Market for Warehouse Automation Systems Heats Up

The fragmented market for warehouse automation systems is heating up as more companies begin to perceive this software as being a crucial part of their enterprise applications. That was the word from Greg Girard, senior supply chain analyst at Advanced Manufacturing Research (AMR). Girard last week gave AMRs first presentation on warehouse management, speaking at the Boston-based research firms fall customer conference in Orlando, Fla., Nov. 5-7.

"The warehouse management system is an enterprise application today," says Girard. He estimates the market for these systems will hit $450 million this year, plus another $200 million for systems integration costs to install the software. But instead of being concerned about such basic warehouse issues as "what do I have, where do I put it, and how do I pick it," Girard says the new warehouse automation software is aimed more at providing tight integration with both transportation and order management.

One drawback to this markets expansion has been that its fragmented, which leaves some potential buyers concerned about the staying power of some warehouse automation vendors. "By and large this has been a custom-application market, which, by its definition, means fragmented," Girard told the conferences 700 attendees. "Scale instills buyer confidence" he added.

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