The five biggest WMS developments of 2016

Robots, consolidation, apps, and new interaction points for people and products are changing the face of warehouse management systems and the warehouses that run them. It’s been an interesting 2016 and looking back so far; there seem to be some interesting trends that are impacting the WMS itself.

Here’s a glimpse at just of the few key shifts that had a major impact on the market this year plus some thoughts on what they’ll lead to in 2017 and beyond in the areas of:

  1. Robots and automation
  2. The Oracle acquisition of LogFire
  3. Retail supply chains
  4. Voice recognition and automation
  5. Changing customer expectations

1. Robots and automation continue to grow

Automated distribution centers are proving to be smarter and more efficient, and the platforms and robots they use are in greater demand as more fulfillment (and e-fulfillment) centers continue to crop up in North America and Europe.

High-speed applications, larger orders, and the holiday demand that can boost retail orders by up to 20% demand an increase in capabilities. Robots, for some companies, are proving to be a cost-effective solution for meeting those needs because they can increase accuracy and efficiency of human activities while reducing overall power consumption compared to older conveyor systems.

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Investments in robotic systems are pairing with the increased demand for more flexible RFID scanning, auto-guided vehicle storage systems, and retrieval packages based on new interactions. The International Federation of Robots notes industrial robots have increased by 70% in sales volume for top distribution markets including China, Japan, the U.S., South Korea, and Germany.

2. Oracle buys LogFire

In September, Oracle purchased LogFire to boost its Oracle Supply Chain Management Cloud suite. It’s a natural evolution from the 2015 announcement where LogFire integrated its WMS with Oracle Transportation Management to create what the companies claimed at the time was the first 100% cloud-based “supply chain execution convergence solution.”

The move is both a signal of the consolidation expected to continue in the market and the importance of cloud in every major move in 2016.

"...a signal of the consolidation expected to continue in the market and the importance of cloud in every major move in 2016"

More data headed to the cloud this year as SaaS and cloud-friendly deployments were in significant demand. AWS Cloud remained a top player in that consolidation to the cloud. Its most recent “win” in the space was the closure of four physical data centers by Matson Logistics in favor of an AWS Cloud deployment for all of its operations and its clients.

3. Retail supply chain turns to stores for help

E-retailers exploded this year with worldwide growth projected to reach nearly 24% to $1.915 trillion by the end of 2016. China is making up the bulk of sales at roughly $899 billion, followed by large growth in Asia-Pacific and a 15.6% climb in North America to $423.34 billion.

This year, retailers with physical and online distribution channels struggled to handle that growth. Brick-and-mortar stores slowly become miniature distribution centers as the “ship-from-store” model began to grow in earnest.

By leveraging existing store inventory, companies have realized that they can boost networks and distribution centers without much additional cost. The main requirement is that the WMS be able to take in this inventory and allocate it appropriately.

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Some retailers are adding hundreds of small distribution points, and they’re able to deliver goods to customers faster when the WMS handles this appropriately.

This new ship-from-store model is expected to grow in 2017 in a variety of new ways, potentially even turning retailers into warehouses for others. Amazon, for example, is leveraging its merchant partners and using their warehousing to meet its demand and the “Seller Fulfilled Prime” program has allowed it to expand its two-day shipping guarantee by an additional six million items.

4. Voice grows in the warehouse

Automation platforms are increasingly in demand and that means all of the related technologies had a big year.

Voice is growing the in the WMS space because a wider range of WMS platforms and mobile apps can use it as a valid input. Wavelink was one of the most recent additions of voice commands and its expansion of Speakeasy support for Android OS devices also points to the trend of more technology supporting cross-device platforms.

Voice technology is also seen as a key safety feature by freeing up hands and moving eyes away from screens as employees move about. As warehouses and distribution centers grow, improving productivity and decreasing error rates make an even bigger impact on revenue.

5. Customer expectation is highest when overall demand is highest

Throughout 2016 we’ve heard of higher customer demands for service, increasing complexity for returns through multiple channels, and a greater need for visibility in the supply chain to meet those demands.

As the year ends and research for the holiday shopping season begins to roll in, we’re left with interesting bits that, while not necessarily surprising, are extremely important to how warehouses run their operations.

"56% of shoppers who perform three-quarters or more of their holiday shopping online during from Black Friday to Cyber Monday expect their items to be delivered in two days or less"

A survey from Voxware Inc. found that 56% of shoppers who perform three-quarters or more of their holiday shopping online during from Black Friday to Cyber Monday expect their items to be delivered in two days or less. That means your high-volume consumer is placing significant demands on your operations, with the greatest opportunity to leave negative reviews or feel unsatisfied based on shipping.

The most important part is that one-in-four shoppers are expected to do at least 75% of their holiday shopping on those four total days (including the weekend in-between).

More than 85% of shoppers say that they expect holiday shipping to have the same timeframe as shipping throughout the rest of the year. That’s a big demand and could be one factor driving the other trends in adoption and visibility we saw during 2016.

What to consider for 2017

In March of 2016, shoe retailer Finish Line had significant issues due to a WMS implementation that went awry. The retailer was trying to update from a system in place since 2004, and it is believed that the legacy system played a significant role in the problem.

The most likely case is that the system was installed in 2003 or 2004 and slowly customized thereafter. As years progressed and the market brought new devices, from automation tools and robots to the smartphone in the workplace, the older system would’ve continually needed custom work to keep up.

That issue may herald problems to come as we continue to see a greater push for more device and feature support with a heavier reliance on the cloud.

Legacy infrastructure is always an issue during an update, but many systems and their hardware are going to be approaching their end-of-life soon, and we may likely see a series of new advances in 2017 come with a series of major spending and problems due to ousting those legacy burdens.

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Geoff Whiting

About the author…

Geoff is an experienced journalist, writer, and business development consultant with a focus on enterprise technology, e-commerce, and supply chain development. Outside of the office he can be found toying with the latest in IoT, searching for classic radio broadcast recordings, and playing the perpetual tourist in his home of Washington D.C.

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Geoff Whiting