Even as the warehouse management system (WMS) market matures, new opportunities for the software are opening up, according to Steve Banker, service director, supply chain management, ARC Advisory Group.

"ARC is seeing evidence that falling prices of WMS systems with radio frequency (RF) solutions are leading to the implementation of WMS across a broader spectrum of warehouse than has historically been the case," says Banker.

Finished goods DCs still represent 70% of the implementations installed and maintained by the leading best-of-breed WMS suppliers. However, the other 30% are going into non-traditional centers designed to support manufacturing plants, customer service programs, merge-in-transit centers, or mixing center warehouses.

What's more, Banker expects that simpler solutions now being offered by WMS vendors will lead to the growth of WMS in smaller facilities known as Tier 3.

"Except for public warehousing companies, the majority of Tier 3 companies buying a WMS solution had revenues of over $100 million," says Banker. "Now, however, simpler solutions have emerged that can be implemented by value-added resellers with a lower skill set than has traditionally been needed. This is beginning to open up a fourth tier of WMS buyers."