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Rapid growth in the worldwide market for warehouse automation and control systems is being driven primarily by the global boom in e-commerce, and its profound effects on fulfillment requirements, according to a new ARC Advisory Group market study.
"The revenue growth of this market isn’t obvious because most of its vendors are privately held companies that do not report their revenues. But as the market is analyzed and the data is compiled, it becomes evident that the growth is rapid and widespread across vendors, regions, and technologies," according to Senior Analyst Clint Reiser, the principal author of ARC's "Warehouse Automation and Control Global Market Research Study".
E-Commerce Boom Propels Warehouse Automation
The retail fulfillment paradigm shift, driven by the e-commerce boom, is stimulating widespread growth in warehouse automation and control system sales. Retailers and their wholesalers and 3PL fulfillment partners are investing in systems that can efficiently handle a high volume of small, multi line-item orders. These systems include warehouse control systems (WCS), goods-to-person systems such as shuttles, and pick-to-light and put-to-light. In addition, evolving fulfillment demands are driving warehouse investments through the supply chain to parcel carriers and manufacturers. Parcel carriers are receiving increased volumes and throughput demands, and manufacturers are being pressured by retailer partners that are running leaner inventory operations. For example, palletizers and pallet optimization software are being used to build mixed-pallets that increase cube space utilization and facilitate efficient unloading at retail locations.
Warehouse Control Software Delivers Value
Warehouse control systems (WCS) provide real-time control of resources, equipment, and material flows across the facility. WCS contains the critical intelligence that coordinates automated and manual processes across a facility that ultimately delivers the desired performance improvements. Many of these systems have evolved to include optimization functionality that prioritizes orders and processes to deliver further performance improvements. In addition, the relatively high level of flexibility inherent in WCS has made them an efficient point of adaptation to the changing requirements and agility required for e-commerce fulfillment. Finally, business intelligence modules attached to WCS provide valuable visibility into real-time status of operations across the facility. Consequently, many vendors consider their control system software to be a critical differentiator between themselves and their competitors.
Emerging Markets Increase Warehouse Investment
Emerging markets are finally automating their warehouses to increase throughput, reliability, and order accuracy. Practitioners in emerging markets have historically been hesitant to invest in automation due to the low labor-costs in their regions. But many companies are now investing in warehouse automation with the goals of operational reliability and order accuracy improvements. In fact, a number of warehouse automation and control vendors attribute much of their revenue growth to projects in the emerging markets of Latin America and Asia.