support the market trends. The WMS software is used by various end users such as B2B distribution companies, third-party logistics, and other manufacturing companies. The software is designed to cater to complex, sophisticated warehouse operations as well as tackle less complex resource-constrained operations.

Component Insights

Based on components, the market has been segmented into software and services. The software segment can broadly be classified into cloud and on-premise solutions whereas the services segment includes consulting, system integration, operation, and maintenance services.

Warehouse management can be provided as a service by third-party vendors, which is outsourced by WMS providers. The software is hosted via a cloud-based computing system. Vendors sell their products by either offering them as a service, which helps the clients to focus on their core business operations or selling the software to the client without the service.

The software component is anticipated to witness a faster growth over the forecast period due to its spurring demand in the retail and manufacturing sectors, high disposable incomes of consumers, and increased adoption of the latest technologies such as cloud. The segment is estimated to cross USD 1 billion mark by 2025. Warehouse management system can be a standalone system or part of a supply chain execution suite and is widely used as a tactical tool by businesses to meet the unique customer requirements of their supply chain and distribution channel.

Deployment Insights

The market has been segmented based on deployment into on-premise and cloud. The cloud-based technology has revolutionized the way businesses function. The cloud-based segment is projected to post a CAGR of just over 17.0% during the forecast period. When deployed on cloud, WMS offers a reduction in upfront cost incurred by companies and drastically increases the efficiency of warehouses.

On-premise deployment, on the other hand, has been prominent since the advent of WMS and is characterized by huge servers and high maintenance cost, ultimately increasing the company’s expenditures. These upfront costs along with ownership of maintaining the on-premise server are incredibly high as compared to the cloud-based technology.

Global warehouse management system market

Over the years, the cloud deployment has become as secure as the on-premise system on account of data sovereignty and successful curbing of data thefts. Companies are now able to customize and provide a WMS service based on the client’s requirement. For instance, the cloud-based WMS enables clients to scale or downsize the level of operations based on their seasonal demand. The major difference between on-premise and cloud-based solutions is the longer time taken in the implementation process of on-premise WMS as compared to the latter.

Function Insights

Labor management system, analytics & optimization, billing & yard management, systems integration & maintenance, and consulting services are the key functions outlined in the study. The analytics & optimization segment is poised to expand at a CAGR of about 19.0% over the forecast period, whereas the revenue contributed by the systems integration & maintenance segment is likely to be the highest throughout the same period.

Order picking functionality is one of the most crucial features in a warehouse management suite that is designed to automate the paper-based picking process. The material handling process and picking are affected by many factors including warehouse layout, customer requirements, order type, and product velocity. A warehouse management system that is capable of accommodating fulfillment requirements irrespective of individual warehouse characteristics is more beneficial than a WMS with a limited scope of application.

Order allocation is another essential feature of any robust warehouse management system. As soon as a sales order is received, it is entered into the enterprise resource planning (ERP) system and gets immediately updated in the WMS software. Order management is expedited as there is no time lapse between the product being received in the warehouse and being available for order allocation.

Application Insights

Based on application, the market has been primarily segmented into transportation & logistics, retail, healthcare, manufacturing, and food & beverage. The transportation & logistics segment is expected to exhibit the highest growth rate over the forecast period, which can be attributed to increased popularity of e-commerce portals coupled with growing disposable income levels of consumers, especially in emerging nations.

The healthcare segment is anticipated to emerge as a prominent adopter of WMS as providers are building facilities taking into consideration the pre-requisites of the healthcare sector. For instance, DHL’s Cherwell European healthcare center is the largest user-shared logistics center in the U.K. that offers healthcare warehouse management system. The facility uses OBS Logistics’ system, and its services include inventory management for a wide range of temperature controlled pharmaceutical products, diagnostic reagents, and medical devices.

The manufacturing sector represented the leading revenue share in the warehouse management system market in 2017. The manufacturing companies initially integrated their ERP and WMS solutions. They are integrating their logistics & transport management systems too in order to gain full control of the supply chain. In addition, the use of cloud-based technology is enhancing the efficiency and performance of supply chain management in the manufacturing sector.

Regional Insights

The Europe region commanded the dominant revenue share in the market in 2017. It is estimated to be valued at close to USD 1.7 billion by 2025. Asia Pacific is projected to be the most promising region during the forecast period owing to high-growth economies such as China, India, and the Philippines. With increasing purchasing power of consumers, developing countries are witnessing a growth in the demand for end-use products. This is positively influencing the demand for WMS for uninterrupted supply of products to users.

Since Asia Pacific is a price-sensitive region, SaaS is highly preferred by companies using the WMS technology in this region. Advantages such as lower entry cost and risk, cost-effective growth, access to the best technology, and dynamic and advanced software features offered by the model are seizing the attention of manufacturers.

Warehouse Management System Market Share Insights

Major players include HighJump, Manhattan Associates, Oracle, SAP, Softeon, Synergy Ltd., Tecsys, Reply, Infor, Made4net (KEY INNOVATOR), Epicor Software Corporation, and PSI Logistics GmbH. Due to considerable growth opportunities in both developed and emerging economies, companies are focusing on new product developments, strategic mergers and acquisitions (M&A), and generating venture capital investments to consolidate their market presence.

For instance, in February 2017, RedTail Solution, Inc., was acquired by HighJump. RedTail Solution, Inc. is a managed cloud service solution provider of Electronic Data Interchange (EDI) and provides data synchronization network to mid-size manufacturers and suppliers. The acquisition has fueled HighJump’s growth in the North American region, further strengthening and complementing the company’s policy of offering fully managed commerce network service to retailers and suppliers

In April 2017, Manhattan Associates, Inc. launched its Manhattan Distribution Management suite, which includes a range of new offerings such as the distribution management (DM) mobile, mobile picking application, improved sorting functionality, and pack station user interface. The DM mobile solution, for example, empowers the controlling of operational issues by enabling managers to re-slot products to different locations from any location on the floor. Furthermore, the company launched a wireless order fulfillment feature called ‘waveless’, which assists retailers address the irregular shipping flows of e-commerce orders. The order fulfillment feature will even out any shortages in demand within the shortest turnaround time.

Report Scope

Attribute

Details

Base year for estimation

2017

Actual estimates/Historical data

2014 - 2016

Forecast period

2018 - 2025

Market representation

Revenue in USD Million & CAGR from 2018 to 2025

Regional scope

North America, Europe, Asia Pacific, South America, MEA

Country Scope

U.S., Canada, Mexico, U.K., Germany, India, China, Japan, Brazil

Report coverage

Revenue forecast, company share, competitive landscape, growth factors, and trends

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Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the industry trends in each of the sub-markets from 2014 to 2025. For the purpose of this report, Grand View Research has segmented the global WMS market report by component, deployment, function, application, and region.

  • Component Outlook (Revenue, USD Million, 2014 - 2025)

    • Software

    • Services

  • Deployment Outlook (Revenue, USD Million, 2014 - 2025)

    • On-Premise

    • Cloud

  • Function Outlook (Revenue, USD Million, 2014 - 2025)

    • Labor Management System

    • Analytics & Optimization

    • Billing & Yard Management

    • Systems Integration & Maintenance

    • Consulting Services

  • Application Outlook (Revenue, USD Million, 2014 - 2025)

    • Transportation & Logistics

    • Healthcare

    • Retail

    • Manufacturing

    • Food & Beverage

    • Others

  • Regional Outlook (Revenue, USD Million, 2014 - 2025)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • U.K.

      • Germany

    • Asia Pacific

      • India

      • China

      • Japan

    • South America

      • Brazil

    • Middle East & Africa (MEA)

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