Keep up with these ten warehouse management system trends for 2023 to remain on top of your competitors. Which will you choose to focus on?
Warehouse management systems (WMS) are a vital cornerstone of e-commerce logistics.
They help online sellers get products out of the warehouse and to customers’ homes in the best possible way and are crucial when handling large volumes of products.
“84% of third-party logistics providers use WMS,” according to a blog post by Extensiv. So, if you haven’t yet invested in WMS, you should seriously consider it.
However, like many other technologies we rely on in e-commerce, WMS constantly changes with the arrival of new tech and evolving customer demands.
Yes, trends do come and go, but you don’t want to get left behind by your competitors. While some trends might not last, some are here to stay for the long run.
You don’t want to be playing catch-up when you could be ahead of the crowd. Even if you decide not to follow some of these trends, being aware of them is better than living in the dark.
This article will examine the biggest WMS trends for 2023 and how online sellers can keep up with them.
10 Warehouse Management System Trends for 2023
Most WMS trends are driven by one thing, ‘efficiency.’ Everyone’s looking for ways to speed up their operations, cut dead weight, lower expenses, and reduce mistakes.
These are the ten most important WMS trends to focus on for 2023. Below we have explained what they mean for online sellers and how to align with each trend.
1. Stronger Focus on Advanced Analytics and Data-driven Decisions
Advanced analytics will be increasingly leveraged for data-driven warehouse management decisions.
What this means: Utilizing big data and advanced analytics, e-commerce businesses can gain insights into their operations and enhance the performance of their warehouses.
Such tools can provide value by streamlining inventory, forecasting consumer demand, and eliminating waste in the supply chain.
Using advanced analytics to examine warehouse data can also point to ways e-commerce businesses can lower operating costs and improve customer satisfaction.
Christo Petrov of Techjury explains that poor data quality “costs the US economy up to $3.1 trillion yearly,” highlighting the importance of collecting accurate data.
How to prepare: Data analytics tools and talent are valuable investments for e-commerce businesses. E-commerce companies should ensure their WMS can connect with analytics tools.
2. Cloud-based WMS Solutions Are Becoming More Common
Cloud-based warehouse management systems (WMS) will be in high demand due to their unparalleled flexibility, scalability, and cost efficiency.
What this means: Cloud-based WMS solutions are more cost-effective than on-premise solutions, as businesses no longer need to purchase and maintain hardware and software.
Sellers will also find that cloud-based solutions are highly convenient, allowing staff to access their WMS anywhere on any device.
Additionally, cloud-based solutions can also be easily scaled up or down as the company evolves and responds to customer demand.
According to MarketsandMarkets, cloud-based warehousing has a market growth rate of 22.3% CAGR (Compound Annual Growth Rate), suggesting that it’s growing rapidly.
How to prepare: Weigh up the pros and cons of migrating to a cloud-based WMS solution and ensure you have the IT capabilities to support it.
3. The Internet of Things is Here to Stay
The Internet of Things (IoT) has proven that it can make an enormous difference in the efficiency of e-commerce operations.
What this means: With the advent of IoT, e-commerce firms can now keep tabs on their inventory, staff, and assets in real time.
IoT helps business owners better understand what is happening in their warehouses, streamline operations, cut unnecessary costs, and ensure customer satisfaction.
Many IoT devices use sensors to monitor a product’s location and condition. Meanwhile, wearable tech can help keep tabs on warehouse personnel’s whereabouts and work activity.
According to estimates from Statista, by 2025, up to 30.9 billion devices will be connected to the IoT, an enormous increase from 0.8 billion in 2010.
How to prepare: Consider how IoT-enabled devices may benefit your warehouse operations.
4. Expect Artificial Intelligence and Machine Learning to Play a Big Role
Artificial intelligence (AI) and machine learning (ML) will improve efficiency by automating processes, recognizing patterns, and predicting outcomes.
What this means: Automating tasks will free up time, uncovering unique patterns will provide insights into warehouse operations, and predictions can optimize warehouse processes.
Nowadays, AI is used in many business areas, like forecasting customer demand, optimizing stock levels, and automating order completion.
Meanwhile, machine learning can be invaluable in recognizing customer patterns and trends, which can help companies place products more effectively within the warehouse.
