Warehouse management systems (WMS) and warehouse automation systems have long been complementary technologies with adjacent and sometimes overlapping functionality sets. The relative importance of the systems to an operation depends on the activities and throughput profile of the given warehouse. Public discussions about the convergence of WMS and warehouse control systems (WCS) into what has been termed a warehouse execution system (WES) is more recent, but also not new. However, insights from my concurrent research on both the WMS and warehouse automation & control markets suggests that competition between vendors of these solutions has recently intensified.
E-Commerce is the Impetus
E-commerce growth and the effect it is having on fulfillment requirements is the primary factor stimulating the growth in both WMS and warehouse automation sales. As e-commerce volumes increase, more and more warehouses need to adapt their fulfillment operations to cost-effectively handle the high-volume of small orders that are expected by consumers to be delivered very often the next day. Warehouse automation customers are now placing a premium on system flexibility and adaptability to conform to the changing environment. Much of this adaptability is being delivered by control systems and other software capabilities. And many warehouse automation vendors acknowledge that the software intelligence in their systems has become a core value driver of their offerings, while the mechatronics is becoming increasingly more commoditized. Examples of warehouse automation companies I consider to be placing increased focus on their software systems include Dematic (Dematic IQ), Knapp (KiSoft), SSI Schaefer (WAMAS), and Swisslog (SynQ).
At the same time, e-commerce fulfillment requirements are placing different pressures on WMS vendors. Many customers are using put-walls to more efficiently coordinate order line items, and WMS vendors are incorporating functionality to support this process step. Similarly, the time pressures of expedited orders are exposing the rigidity of wave processing. WMS vendors are making their systems more adaptable to e-commerce fulfillment requirements by enabling waveless order processing. For example, Manhattan Associates developed its order streaming capability that allows users to set the cadence of order release to the floor according to fulfillment priorities and available capacities. Similarly, HighJump has been developing machine learning capabilities to enhance its ability to intelligently process orders in a waveless environment. There is also a common view that the use of warehouse automation is going to increase in the future. This is making the ability to coordinate and communicate with automation increasingly important. As a result, WMS vendors are making strides into the control system layer to extend their value proposition. For example, the material flow control system within SAP EWM is now extensively used in European warehouses. More recently, HighJump announced plans to extend its WMS capabilities with Inconso’s WCS (both Körber Logistics Systems companies).
I do see the capabilities of WMS and warehouse automation & control system vendors converging somewhat. But the best-of-breed WMS systems continue to offer substantially deeper functionality for manual warehouses than that of most warehouse automation providers’ WMS systems. In contrast, a more robust WMS is simply not a priority for large warehouse automation vendors, whose prospects are typically interested in highly automated facilities. WCS capabilities remain paramount in these facilities. There will undoubtedly be additional innovative and interesting developments in the warehouse execution space. I am especially interested in watching the development of autonomous mobile robots in the warehouse, and how the robot fleet management systems are going to fit into the existing warehouse technology footprint. Stay tuned.