Warehouse Management System Market Trends, Industry | 2031

Report Description

Warehouse Management System Market Outlook 2031

The global warehouse management system market size was valued at nearly USD 2.8 Billion in 2022 and is anticipated to reach USD 11 Billion by 2031, expanding at a CAGR of 15% during the forecast period, 2023 – 2031. The growing e-commerce industry, digitization, application of cloud technologies, and automation are attributed to fuel the global market.

Warehouse management systems (WMS), are software for effectively coordinating and controlling warehouse operations, right from the entry of the goods into a warehouse up to the leaving of the products for distribution. Product mapping, labeling, warehouse order picking, and sorting are the primary functions handled through warehouse management systems.

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A standalone system, cloud-based, supply chain module, and enterprise resource planning (ERP) module are the most common types of WMS, each designed for specific requirements. Warehouse management systems aid in the reduction of the operational costs of distributors. 

Reduction in redundancies through manual data entries for improving efficiency and accuracy are major advantages of using a warehouse management system. Tracking product quantities and adhering to maintenance schedules are the prime applications of a warehouse management system.

The Impact of Artificial Intelligence on the Warehouse Management System Market

With the emergence of AI, every industry is evolving, similarly, it has revolutionized the warehouse operations industry. AI is making its way in logistics and supply chain management, bringing a wide range of benefits that are expected to help companies optimize their operations, increase efficiency, reduce costs, and improve customer satisfaction. Robotic process automation (RPA) and industrial robots, warehouses are becoming automated with the rise of automation technologies. It helps to reduce the need for manual workers and reduce labor costs.

• According to a survey by Deloitte, 38% of logistics companies are currently using autonomous/robotic solutions in their processes, which help in freeing up human workers' tasks.

The market report finds that the COVID-19 pandemic propelled the warehouse management system market with an increase in the trends of online shopping. The shutting down of automobile, electronics, and consumer goods chains around the globe has increased online selling and buying activities through Amazon, eBay, Alibaba, and other major online retailers. Lockdown restrictions halted the free movement of consumers propelling the warehouse management systems use worldwide.

A WMS (warehouse management system) is classified as a basic WMS, advanced, and controlled. A basic WMS is useful in tracking the location and inventory management. Performance data generated corresponds to throughput that gauges the movement of stock moves throughout a warehouse.

• In 2022, OPEX led the global warehouse management software market, with a 29% market dominance, followed by SAP Warehouse Management with a 17.56% share, followed by Oracle and other service providers.

Warehouse Management System Market Dynamics

Major Drivers

Growing trends of online shopping in the online grocery industry, clothes, and accessories shopping, and online buying of electronics have resulted in the extensive use of warehouse management system (WMS) software solutions. The growing use of WMS aids in the effective tracking, packaging, and routing of consignments, which is expected to propel the market.

Existing Restraints

High upfront costs for setting up a WMS on-premise can be a financial burden for small and medium enterprises (SMEs). Regular maintenance of systems and hardware upgrades increase the expenses for SMEs, which hampers the market.

Emerging Opportunities

The introduction of WMS services in streamlining the supply chain functions and management is a major market expansion opportunity. Digitization of the supply chain assists in the development of an ecosystem that provides transparency to all stakeholders involved. These include raw material suppliers, observers, logistics, and vendors. WMS reduces the wastage of time and the effective management of resources, which is a major factor in creating opportunities in the market.

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Scope of Warehouse Management System Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Warehouse Management System Market Segment Insights

Component Segment Analysis

Based on component, the market is bifurcated into services and software segments. The services segment is expected to expand at a significant pace during the projection period due to the extensive offerings that include consulting services, maintenance, operation, and integration services. These service offerings can be provided by private vendors, which enables the clients to focus on their primary tasks and business operations. This, in turn, is expected to propel the segment.

The software segment is anticipated to hold a key share of the market, owing to the growing applications of the warehouse management system by small and medium enterprises (SMEs). This is expected to boost the segment during the forecast period. WMS software can be embedded into supply chains or can act as a standalone system to meet specific customer requirements thus boosting the segment.

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Deployment Segment Analysis

On the basis of deployment, the warehouse management system market is divided into on-premise and cloud-based. The cloud-based segment is anticipated to hold a key share of the market, due to the speedy business operations possible. The growing integration of cloud services with supply chain and enterprise resource planning for fast and effective management of production lines is expected to fuel the cloud-based segment.

The on-premise segment is expected to expand at an exponential pace in the coming years owing to the easy management offered. In-house safety of data and sensitive information is ensured through the on-premise deployment of a warehouse management system that is expected to propel the segment.

End-User Segment Analysis

In terms of end-user, the market is divided into e-commerce, automotive, food & beverage, logistics, electrical & electronics, machinery & metals, healthcare, chemicals, and others. The e-commerce segment is expected to dominate the market during the forecast period, owing to the preference for online shopping, ease in payment modes for consumers, and short delivery times. Increased usage of digital marketing technologies and the development of high-tech gadgets have modernized customers’ shopping ways and methods, which is expected to propel the segment.

The healthcare segment is expected to expand at a rapid pace in the coming years due to the growing demand for a wide range of services that include medical devices, temperature-controlled pharmaceutical products, and diagnostic reagents. The effective marketing and delivery of customer-demanded products on a large scale need effective WMS in place, which is expected to fuel the healthcare segment.

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Regional Analysis

On the basis of region, the global warehouse management system market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America is expected to dominate the market during the projection period owing to a well-established digital payments system that has propelled e-commerce in North America. Modern healthcare facilities are expanding in the region, which has increased the importance of effective management of medical and laboratory supplies, diagnostic equipment, and kits thus propelling the market in North America.

The market in Asia Pacific is projected to grow at a rapid pace in the coming years, owing to the expansion of manufacturing, transportation, logistics, and BFSI industry verticals. Vendors in Asia Pacific are focused on developing warehouse management systems for catering to the massive surge in supply chain operations primarily in consumer goods supply chain management and healthcare supply chain management. This, in turn, is expected to drive the market in Asia Pacific.

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