How to prepare: To stay ahead, e-commerce businesses should make the most out of AI and ML tools and ensure their WMS is compatible.
5. We Will Welcome More Robots and Automation
Robotics and automation will continue to be a staple in the industry, reducing labor costs and increasing accuracy for warehouse tasks.
What this means: Robots can increase accuracy by picking, packing, and sorting orders, while automated sorters can sort and route packages, reducing dependence on manual labor.
Theoretically, this should also enable businesses to reduce lead times and improve customer satisfaction.
This trend is still relatively young, of course. According to a report by Businesswire, over 80% of warehouses still don’t use automation.
However, it added that in the last decade, around 15% of warehouses were in the process of being mechanized, and up to 5% already were.
How to prepare: Consider investing in robotics and automation technology and ensure that WMS can integrate with these tools.
6. Expect More Drones
The use of drones for inventory management and delivery may become more widespread as they offer faster and more efficient delivery options.
What this means: Drones can deliver products directly to customers’ homes or transport inventory inside and between warehouses.
In June 2022, Amazon announced that customers in Lockeford, California, would be the first to receive deliveries by drone in what Amazon calls, ‘Prime Air.’
However, there’s a caveat—regulation and health and safety.
As Top10erp.org explains, there are no sufficient rules on drones in indoor environments, and there isn’t much data on how safe they are when used around humans.
How to prepare: For this trend, e-commerce businesses should investigate how drone technology may improve their warehouse operations and if they’re worth the risk.
7. Mobile Devices Will be Leveraged More
Smartphones and tablets will continue to be integrated into WMS, improving real-time tracking, communication, and data analysis.
What this means: Integrating mobile devices will enable warehouse personnel to access data and communicate from anywhere in the warehouse, improving efficiency and reducing errors.
The most obvious example is utilizing barcode scanning apps that can scan products and update inventory records.
Other reasons to use mobile devices include:
- Managing the inventory from the warehouse floor.
- Overcoming network issues.
- Enabling staff to make informed decisions.
How to prepare: To prepare for this trend, e-commerce businesses should ensure they can integrate mobile devices with their WMS.
8. Warehouse Visualization Is a Must
It is now a necessity for warehouse management systems to provide sellers with a bird’s-eye view of the products stored in warehouses and their pathways.
What this means: Warehouse visualization will open your eyes to how products are moving around your warehouse and can help you find the optimal places to store them.
For example, if a product leaves shelves regularly and quickly, it may be better to store it towards the front of the warehouse instead of the back.
Similarly, you may have difficult-to-store products that could be better located, and there may also be areas that would be better to keep free to move products around.
Most importantly, you can see where every product and employee is at any given time and watch every inch of the warehouse from the comfort of the office.
How to prepare: Ensure your next WMS comes with warehouse visualization features to monitor how your products move about the warehouse.
9. WMS Needs to be More Flexible
Customer demand for faster and more accurate order fulfillment is driving the need for more flexible WMS solutions.
What this means: This will require e-commerce businesses to adopt WMS solutions that can handle high-volume orders and adapt to changing business and customer needs.
For example, WMS solutions that dynamically allocate inventory based on demand will become increasingly important.
How to prepare: Ensure your WMS can handle high volumes of orders and is flexible enough to adapt to changing customer needs.
10. You Can No Longer Afford to Miss Out on Sustainability
Warehouse management systems need to prioritize sustainability, with a better focus on energy efficiency, waste reduction, and eco-friendly practices.
What this means: E-commerce businesses will be under increasing pressure to reduce their environmental footprint and adopt sustainable practices throughout their supply chain.
Companies that use WMS solutions that optimize inventory levels to reduce waste and minimize the use of fossil fuels in transportation will become preferable to customers.
Many supply chain companies are already ahead on this trend. Businesswire reported in 2020 that 81% of companies were more focused on sustainability than three years ago.
The report noted that supply chain management was a key area where changes were needed to achieve sustainability.
How to prepare: E-commerce businesses should adopt sustainable practices throughout their supply chain and consider cutting processes that are not environmentally friendly.
What are the Benefits of a Warehouse Management System?
For those with no clue where to start with WMS, let’s quickly break down why it’s so crucial for online sellers.
