Smart Warehousing Market

[339 Pages Report] The smart warehousing market is projected to grow from USD 20.4 billion in 2023 to USD 40.5 billion by 2028, at a compound annual growth rate (CAGR) of 14.6% during the forecast period. Due to various business drivers, the smart warehousing market is expected to grow significantly during the forecast period. The market is experiencing significant growth due to the increasing incidents of phishing emails and ransomware, and need to ensure consistent adherence to security policies and facilitates audit trails.    The rising cybersecurity threats and complexity, growing ability to detect and respond to security incidents in real-time is also responsible for driving the market’s growth.

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Market Dynamics

Driver: Rising focus on green initiatives and sustainability to minimize waste 

The rising emphasis on green initiatives and sustainability, aimed at minimizing waste and reducing environmental impact, serves as a compelling driving force for the adoption of smart warehousing solutions in the market. These solutions employ advanced technologies like IoT sensors and automation to optimize resource utilization, energy efficiency, and waste reduction within warehouses, aligning with eco-friendly practices. Smart warehousing solutions promote energy efficiency through technologies like LED lighting and real-time data analytics, optimize transportation to reduce fuel consumption and emissions, and minimize waste through improved inventory management. They also contribute to resource optimization, support recycling and circular economy efforts, aid in regulatory compliance, and align with consumer preferences for environmentally responsible practices. Furthermore, by reducing operational costs and enhancing efficiency, smart warehousing solutions offer ecological and economic benefits, making them a vital component of modern, sustainable supply chain management.

Restraints: Data security privacy concerns

Enterprises adopting smart warehousing solutions face security and privacy issues. They possess confidential data, which needs to be protected to avoid data breaches and thefts, as it may affect the reputation of enterprises. The enterprises’ data may leak over the internet and can be accessed by unauthorized users, which is a growing concern. Cloud technology is a growing trend in the warehouse industry. IoT and automated material handling equipment have digitized warehouse operations, and the adoption of cloud technology has further transformed the warehousing and supply chain industry. The use of cloud technology has given rise to certain cybersecurity threats, including data privacy and security concerns, which arise with the rising complexity of smart warehousing solutions.

Opportunity: Advent of AR and VR technologies to streamline warehouse operations

Leveraging AR and VR technologies for warehouse management activities like order allocation, inventory control management, order picking, and material handling can simplify and improve complex warehouse operations, thereby enhancing supply chain processes. Moreover, AR and VR technologies are utilized to enhance worker training, improve operational efficiency, and provide real-time guidance. AR headsets or mobile devices overlay digital information onto the physical environment, assisting workers in locating items, navigating the warehouse, and performing tasks more effectively. VR simulations create immersive training environments for workers to practice skills, emergency response procedures, and equipment operation. For instance, DHL has successfully tested and implemented AR warehouse operations to improve its productivity. Using AR smart glasses, the company was able to use vision picking, which relies on remotely handling an order by picking the correct item and recording information about it without physically touching it. Furthermore, BMW uses AR and VR technologies to improve its production system and warehouse operations. The company’s employees use smart monitors to display information about the piece they’re working on, share it with other employees, and interact with the management by delivering the information that appears in the worker’s field of vision. Adopting AR and VR technologies in smart warehousing improves efficiency, reduces operational costs, minimizes errors, enhances safety, and provides a more agile and responsive supply chain. Thus, it creates significant opportunities in smart warehousing market as companies seek innovative solutions to remain competitive in an increasingly digital and automated world.

Challenge: Slow adoption of smart warehousing solutions due to high capital investment

The digitalization of warehouse operations requires high capital investments that involve the installation of automation equipment, software, and solutions, which incur heavy expenses. The replacement of existing processes is very costly. Another factor hindering the growth of the smart warehousing market is the slow adoption due to the integration complexities of multiple IoT platforms, numerous protocols, and a large number of APIs. The adoption of smart warehousing solutions is not picking up pace, due to the reluctance of organizations to shift from manual practices to the digitalized process involving high capital re-investment. Most enterprises have a laid-back attitude toward new digital technologies and use their intuition rather than adopting digital technologies to make informed business decisions. Hence, companies with limited financial resources are unable to opt for automation warehouse systems, thereby acting as a restraint to the growth of the smart warehousing market.

