Even through the recent recession, demand for warehouse
management systems remained surprisingly strong.
Demand was projected to increase even further until at least
the beginning of 2012.
The majority of new WMS engagements in North
America and Western Europe are replacements of aging or
technologically obsolete systems. Although an added cost,
these replacements are needed to improve companies’ overall efficiency as well as the agility and adaptability of their
systems and processes. Additionally, many WMS users need
to replace their old systems because the older systems’ technical architecture cannot compete in today’s fast-paced marketplace. Consequently, while they could add a stand-alone
capability like labor management to their legacy WMS, the
desire for greater agility justifies a complete overhaul.
Our clients also state that they are looking to new systems
to drive additional productivity improvements. Along these
lines, there is increased interest in productivity-improving
capabilities like labor management, task interleaving, slotting, yard management, dock scheduling, and performance
management.
This need for system replacements and enhanced productivity is driving significant WMS sales in mature markets such as North America and Europe. Emerging markets
in other parts of the world will see sales increase but at a
somewhat slower pace. This is largely because the lower cost
of labor in those countries creates less motivation to use
technology to cut costs. Additionally, the types of applications that these companies are interested in are much different than those that are currently popular in more mature
markets. In emerging markets, process control and things
EXHIBIT 1
2011 plans for supply chain systems
0 10% 20% 30% 40%
Labor/Workforce Management
Reverse Logistics
Network Design
Supply Chain Event Management
Trade Compliance
Supply Chain Analytics
Sales and Operations Planning
Demand Planning
Distribution Planning
Transportation Management System
Warehouse Management System
; No change to current technology
; Replace with another technology provider
50% 60% 70% 80%
; Upgrade or re-implement current system
; Outsource ; Don’t know
90%
100%
