Six Important Warehouse Management Trends to Watch in 2019

To hear the typical logistics manager tell it, there are few areas of their warehouses and distribution centers (DCs) that aren’t in need of an upgrade right now. Challenged by the demands of e-commerce and omni-channel fulfillment, smaller orders, ever-shrinking delivery timeframes, and a persistent labor shortage, operations are in perpetual need of tools that can help them tackle these and other ongoing productivity issues.

Technology is providing at least some relief. With automation, robotics, artificial intelligence (AI) and other advanced technologies making their way into the world’s distribution facilities, the warehouse management system (WMS) is one stalwart that’s long served as a cornerstone for most distribution operations.

Acting as traffic cops of sorts, these software systems provide inventory visibility, manage supply chain operations, and integrate with transportation management systems (TMS) and other solutions to help streamline the movement of goods from manufacturer to warehouse to retailer—or eventually the end customer. The WMS does this by overseeing receiving, putaway, order picking, shipping, and inventory counts, among other activities. And because it collects valuable information along the way, WMS also provides actionable data analytics that companies can use for good decision-making.

But even for all of the benefits that WMS is known to provide, the software’s adoption rate is hanging at about 70%, according to a 2018 WERC survey. “While 30% more facilities have implemented a WMS than in 2008,” the organization points out, “almost 35% are still not using one to manage the warehouse, relying instead on manual means such as Excel and disparate modules to run individual functions.”

Joe Vernon, senior manager of supply chain technology for consulting firm Capgemini, says that he was stunned that one-third of shippers aren’t using WMS in their operations. “I couldn’t believe that,” says Vernon. “You would think that, by now, WMS would be omnipresent.” According to the WERC report, adoption rates tend to be highest among high-volume shippers that are being pressured to “quick ship” in the Amazon-led online retail world.

“These companies have to respond, and they have to be able to do things quickly and accurately,” says Vernon, “because that’s what the end consumer expects.”

6 key trends to watch

As we progress further into 2019, our group of leading supply chain software analysts see six key trends dominating the warehouse management landscape. Here’s what logistics operations can expect this year:

1.) Systems that use machine learning to sense and adapt. 

Even though WMS has been around for decades, that hasn’t stopped its makers from coming up with new and useful software capabilities to meet their customers’ current needs. Right now, for example, Vernon says that vendors like Manhattan are using advanced technologies to enhance their core offerings.

“They’re adding more algorithms into the capabilities of their WMS,” says Vernon. “For example, Manhattan’s order streaming now incorporates machine learning that helps shippers sense and adapt to changing conditions within the warehouse.” In other words, if a picking process that’s underway suddenly shifts over to a batch of difficult-to-pick items, then the system can shift allocation accordingly, and without human intervention.

2.) Systems that can interject last-minute orders. 

For this year’s ARC Advisory Group WMS survey (which comes out later this year), Clint Reiser, research analyst, is digging into the degree at which shippers are using intelligent waving/batch picking. Common across most of the advanced WMS offerings, this capability is less used by the 30% of companies that have “less sophisticated, complex warehouses that are still using onesie-twosie, paper-printout, ad-hoc processes,” says Reiser.

As the use of wave-less fulfillment gains momentum in the fast-paced e-commerce space, Reiser says he’s seeing more companies turn to warehouse control systems (WCS) and automation to help support those activities. “These systems allow companies to interject rush orders in the midst of pushing out a wave,” says Reiser, who points to High Jump, JDA, and Manhattan as three of the WMS vendors that are adding such capabilities to their solution sets.

3.) WMS vendors working with their OEMs to “democratize” automation. 

Cloud computing may have completely changed the way companies purchase most of their software, from on-premise license purchases to subscription fees, but Vernon says that he’s now seeing even more creative financing opportunities surface for companies that want to infuse new technology into their warehouses.

“Shippers that are trying to automate, or that are investing in robotics, self-guided vehicles, and other technology,” says Vernon, “are working with their vendors to come up with creative financing options.” For example, he says one school of thought that more companies are adopting is that assets can be “rented” versus purchased or leased. In other instances, the WMS vendors that sell the systems that run the automated equipment are now working more closely with their OEMs to help make it more affordable for a wider swath of customers.

4.) A big focus on WMS user interface. 

Logistics managers don’t have the time to sift through reams of data to find what they’re looking for. Nor do they want to waste their time determining which information nuggets are “actionable,” and which of them can be ignored.

To help, Dwight Klappich, research vice president at Gartner, says WMS vendors are focusing on their user interfaces and coming up with ways to present data in a more logical format to users. “It’s about packaging and representing information for, say, the supervisory workforce,” says Klappich, who points to Manhattan’s DM Mobile product as one example of a user interface that helps supervisors interact and affect change among employees and tasks while they’re out on the warehouse floor.

“There are now some other WMS vendors who are asking themselves: ‘How do we enable the warehouse, picking, or packing area managers and help them do a better job?’” Klappich says. “The focus is on making systems more engaging and easier to use, and particularly in a same-day-shipping environment, where a field service technician or retail clerk can use the system with literally zero training.”

5.) Better, faster return-to-inventory management. 

Today’s consumer has no tolerance for late, missing, and incorrect orders. They also don't think twice about returning merchandise purchased online and asking for a replacement (or refund), even if the item is still perfectly saleable. These “new realities” have made a sizable impact on the distribution environment, and are pushing technology vendors to add better precision management capabilities into their systems.

“Companies have to be able to manage precision, while more economically managing individual items,” says IDC Manufacturing Insights’ program vice president Simon Ellis. On the returns front, for example, more companies are rushing to put the right business processes in place to deal with these different kinds of returns (i.e., those that can be returned to inventory and sold).

That’s where WMS is stepping in to help. “At the end of the day,” adds Ellis, “WMS is an inventory system. So, while these systems certainly help companies pick, pack, and stage, they are also inventory systems. As items get returned, shippers need to be able to return those goods to inventory. The WMS needs to be able to handle that task as well.”

6.) Expanded functionalities that make implementations easier. 

On the implementation side of WMS, Klappich says that more vendors are waking up to the fact that they possess the internal technical expertise to start building system functionality that makes implementations better, faster, and easier.

In a perfect world, for example, instead of users manually keying data into their WMS platforms, they will use vendor-created wizards and coaching tools to copy templates and then replicate that process across additional warehouses. “WMS already offers a lot of features and functions, so now vendors are taking deeper dives into what else they can be doing,” says Klappich. “There’s still a lot of opportunity there.”

Up next: More robotics and automation

As the complexity of filling smaller orders faster and with scarcer human labor resources continuing to mount, the analysts and industry experts we interviewed for this article expect more shippers to embrace the value that WMS brings to the table.

As that slow plod toward higher WMS adoption continues, vendors will be weaving new capabilities and functionalities into their systems. With many existing warehouse positions being well suited for robotics and automation, Ellis expects even more WMS vendors to find ways to leverage this new “automation wave” and come up with capabilities that blend well with it.

“Automation was hot for a while, but the early wave of users discovered that it didn’t really pay for itself,” says Ellis. “With its many repetitive and rote tasks, the warehouse is one place where we’re seeing a pretty clear ramp-up of robotics and automation.”