Smart Warehousing Market Expected to Reach $83.7 Billion by 2032

Smart warehouse systems aim to offer companies real-time visibility, facilitating process optimization and the ability to make instant adjustments for enhanced operational efficiency. These systems also have the potential to significantly reduce human errors and enhance safety and security within the facility. In essence, the key advantages of a smart warehouse lie in its capacity to save time and resources for the company, boost profits, and elevate client and customer satisfaction levels.

Smart warehouses use technologies such as automated guided vehicles to enhance their productivity. Automated guided vehicles (AGV) provide the flexibility to automate warehouse operations without requiring substantial alterations to the current warehouse layout. Moreover, smart warehousing capabilities such as automated picking and mobile sorting solutions enable the utilization of taller racks and narrower aisles within the warehouse. This feasibility results in the ability to store a greater quantity of products in a more compact space.

Automation and robotics technology is advancing at a significant pace. This has enabled warehouses to automate their processes, and reduce the number of workers; thereby, reducing labor and operation cost. In addition, growth in industries such as pharmaceutical, food & beverage, automotives, and textile, has increased the number of warehouses and complexities related to it. Therefore, warehouses make wide use of automation, to be more productive, while being error free in their operation. Machinery and systems such as automated storage and retrieval systems (AS and RS), mobile robots, significantly enhance the efficiency of warehouses and reduces labor cost. Such factors are expected to propel the demand for automated hardware in the smart warehousing market share.

The main purpose of automation in a warehouse is to efficiently manage the workflow of the warehouse. This is achieved by using various software, owing to the automation offered by them. In addition, the warehouses gather a large amount of data that is converted into useful insights using computer systems. Moreover, the transaction of the goods and other inventory occurs in large volumes, this is typically difficult to manage with the help of human efforts. In addition, this also eliminates the possibility of human error. Such factors are expected to drive the demand for software by the warehouse for its automation.

Increase in disposable income of masses has increased the demand for products such as personal care, apparel, and groceries. In addition, the rise in industrial sectors such as automotive, pharmaceuticals, and food & beverages, has positively affected the manufacturers of industrial components, hardware, and industry specific raw materials. These are driving the growth of manufacturers and distributors. However, this has resulted in a stressed supply chain network, including warehousing, and logistics. Therefore, the companies are adopting warehouse automation, to ease the task of warehousing, distribution, and overall management of the warehouses. This is expected to foster the smart warehousing market size.

Furthermore, the e-commerce industry is relatively large in the U.S., and has been growing rapidly. For instance, according to the Census Bureau of the Department of Commerce of U.S., the retail e-commerce sales for the second quarter of 2022, was $257.3 billion, an increase of 2.7% from the first quarter of 2022. Such factors are expected to fuel smart warehousing industry.

The smart warehousing industry is fragmented on the basis of offering, application, and region. On the basis of offering, the market is bifurcated into hardware, and software. On the basis of application, it is segmented into automotive, food and beverages, chemicals, pharmaceutical and others. Region-wise, it is studied across North America, Europe, Asia-Pacific, Latin America, Middle East and Africa.

In addition, the smart warehousing market analysis is highly competitive, with several key players dominating the industry. Prominent manufacturers focus on innovation, product differentiation, and strategic partnerships to maintain their market positions. Market leaders include companies such as Locus Robotics, Smart Warehousing, Tecsys, ABB, Epicor Software Corporation, Infor, IBM Corporation, Microsoft, Blue Yonder, Inc., and Softeon  among others.

Canada is a major economy in the region, with a considerably large population having high disposable income. Inhabitants in Canada spend significantly on the food & beverage products. For instance, according to the Statics Canada, in 2021, the food & beverages sales increased by 11.8%, on year-on-year basis. In addition, the volume of sales increased by 4.9%. Food and beverages industry consists of a large inventory, and to manage it, warehouse automation systems are required.  Food and beverage businesses manufacture goods in large quantities that require storage to preserve their quality until they reach consumers. Smart warehouses play a crucial role in controlling the risk of spoilage and contamination, providing a secure means of storing products before reaching the end consumers. In addition, inventory management software leads to a decrease in inventory levels, improvements in order fulfillment and the time it takes to complete order cycles.

The software used in smart warehousing market forecast effectively regulates the operations and processes within a warehouse and distribution center. It ensures immediate visibility, automation, and optimization of diverse tasks, which includes inventory management, order fulfillment, receiving, picking and packing, shipping, and the overall task of warehouse operations. Moreover, it helps in boosting productivity, minimizing errors, elevating customer satisfaction, and realizing cost savings within the supply chain.

More than 60% of the firms that operate in every industry are small-medium enterprises, except for oligopoly and monopoly in a few industries such as the defense and weapons industry. Furthermore, owing to increase in the number of players, and rise in competition, the small- and medium enterprises are adopting warehouse automation. Warehouse automation enables the companies to improve their material handling and inventory handling activities. Moreover, elimination of human factor from most of the warehousing activities has reduced possibilities of errors. Such factors are driving the growth of the smart warehousing market.

The emergence of warehouse automation has reduced the time and effort required to scan and update stock inventory, pack parcels, arrange items on the shelves, and complete other related tasks. This has led to quick delivery to customers, which helps the players gain a competitive advantage. Thus, rapid growth of e-commerce also drives the increase in the demand for smart warehousing.

Moreover, the production in the automotive industry is mostly on the assembly-line, in which various parts and equipment are supplied by original equipment manufacturers (OEM) in huge volumes, which requires the warehousing of these parts and equipment in a more organized manner. Warehouse automation helps in maintaining these warehouses in an organized manner by properly sorting, assembling, and picking & placing the parts and equipment in the assembly line. Such factors are anticipated to drive the growth of the market.

KEY FINDINGS OF THE STUDY

• By offering, the software segment is anticipated to exhibit significant growth in the smart warehousing market in the near future.
• By end user, the pharmaceutical segment is anticipated to exhibit significant growth in the Smart warehousing market in the near future.
• By region, Asia-Pacific is anticipated to register the highest CAGR during the forecast period.