Game-Changer: Warehouse Management Goes Cloud-First

Modern, mobile-based Warehouse Management Systems (WMS) help warehouse teams to reduce lead times, enhance communication, streamline operations, improve order accuracy and cycle time, and reduce costs. The following article from Logistics Management recommends businesses deploy more robots in their warehouses and link their warehouse management systems to the cloud if they want to improve accuracy, enhance throughput, and take the pressure off workers.

An overall push into the Cloud—along with the development of more flexible, scalable software—is making more logistics operations rethink their warehouse management software delivery options.

With public Cloud service spending expected to grow 18.4% in 2021 to $304.9 billion (up from $257.5 billion last year) and the Cloud projected to make up 14.2% of the total global enterprise IT spending market in 2024 (up from 9.1% in 2020), it just makes sense for warehouse management systems (WMS) to follow this trend and move full-bore into the Cloud.

Early on, WMS let transportation management systems (TMS), global trade management systems (GTM), and other supply chain execution software grab the Cloud spotlight. The sentiment was that if a company’s operations were behind its own four walls – as in the case of warehouse management – then there was little need to use Cloud computing to “connect” to outside business partners, customers and more.

With this in mind, many companies stuck to the on-premise software delivery approach when selecting WMS. Fast-forward to 2021, and WMS is now getting more firmly entrenched in the Cloud. “We’re very close to becoming Cloud-first with WMS, and it has been a long journey when you compare WMS to other supply chain software applications,” says Dwight Klappich, research vice president at Gartner.

“If you look at transportation systems and applications like Salesforce, they’ve been Cloud-first for a number of years,” says Klappich. “Now, we’re seeing the next generation of Cloud built around architectures that support multi-tenant Cloud deployment and allow the extensibility [i.e., the ability to add new capabilities or functionalities] that we really needed in WMS.”

Klappich says Manhattan’s Active solution and LEA Reply’s platform are just two examples of how software vendors are already embracing a Cloud-first WMS approach. He says these and other providers are focusing on enabling multi-tenant Cloud, which in the past was challenging due to the level of customizations needed and a lack of extensibility.

Using a concept that Gartner refers to as a “composable enterprise,” companies use packaged business capabilities (PCBs) to rapidly scale up their critical business functions without having to re-tool monolithic software applications or redevelop existing capabilities. In other words, companies can effectively customize their WMS platforms without having to spend an inordinate amount of money or time in the process.

“Shippers can now extend their systems without breaking the code,” says Klappich. ‘This is going to be a game-changer that accelerates Cloud WMS adoption.”

Fast implementations, lower costs

At least for now, Clint Reiser, research analyst at ARC Advisory, says companies are sticking with their existing, on-premises WMS systems, despite the fact that many of those solutions are 10 years to 20 years old and lack modern “bells and whistles.”

Before there can be a full-scale march into the Cloud on the WMS front, Reiser says companies will want to know more about payment models, the ability to communicate across sites, and the system’s architecture. These issues are still being worked out.

“It’s still evolving,” says Reiser, “but it appears to be at the point where the concerns about having WMS in the Cloud have mitigated substantially. There are even some instances where companies would prefer the Cloud.” The latter group includes purchasing departments that use centralized processes, but also need to be able to communicate across multiple sites.

As with most Cloud implementations, the main draws include the fast implementation times and lower upfront costs associated with this software delivery method. Other key pluses include less pressure on internal IT departments—because the vendor handles the patches, updates, and other tech work – and the fact that the software supports both remote and mobile work.

Klappich says that the current wave of Cloud WMS customers tends to be those with technically obsolete systems in place or whose business requirements have shifted significantly over the last year or so. A company with a warehouse designed to move pallets, for example, and is now doing more e-commerce fulfillment due to the pandemic, probably needs a new WMS right about now. Rather than investing in new, on-premises software deployment, that company may gravitate toward a Cloud-based option.