Smart Warehousing Market Ecosystem

By software by deployment mode, on-premises software segment to account for a larger market size during forecast period

The on-premises deployment of smart warehousing hardware, solutions, and services is a more commonly used practice that offers enterprises the power to manage risks, business processes, and industry policies and enable compliance management. Security and compliance are major concerns for businesses to manage the ever-increasing demand for managing complex warehouse operations. The adoption of on-premises smart warehousing solutions reduces the security risk of handling a huge amount of logistic data.

By technology, IoT registers the highest CAGR during the forecast period

IoT technology has revolutionized the smart warehousing market by providing real-time visibility and control over inventory and operations. The growth of IoT in this sector is primarily driven by its ability to enhance supply chain efficiency, reduce operational costs, and improve inventory management. IoT sensors and devices enable continuous monitoring of warehouse conditions, such as temperature, humidity, and security, ensuring that goods are stored in optimal conditions and reducing the risk of spoilage or theft.

By region, North America holds the largest market size during the forecast period

North America will lead the smart warehousing market in 2023. North America, comprising the United States and Canada, is known for its advanced technology infrastructure and innovative industries, making it a hub for adopting smart warehousing technologies. The region's strong technology ecosystem and continuous innovation make it a key player in driving the development and adoption of these solutions globally.

Key Market Players

The smart warehousing solution and service providers have implemented various types of organic and inorganic growth strategies, such as new product launches, product upgrades, partnerships, and agreements, business expansions, and mergers and acquisitions to strengthen their offerings in the market. Some major players in the smart warehousing market include Manhattan Associates (US), Korber (Germany), Oracle (US), SAP (Germany), Tecsys (Canada), PSI Logistics (Germany), PTC (US), Reply (Italy), Infor (US), IBM (US), Blue Yonder (US), Generix Group (France), Microlistics (Australia), ABB (Switzerland), Microsoft (US), Epicor (US), Made4net (US), Mantis (US), Softeon (US), Synergy Logistics (US), E2open (US), Vinculum (India), Mecalux (Spain), SSI Schaefer (US), WareIQ (India), Foysonis (India), Increff (India), Locus Robotics (US), ShipHero (US), Cin7 (US), EasyEcom (India), Unicommerce (India), and IAM Robotics (US).

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Scope of the Report

This research report categorizes the smart warehousing market based on offering, technology, application, warehouse size, vertical, and region.

By Offering:

• Hardware
  • Radio Frequency Identification Systems (RFID)
    • Passive
    • Active
  • Sensor Networks
    • Environmental Sensors
    • Motion Sensors
    • Proximity Sensors
  • Real-Time Location Systems (RTLS)
    • Indorr RTLS
    • Outdoor RTLS
    • Ultra-Wideband (UWB) RTLS
  • Automated Guided Vehicles (AGVs)
    • AGVs for Material Handling
    • AGVs for Picking
    • AGVs for Sorting
  • Autonomous Mobile Robots (AMRS)
    • AMRS for Inventory Scanning
    • AMRS for Order Fulfillment
    • AMRS for Material Handling
  • Conveyor Systems
    • Belt Conveyors
    • Roller Conveyors
    • Slat Conveyors
  • Other Hardware
• Software
  • Warehouse management System (WMS) Software
  • Inventory Management Software
  • Collaboration and Communication Tools
  • Simulation and Modeling Software
  • Labor Management Software
  • Warehouse Control System (WCS)
  • Other Software
• Software by Deployment Mode
  • Cloud
  • On-premises
• Services
  • Professional Services
    • Training & Consulting
    • System Integration & Implementation
    • Support & Maintenance
  • Managed Services

By Technology:

