INTRODUCTION »In the age of digitalisation and e-commerce the focus is more and more on information technology in logistics. Warehouse Management Systems (WMS) for management, control and optimisation of storage and distribution systems fundamentally determine the efficiency of lean logistics in companies. For more than 15 years, the »Team warehouse logistics« from Fraunhofer Institute for Material Flow and Logistics IML runs one of the world’s leading information platforms for the comparison of Warehouse Management Systems and is constantly evaluating trends and developments of the WMS Market, the standard WMS and the WMS projects. With the participation of nearly all relevant WMS vendors, warehouse-logistics.com offers distinctive information about the actual status on research and development efforts as well as general market trends of this specific industry sector. The present WMS MARKET REPORT COMPACT 2016 summarizes the most relevant findings.«
The Integrator often acts as a general contractor and supplementary offers material handling equipment („one-stop shop“). The WMS is highly integrated in the control of the material flow.
The core competence of a "Pure" WMS Vendor is software for the warehouse - possibly with a focus on dedicated industry sectors. This vendor type might offer supplementary warehouse-related software (e.g. a Forklift Control System, Pick-by-Voice solution).
A WMS of a Suite Vendor is mostly part of a broader software suite (e.g. ERP-/ SCM system) and generally features a higher integration in intercompany or multi-site modules and functions of the business suite.
The cumulative share of turnover is based on the turnover in the market segment of the different vendor types. Example: 23% of all Suite Vendors achieve about 80% of the turnover in this specific market segment.
87% of the WMS vendors expect a moderate or even rapid increase of the number of employees in the area of WMS up to 2020. This forecast underlines the previously mentioned positive trend of the last years.
Example: 16% off the companies have implemented their WMS between 51 and 100 times.
THE WMS MARKET BENEFICIAL TRENDS Top 5 beneficial trends for the upcoming 4 years 60% of the WMS vendors think, that Mobile platforms are a an important or very important trend in the upcoming 4 years.
Mobile platforms (e.g. Smartphones, Tablets)
Logistical assistance systems
Use of global standards for logistical objects
35% of the WMS vendors think, that Big Data will play an important or very important role in the upcoming 4 years.
From 2010 to 2016 you can monitor a shift of vendor types from "pure" WMS vendors to Suite Vendors and Integrators. After the increase of software expertise of Integrators in the last years, now there is a tendency for outsourcing the software division as well as for the offer of WMS without storage technology by Integrators. Rapidly growing market with a yearly increase of turnover of 6% and a significant positive forecast for the coming 4 years of more than 85% of the WMS vendors. The distribution of turnover is based on the Pareto principle. This implies that about 25% of the WMS vendors achieve 80% of the market turnover.
Logistics- and process-know-how is one of the most important success factors of the WMS vendors. Only those who understand the processes of their customers are able to depict them digitally. The second main success factor are references in logistics. By validated WMS Reference Projects on warehouse-logistics.com, WMS vendors have the possibility to have their references structurally validated by a neutral third party . The positive forecast of the development of workforce from the year 2013 has been confirmed. The number of employees in the WMS sector has increased by about 10% from 2013 to 2015. Without the present skill shortage, the increase would probably have been greater. The forecast from 2016 to 2020 promises further growth of the number of employees on the WMS Market.
THE STANDARD WMS DEFINITION AND DEMARCATION Warehouse Management System (WMS) In current language, the term Warehouse Management is used to describe the management, control and optimisation of storage and distribution systems. In addition to the fundamental functions of warehouse management, e.g. quantity and storage location management and control and disposition of conveying means, the scope of a warehouse management systems includes
methods and means for controlling system statuses and
a range of operational and optimization strategies.
Thus, the task of a WMS is to manage and optimise intra-company storage systems.
