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Can RFID revitalise Warehouse Management?



     The worldwide market for warehouse management systems (WMS) experienced a rough year in 2003, with year-on-year revenues (over 2002) shrinking by 2.7%. But the features and benefits of RFID technology may be positioned to save the ailing WMS market, according to a report from ARC Advisory Group.
     The report, entitled ''Will RFID Save the WMS Market?'', says that in the short term, WMS vendors can help suppliers to the major retailers become compliant by offering add-on WMS modules that allow RFID tags to be placed on cases in the warehouse. This article is copyright 2004 UsingRFID.com.

     But in the longer term RFID capabilities are likely to become part of most suppliers'' base solution. Some manufacturers - not under immediate pressure to become compliant - may also choose to implement RFID capabilities through a WMS upgrade once vendors have RFID-enabled their base packages.

Market decline coming?
     According to Steve Banker, service director for supply chain management at ARC Advisory Group, it is perhaps more worrying that software revenues shrank by 6.9% compared to 2002 because software revenue is a key predictor of future growth in the market.

     "In other enterprise software markets we have examined, this has been a pre-cursor to several years of shrinking revenues," explained Banker, who is co-author of ARC''s market forecast report, ''Warehouse Management Systems Worldwide Outlook: Market Analysis and Forecast through 2008''.

Can RFID save WMS?
     "One question many WMS professionals are asking themselves is, ''Can RFID save the WMS market?''. One thing that is different could play a role in helping to save the WMS market: RFID is hot," concluded Banker, who views RFID as effectively being a hands-free, remote-sensing version of bar code technology.

ARC has created a detailed model of the market gain that it expects RFID to provide, forecasting:


Global distribution centres that will be RFID enabled using WMS solutions.
     Average selling prices of RFID add-on modules, RFID-enabled WMS, and RFID upgrades. While upgrades are generally free for customers paying a software maintenance fee, this is less likely to be true for WMS suppliers that implement OEM RFID middleware from other suppliers.
The software revenue boost, by type of RFID WMS solution, to the WMS market.

     According to Banker, forecasting revenues driven by new technologies is particularly difficult and, for that reason, the key assumptions behind the firm''s predicted ''RFID market lift model'' are also described in detail within the study.




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