“Technical obsolescence continues to be a big driver for this market,” says Klappich, who adds that the total cost of ownership is one issue that could be holding back Cloud-based WMS adoption right now. “This will probably normalize itself, but for now some vendors are still asking for more money than customers are willing to pay for a Cloud WMS platform.”

The robots are here

Cloud isn’t the only news affecting the WMS software sector this year. According to William Brooks, vice president of Capgemini’s North American transportation portfolio, logistics professionals are looking for ways to align their software systems with the automation, robotics, and digital solutions that they’re integrating into their warehouses and distribution centers (DCs).

These solutions are helping companies improve accuracy, enhance throughput, and take the pressure off of their human labor. As part of their investments in automation, adds Brooks, operations now also have access to better data, reporting and analytics – all of which can be used for better decision-making at the fulfillment level. “This is where WMS shines, by allowing warehouse managers to identify peak times, better utilize labor, and prepare their operations in advance to manage higher order volumes.”

Klappich says putting robots on the warehouse floor directly affects a company’s WMS, especially when a company is using automated equipment from multiple vendors. As the number of robots deployed continues to proliferate in the fulfillment space – with entire fleets of robots handling different tasks – Klappich says tying the vendor’s software into an existing WMS will require coordination.

These realities may lead to the development of a new kind of software. “We think there’s going to be a work coordination’ layer for basically orchestrating the work across a heterogeneous fleet of robots,” says Klappich, who points to Blue Yonder and Manhattan as two vendors who are already moving in this direction. “The software will democratize and standardize the field by deciding which tasks go to which set of robots, versus having to integrate each one of those robots separately.”

Reiser says he’s also seeing more WMS vendors either building out their own warehouse automation capabilities or partnering with companies that are already operating in that space. For example, he says Körber Supply Chain Solutions has been merging its software capabilities with that of its sister companies and with its autonomous mobile robot (AMR) business.

Other software vendors are partnering with third parties like Locus Robotics and 6 River Systems, and then “selling those solutions in conjunction with their software solutions,” says Reiser. “These are just some examples of how the automation-plus-WMS trend is coming together more and more.”

Reiser says some WMS vendors are building out their warehouse control system (WCS) capabilities. “Softeon has certainly made its share of developments in this area, as has Manhattan,” he points out. “And HighJump is certainly bringing in the capabilities that it obtained from becoming a sister company with inconso, so HighJump now has some of its own warehouse control capabilities as well.”

This “blurring of the lines” between automation and WMS will likely continue as companies continue to invest in fulfillment automation. Reiser credits the emergence of flexible, entry-level automation from companies like Locus Robotics and 6 River Systems with helping to propel the interest in software that helps shippers “connect the dots” between their software and their automated equipment.

“This area of automation is growing very rapidly,” says Reiser, “so it only makes sense for WMS vendors to move into that area a bit more.”

A new emphasis on user experience

As WMS vendors reposition themselves to take advantage of some of the newer trends mentioned in this article, Klappich expects more of them to put time and effort into developing a better user experience. This is being driven by customer demand, and the fact that onboarding new employees, training and retaining them have all become more difficult and expensive over the last few years.

“There are still vendors out there that have circa early-2000s types of user experiences,” says Klappich. “Companies haven’t invested much in the user interface, and especially as it applies to the supervisory workforce. However, this is an area where we’re now starting to see more investment.”

Some of that investment is going toward mobile options that allow supervisors to untether from their desks and run their operations while traversing the warehouse or DC floor.

“There is no reason for supervisors to be stuck in their offices anymore, as they need to be able to get out on the floor and have access to the data that helps them do their jobs better,” says Klappich, who sees the increased focus on user experience as part of an overall shift toward creating a more efficient, engaging workplace. “It’s about giving employees tools that makes their jobs better, easier and more enjoyable.”

Bridget McCrea is a contributing editor for Logistics Management


This article was written by Bridget McCrea from Logistics Management and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to