(Multiple) Client Capability Batches Serial Numbers Best Before Dates Handling Units Management Cross-Docking Multi-Warehouse Handling Capability Weight Control Double / Multiple-Depth Storage Returns Forklift Guidance System Production Supply and Removal Consignment Slotting and Reorganisation Empties and Load Carriers Resource Planning/Labour Management Scrapping Value Added Services (incl. Billing) Package Optimisation Material Flow Control Vendor Managed Inventory Dock and Yard Management Customs Hazardous Material 0%
Control Centre Decentralised control centre, which is available via a browser based solution and/or a native app (accessible via mobile devices) and can be configured for individual information needs
THE STANDARD WMS FUNCTIONAL DEVELOPMENT FOCUS Top 5 of the functional developments of the WMS vendors in the next 4 years
Functional developments of the WMS vendors in the next 4 years Control centre functionality Cross-industry functionality Industry-specific functionality Package optimisation Dock and yard management Slotting and warehouse reorganisation Resource planning / labour management Forklift guidance system Cross-docking Returns Multi-warehouse handling capability Weight control Production supply and removal (Multiple) client capability Value added services Handling units management Serial numbers Double / multiple-depth storage Kit building Best before dates Empties and load carriers Consignment Batches Hazardous material Vendor managed inventory Hazardous substances Scrapping Customs
THE STANDARD WMS TECHNOLOGICAL DEVELOPMENT FOCUS Technological developments of the WMS vendors in the next 4 years Mobile platforms Web-based user interface Ergonomics/ user interface (Audio-) visual picking principles Industry 4.0 Augmented reality Cloud computing/Software-as-a-Service 3D visualisation Smart robots Intelligent planning and control systems Self-service analytics Predictive analytics Integration into a SCE/ SCM solution Predictive maintenance Adaptation of the programming language Emulation (virtual commissioning) Integration of the worker Database independent WMS Wearables Autonomous vehicles Digital security Energy-efficient control systems Operating system independent WMS Gamification Gesture control Drones/ quadrocopter/ multicopter 3D printing
Top 5 of the technological developments of the WMS vendors in the next 4 years
A clear trend in information provision on mobile devices is visible. The number of warehouse management systems with control centre functionalities for mobile devices has more than doubled over the last four years.
The above-mentioned data refers exclusively to WMS, which offer a control centre for mobile devices (in 2016).
! A control center for mobile devices is offered for 67% of all systems. More than 50% of them are even available as a native app on smartphones, tablets or other mobile devices. If a WMS provider has decided to offer the system as a native app, it is usually programmed directly for several operating systems (Android, iOS, Windows Mobile).
You can identify development potentials in the core functions. Especially in the area of automated consolidation and deconsolidation as well as the quality inspection and delivery feedback in the WMS the average functional degree of fulfilment of all considered systems is conspicuous low.
Significant growth of the functional degrees of fulfilment of the additional functions compared to 2014 – especially in the area of optimisation of internal processes (forklift guidance system, resource planning). Increased development of control centre functionality, especially regarding the design of ergonomic user interfaces and parametrisable requests. Configurability and parameterisation instead of complex programming of functionalities are central. Significant more vendors cover their functionalities by standards in the WMS..
The majority of the WMS vendors offers different licensing models as well as combinations of those, depending on the individual situation. At the same time a fundamental difference depending on licensing based on the IT structure (server licences) vs. licensing based on the physical structure (site licences) can be stated. Three out of four of the WMS-vendors are basically willing to negotiate about a company licence.
THE WMS PROJECT AVERAGE PERIOD OF USE OF A WMS Average period of use of a WMS 2016 compared to 2014 (in years) ! In 30% of all cases Warehouse Management Systems are used for 15 years or more (upward trend). Thus, WMS vendors and WMS customers enter a long-term, strategic partnership.
! Depending on the size of the warehouse and the complexity of the processes, the average length of a WMS implementation takes up to 12 month for manual storages and up to 21 months for automated storages.