• IoT
• Robotics and Automation
• AI and Analytics
• Networking and Communication
• AR and VR
• Other Technologies

By Application:

• Inventory Management
  • Real-Time Inventory Tracking
    • Barcode Scanning
    • RFID based Tracking
    • GPS based Tracking
  • Inventory Optimization
    • Dynamic Reordering
    • Safety Stock Management
    • Demand Sensing
• Order Fulfillment
  • Picking-and-Packing Automation
    • Robotic Pickers
    • Goods-to-Person Systems
    • Collaboration Robots (Cobots)
  • Order Routing and Optimization
    • Route Planning Algorithms
    • Multi-channel Order Management
    • Dynamic Slotting
• Asset Tracking
  • Equipemnt and Vehicle Tracking
    • GPS Tracking
    • Telematics Systems
    • Condition Monitoring
  • Product and Package Tracking
    • RFID Tagging
    • Smart Packaging
    • Blockchain-based Tracking
• Predictive Analytics
  • Demand Forecasting Models
    • Machine Learning based Forecasting
    • Time Series Analysis
    • Bayesian Forecasting
  • Predictive Maintenance
    • Sensor-based Predictive Maintenance
    • AI-Driven Predictive Maintenance
    • Failure-mode and Effects Analysis (FMEA)
• Other Applications

By Warehouse Size:

• Small
• Medium
• Large

By Vertical:

• Transportation and Logistics
• Manufacturing
• Healthcare & Life Sciences
• Retail & eCommerce
• Food and Beverages
• Energy & Utilities
• Agriculture
• Other Verticals

By Region:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia and New Zealand (ANZ)
  • South Korea
  • ASEAN Countries
  • Rest of Asia Pacific
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • South Africa
  • Israel
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America

Recent Developments:

• In August 2023, Manhattan Associates announced PacSun, a leading specialty retailer of emerging youth brands and trending fashion, has selected Manhattan Active Point of Sale to enhance its omnichannel sales strategy and deliver a seamless, unified customer shopping experience.
• In August 2023, Infor announced that Zofri will implement Infor WMS warehouse management system to improve customer service, one of the most important performance indicators in the supply chain. The Infor WMS solution will be deployed in the cloud, which is powered by AWS (Amazon Web Services), and will be implemented by Cerca Technology, Infor's partner in Latin America. 
• In May 2023, Manhattan Associates announced its re-imagined Manhattan Active Yard Management solution to expand the company’s vision of a unified supply chain. By redesigning yard management to work seamlessly with its industry leading warehouse and transportation management solutions on a single cloud native platform, Manhattan is completing the digital unification of distribution and logistics where they come together in the physical world.
• In March 2023, Raymour & Flanigan, the largest furniture and mattress retailer in the Northeast and seventh largest in the US, partners with Körber to respond more effectively to today’s consumer challenges through warehouse improvements pushing for greater order accuracy, speed, and customer fulfilment. This enables Raymour & Flanigan to build upon their long-standing legacy of bringing thoughtfully selected pieces of furniture to the places their customers serve, work and live while enhancing the customer shopping experience.
• In January 2023, Tecsys announced its warehouse-in-a-warehouse e-commerce fulfillment solution enabling retailers and brands to execute e-commerce fulfillment flawlessly while leaving existing wholesale and distribution models and legacy systems largely intact.
• In December 2022, Tecsys and SVT Robotics have partnered to develop and launch an out-of-the-box integrated connection between the Tecsys’ Elite supply chain platform and SVT's SOFTBOT Platform. The integration will provide Tecsys Elite customers faster deployment and lower complexity without the need for lengthy custom code development often involved in multi-system automation and robotics deployments.
• In March 2022, Marks & Spencer Reliance India Pvt Ltd (M&S India), a British retailer, and IBM are collaborating to modernize the supply chain, promote connectivity among online and in-store operations, and enhance customer experience. With IBM Sterling Supply Chain Solutions, M&S is expanding its multichannel potential in India.

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