The age of manual warehouse management processes is finally heading to extinction. It doesn’t matter how efficient current manual warehouse optimization processes become or how efficient separate data analytics teams conduct warehouse analytics — enterprises need the combined embedded warehouse management system process automation and artificial intelligence offered by smart warehouse management systems (WMS).

As we covered in Enterprises Go Big on Warehouse Management Systems market research firm, The Insight Partners, predicts the WMS market will grow from $14 billion in 2022 to $51 billion by 2030 — an annual growth rate of 17%. The investments in WMS are occurring for various reasons, including the rising use of business-to-consumer drop shipping and investments worldwide focused on strengthening logistics infrastructure for more efficient warehouse workflow.

Because of their ability to improve warehouse productivity and efficiency while reducing human error, much of that investment is going toward smart WMS. Smart WMS promises a network of automated technologies that adapt quickly to changing market variables and offer scalability, agility and compatibility with other platforms and software. Further, smart WMS improves efficiency and output across the supply chain as it streamlines processes and optimizes inventory management. Something absolutely essential with the shortage of skilled warehouse staff. Consider this: Deloitte predicts that there will be a 2.1 million person labor shortage in U.S. manufacturing by 2030. The continued rise of e-commerce sales will essentially drive that shortage.

A smart WMS uses AI and machine learning to optimize inventory levels, predict demand and improve warehouse analytics.  When properly implemented, a smart WMS promises to help warehouse managers identify patterns and make informed decisions about inventory management and order fulfillment.

Beemal Vasani, a director at Ansell, says organizations are looking to optimize their warehouse operations to beat inflation and function effectively with a lighter staff. This, in turn, is “creating a new dependence and demand for capturing accurate data and utilizing it to future-proof operations,” he says.

With that in mind, experts we reached out to cite the five most important benefits of smart WMS: 

Continuous Intelligent Adaptation

Smart WMS helps enterprises adapt continuously through real-time asset and supply chain updates, optimize manual tasks and increase automation to more efficient inventory management. To be most effective, smart WMS should be connected to such tools as radio frequency identification, mobile device management, robots, drones, automated guided vehicles and the Internet of Things (IoT) sensors.

Ansell’s Beemal contends that warehouse managers can better equip their staff through wearable and connected technology that encourages team communication. “A connected workforce can not only create better communication and workplace culture, but it can reduce risky movements for workers, keeping them safer,” he says. 

More Effective Supply Chain Management

Connecting the Smart WMS to the physical world can also improve visibility across the supply chain. Eran Abramson, head of marketing and supply chain management firm Chainlane, says a manufacturing client they work with has combined hardware and software integration to gain detailed insight into their entire assembly and fulfillment process. “This detailed visibility also provides warehouse management the status on productivity and labor resources, including tracking actual RTIs (returnable transport items) such as pallets that leave the warehouse to make sure they are returned (they’re still considered inventory and incur costs), or located for additional use,” Abramson says.

Granular Inventory Control

Scott Lard, GM and partner at consultancy IS&T, says the investment in smart WMS and IoT will bring real-time inventory tracking. Smart WMS provides real-time updates and optimizes manual tasks, allowing for more granular inventory control, ongoing inventory levels and movement monitoring, and up-to-the-minute inventory status. “WMS can also provide real-time data analytics and reporting, allowing managers to make data-driven decisions and identify areas for improvement,” he says.

Greater Efficiency

Jayesh Jain, senior vice president of Sales at Sage Software, cites enhanced productivity. With the increased visibility throughout the supply chain, processes can be more readily optimized and automated. This reduces human error and saves time. For greater efficiency, warehouses can integrate their smart WMS with automated guided vehicles, inventory control platforms and IoT sensors.

Improved Analytics and Forecasting

Because the smart WMS is connected to many data sources throughout the warehouse, the system can make immediate decisions based on inventory levels, logistical problems within the supply chain, shipping trends and more. Warehouse managers can more easily spot patterns to make smart decisions. Once fully implemented, these systems should help warehouse managers better predict demand and more accurately optimize inventory levels.

While smart WMS do promise increased automation, better forecasting, increased efficiency and a more agile warehouse, these systems are not plug-and-play. They can be costly to implement and challenging to integrate. Our next story on smart WMS will provide insights into the best deployment strategies.