THE WMS PROJECT GOALS FOR THE IMPLEMENTATION OF A WMS (CHANCES) Importance of selected customer requirements for logistics Increased readiness to deliver Faster reaction times Lower error rates Shorter processing times Greater inventory visibility Increase of productivity Sustainability of the solution (technological / strategic) Tracing of batches / serial numbers Process and data security Missing functions of existing solution Greater process transparency (e.g. order status) Information networking with customers and suppliers Increased flexibility of the WMS vendor Verification of performed process steps (e.g. accounting of value added services)
In 2015 more than 1,700 projects have been realised by the active vendors in the region of Germany, Austria and Switzerland. 80% of it have been realised by Suite Vendors. The typical customer uses his WMS at least for 10 years (upward trend). He enters a long-term and strategic partnership with the WMS vendor.
The long-termed partnership can as well be proven by the number of follow-up projects. In more than 50% of all projects these are existing customers continuing the partnership. Installations with 500 or more concurrent users are not rare. Almost 25% of the WMS vendors serve companies of this size.
Meanwhile about 50% of the WMS vendors additionally offer their WMS as a cloud solution. But only half of those have already marketed their WMS as a cloud solution. Further on you can monitor, that cloud solutions still generate only a low single-digit percentage of the total turnover on the WMS Market.
The orientation of more and more WMS vendors is independent of branches, with an offer of general functionalities. Only 8% of all WMS vendors (and so 17% less than 2012) report a high specialisation on a few areas. This could result in a higher competitive pressure in "standard projects" and a lack of specialised niche providers.
THE FRAUNHOFER-GESELLSCHAFT THE LARGEST ORGANIZATION FOR APPLIED RESEARCH IN EUROPE
66 institutes and research units Nearly 24,000 staff
More than €2 billion annual research budget totaling. Of this sum, around 1.7 billion euros is generated through contract research Roughly two thirds of this sum is generated through contract research on behalf of industry and publicly funded research projects
Roughly one third is contributed by the German federal and Länder governments in the form of base funding
DATA BASIS GENERAL REMARKS FOR THE DATA BASIS The WMS Market Report Compact is based on the 16 year expertise of the Fraunhofer IML and it´s partners in the range of WMS. Since the year 2000 a global leading WMS Database for the continual market evaluation and trend analysis is conducted and content wise as well as technologically advanced. The »Team warehouse logistics« designed a questionnaire for the capture of relevant information
about WMS vendors,
about the functional scope of the systems
for the appraisal of current and prospective trends and developments on the WMS Market
The questionnaire contained approx. 3700 criteria in the year 2016. The data of itemised questionnaires were condensed and evaluated. The representation of data occurs accumulated and anonymised and is supported through spreadsheets and graphics.
The data of more than 80% of the participating vendors and systems were ascertained through personal expert interviews (in context of the annual validation). According to the »Advisory Committee warehouse logistics« the participants of the WMS database represent around 80-90% of the relevant vendors on the considered markets. Unless explicitly mentioned the data, graphics and spreadsheets refer to the year 2016.
OPERATING NUMBERS OF THE STUDY Kategorie Total period of the assessment
Nettsträter, Andreas; Geißen, Tim; Witthaut, Markus; Ebel, Diemar; Schoneboom, Jens: Logistics software systems and functions: An overview of ERP, WMS, TMS and SCM systems In: ten Hompel, Michael (Ed.); Rehof, Jakob (Ed.); Wolf, Oliver (Ed.): Cloud Computing for Logistics Cham: Springer International Publishing, 2015, p.1-11 Spee, D.; Beuth, D.: Lean Warehousing erfolgreich umsetzen: Herausforderungen und Erfahrungen in der Praxis München: Huss, 2015 ISBN 978-3-944281-68-1 Spee, D.; Bühner, S.: Retourenmanagement – eine logistische Herausforderung: Theorie und Praxis zur Abwicklung von Warenrückgaben. 1. Aufl. München: Huss, 2015 ISBN 978-3-944281-72-8 ten Hompel, M.: Software in der Logistik: Fit für Multichannel. 1. Aufl. München: Huss-Verlag, 2015 ISBN 978-3-944281-69-8 ten Hompel, M.; Rehof, J.; Wolf, O.: Cloud Computing for Logistics Cham: Springer International Publishing, 2015 ISBN 978-3-319-13403-1 ISBN 978-3-319-13404-8