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Home » Warehouse Management System Market to Reach $1.8 Billion  

Warehouse Management System Market to Reach $1.8 Billion  

April 16, 2008
From ARC Advisory Group

The worldwide market for Warehouse Management Systems (WMS) is expected to grow at a compounded annual growth rate (CAGR) of 7.5% over the next five years. The market was $1,257 million in 2007 and is forecasted to be over $1,807 million in 2012, according to a new ARC Advisory Group study.

"The WMS market is a mature market that has been around for decades. And yet we have year over year growth in the double digits," according to Steve Banker, Service Director for Supply Chain Management, author of ARC Advisory Group's "Warehouse Management System Worldwide Outlook". "This growth has been driven by a technology refresh among customers with older systems, and the emergence of WMS in new verticals and parts of the world that that have not historically bought this solution."

Emerging verticals are combining WMS with traceability and Proof of Delivery to create a solution that spans from the point of storage to the point of use. In effect, they are creating a form of extended WMS.

Hospitals provide one example of a new vertical beginning to buy WMS for the first time. These solutions are being bought by hospitals and health service chains in both North America and Europe, particularly France. In France, these implementations are driven by traceability mandates surrounding hospital supplies. At one hospital, inventory is tracked from a central supplier warehouse to all the hospitals in Strasbourg, France. They use RFID tags to auto scan the goods onto trucks and then auto scan them into the hospital pharmacy. At a different hospital in France, the flow of medical supplies and equipment are tracked from warehouses in the hospital to surgery rooms and other areas within the hospital.

In one implementation in Canada done by Tecsys, inventory is put into totes in the warehouse and then delivered to the pharmacy, store rooms, and hospital carts on a just-in-time (JIT) basis from one time a day up to four times a day. There is a dedicated replenishment person tasked with moving from one storage area to another and with checking inventory levels. One reason WMS has sold well is that WMS companies have argued that this solution frees "nurses to be nurses". This new process frees senior nurses from having to take care of inventory checks.

If the replenishment associate sees that a particular SKU is well stocked, they skip that slot, if another slot looks low, they manually count the items and an inventory check is done with the central system. JIT shipments are based on predefined min/max rules. For particular high value SKUs there can be predefined rules requiring automatic counts every day. There are also over ride rules so that in a particular location if it is known that for some reason a particular SKU will be in high usage on a particular day, they can require more goods for that slot for that day.

Because certain types of patients, such as heart patients, should not be exposed to RF, it can't be used throughout the entire hospital. But many hospitals have a WIFI infrastructure. Thus, in some parts of the hospital, locations are scanned but the scan does not get sent to the WMS until that person walks into a part of the hospital where there is coverage and then auto-syncing occurs. This site also makes use of electronic signatures at nurse's stations for proof of delivery for high value inventory such as particular drugs.
http://www.arcweb.com/res/wms

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