By 2025, the global warehouse management system (WMS) market will be worth $5 billion, growing at a CAGR of 13.9%, according to “Intelligent Supply Chain” research conducted by ABI Research, New York. Over the same forecast period, 57,000 more warehouses will be in operation than in 2018.

“The warehouse is becoming the engine room of the supply chain, and is therefore, a focal point for investment from retailers, manufacturers and logistics service providers,” says Nick Finill, principal analyst. “As the warehouse technology ecosystem becomes increasingly complex, supply chain operators require more sophisticated management systems that can orchestrate the high volume and variety of intelligent, connected devices and systems within their facilities, as well as the flow of inventory.”

As the e-commerce boom grows and extends beyond the established economies of China, Japan and Korea, the Asia-Pacific region will experience the highest growth of warehouse facilities and WMS revenue, becoming the largest market for the software by 2023. The rapid adoption of WMS is also expected in the emerging economies of the Middle East, Africa and Latin America. Europe and North America will experience strong growth, as supply chain operators increase spending on upgraded software systems.

WMS spending will also vary according to industry verticals. The retail, food and beverage and manufacturing sectors will be responsible for the highest growth rate, as they catch up with more mature verticals, such as logistics service providers.

“The increasing velocity of goods through the supply chain is driving demand for real-time decision making and optimization,” says Finill. “As the margin for error in the warehouse decreases, artificial intelligence and machine learning-enabled WMS solutions are becoming imperative for warehouses that rely on speed, efficiency and intelligence to remain competitive.”