Online shopping and omnichannel fulfillment, accelerated by the pandemic, are bringing the warehouse of the future much closer to the present, with five macro warehousing management systems (WMS) trends emerging, says market intelligence firm IDC in its insight report ‘The Warehouse of the Future Runs on Cloud’.
“The future warehouse requires speed, agility, and flexibility; it will also require different models and setups, depending on product type and size, fulfillment models, distribution strategy,” says Jordan Speer, Research Manager, Global Supply Chain at IDC.
“Many factors are driving organizations to move to a cloud WMS. Chief among them is the rise in ecommerce and the various methods of fulfillment it is spawning, each of which adds more complexity to the supply chain and ups the ante on the need for fast, accurate, scalable, and agile operations,” she adds.
The sharp rise of ecommerce also necessitates moving closer to the consumer. The warehouse space shortage is escalating dramatically as retailers and distributors vie for real estate near population centers to speed product to the customer. This need for localization is one of the drivers behind the growth in the fulfill-from-store delivery model, Speer points out.
“As micro-fulfillment centers and stores as mini-warehouses move into the mainstream, they will need to work in tandem with distribution centers and warehouses —all enabled with one view of enterprise inventory ― operating with high levels of efficiency to fulfill ecommerce orders while considering the needs of in-store customers,” she says.
Noting that one of the early lessons from the COVID-19 pandemic has been the inflexibility of inventory (in both form and location) and the need to have more flexible, “smart” inventory, in the future, Speers expects an increase in:
1. Dark warehouses, which are completely automated and require no human involvement
2. Dark stores, closed locations that have been turned into mini-fulfillment centers
3. Fulfill-from-store formats, which essentially turn a store into a warehouse
4. Localization of micro-fulfillment warehouses — siting facilities near high-population urban centers to enable faster and less expensive order fulfillment (Depending on the company, these warehouses may be stocked from larger distribution centers in a hub-and-spoke model or receive product directly from the manufacturer.)
5. Automation of warehouses, including more traditional materials handling conveyors and equipment and automatic guided vehicles as well as increasingly sophisticated autonomic mobile robotics that move flexibly around the warehouse
“Managing the activities of future warehouses and connecting them to events outside the four walls — effectively and profitably — will be impossible without the visibility and agility of cloud. IDC’s Worldwide Supply Chain Management Applications Forecast, 2020–2024 predicts that by 2024, nearly 30% of supply chain management applications will be in the cloud and 31.8% of inventory management applications software will be cloud based,” Speer asserts.