- Digitalize your operations. This comes with a host of benefits, but the best is better visibility of your operations and the ability to integrate with other useful systems.
- Set efficiency targets. With a clearer view of your warehouse, you may uncover inefficiencies you didn’t know existed and create a plan to put a stop to them.
- Trace your inventory. It will be easier to track your inventory across your warehouse, reducing the chances of stock disappearing or ending up in the wrong place.
- Forecast demand. With a better understanding of what’s coming in and out of your warehouse, you’ll more accurately order products based on their demand.
However, on the flip side, as we’ve noted with many of 2023’s WMS trends, there are plenty of things you consider when using a WMS.
The most significant consideration to take into account is that you will have to upskill your staff to use this new tech, or you may need to hire more technically-minded staff.
Types of Warehouse Management Systems
Not all warehouse management systems are the same. In fact, there are five primary types of warehouse management systems you should know about before making any decisions.
1. Standalone (Basic)
Standalone warehouse management systems are the most basic you could ask for. This is an excellent place to start if you are a small business looking to simplify your warehouse management.
While you can deal with most warehouse-related tasks well with a basic standalone WMS, you may need something more sophisticated as your company grows.
Larger companies with more complex warehouse operations will need something more advanced.
As we explained earlier, cloud-based WMS is growing, and we may eventually see it become the industry standard, and older, non-cloud-based systems may soon be phased out.
To start, cloud-based WMS are easier to maintain, typically cheaper to use, and will save you a ton of storage space (say goodbye to your server!).
Additional benefits can include tighter security and better user experience.
As the name ‘bolt-on’ suggests, this type of warehouse management system is like an extra feature you add to your current warehouse operations.
Bolt-on WMS work with existing solutions and doesn’t require a company to change its systems and the way they do things, such as moving to the cloud.
Companies can continue their operations as they always have and add additional layers of functionalities as they wish without interrupting their flow.
Bolt-on solutions are best suited for companies that want to limit the number of changes they’ll have to implement.
4. Supply Chain Module (SCM)
A supply chain module is similar to a standalone WMS but usually offers an array of more advanced features that warehouses can benefit from.
The most beneficial is the ability to automate inventory and warehouse management, and SCM is arguably better suited to companies that want to monitor their entire supply chain operations.
One drawback could be that your SCM may offer features already covered by other software your company uses, and it may feel like a wasteful investment.
5. Enterprise Resource Planning (ERP) Module
ERP module offers a lot more than just WMS. These platforms often include features that assist with accounting, customer services, and even human resources.
Essentially, an ERP can be used to run an entire e-commerce business. Naturally, such an option is better suited for a larger organization.
However, deciding to run an entire business on one system can be a giant leap.
Best Warehouse Management System
Predictably, there’s a lot to consider when shopping around for a good WMS. Taking 2023’s warehouse management system trends into account, here’s a quick checklist of what to look for:
- Easy to use. It shouldn’t be a massive learning curve for your employees to learn how to use a new WMS.
- Easy to integrate with your other warehouse tech. Undoubtedly, you will use other tools in your warehouse, and your new WMS should work seamlessly with them.
- It is updated regularly. A new WMS is useless if it becomes outdated quickly. You don’t want to be considering a new solution for at least several years.
- Sustainable. Ideally, the warehouse management system you choose shouldn’t waste resources.
- Valuable data collection and analysis. The data your WMS collects should provide you with actionable insights that can help you improve your operations.
- Flexibility. Particularly when it comes to changing customer demands and dealing with warehouse crises.
- Accessible everywhere (e.g., mobile devices). Accessing a WMS through a mobile device instead of a desktop will save employees a lot of back and forth.
- Cloud-based. With the benefits cloud-based warehouse management solutions have, there’s practically no reason not to use them.
- Task automation. The fewer manual tasks you have, the more time you will have for important tasks.
- Warehouse visualization. Improve how products are located and transported around the warehouse by viewing them from above.
- Accountability and traceability. Monitor your employees’ performance and retrace mistakes.
- Reporting. Receive practical reports on the products stored in your warehouse to identify and investigate any discrepancies.
If these are all things you can’t miss out on, then Sellercloud’s Skustack is your best option for a powerful warehouse management system with the most advanced features.