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Warehouse Management

Evolution of Warehousing Systems: History and Timelines

A deep dive into the history of Warehouse Digitization Systems - Management, Control, and Execution and what the modern-day systems look like.

Team Hopstack
October 20, 2023

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Warehouses have been around for a long time. Some say it goes back to the Egyptian era when they used warehouses to store their yields and crops. While some say, it goes back to the 1300s in Great Britain, where the word - “Warehouse” was first used. Either way, in today’s day and age, the meaning of a warehouse is a lot more complex than it used to be. 

The development in transport and rise in commerce have led the Supply Chain industry to evolve rapidly. Warehousing, which once was just a tiny part of the Supply Chain, is now a significant part that helps drive businesses forward. This has been particularly true for the last couple of decades. The digitization of warehousing methods pivoted businesses and major e-commerce organizations toward implementing modern technology for managing warehouses. 

A lot has happened over the last few years. In this article, we will dive deeper into the history and evolution of warehouses and various associated systems. 

Digitization of Warehousing Systems

In the mid-1900s, the Second Industrial Revolution (also known as the Technological Revolution) drove rapid growth in scientific discoveries, mass production, and industrialization. This growth resulted in the initial digitization of the warehousing system, and the first WMS, called the AS/RS or Automated Storage and Retrieval System, was born. In the 1960s, Demag (now known as Dematic) developed the first Automated Storage and Retrieval System that laid the foundation for the Warehouse Management System that we know today. This Automated Storage and Retrieval System was first used in a book-club warehouse in Germany, which helped streamline the warehousing process. 

Implementation of the Automated Storage and Retrieval System brought many advantages. It reduced labor costs and helped achieve seamless processing and logistics. But that’s not all. One of the main advantages was the tall vertical storage aisles that enabled faster access to inventory and maximized storage space. This innovation made us rethink traditional warehousing. 

Introducing Warehouse Management System

In the 1970s, with the development of computers and mainframes, came the first generation of Warehouse Management Systems, or WMS as it is commonly known. In 1971, Walmart opened its first Distribution Center, which made experts in the industry rethink what was possible for Supply Chain. By 1974, most conglomerates had begun the implementation of UPC Barcodes for their products, making important inventory-related information so much easier to store. In 1975, J.C. Penney developed the first real-time Warehouse Management System, which in simple words, changed the world of the Supply Chain.  

The idea behind the first generation Warehouse Management Systems was simple - identifying what your inventory is, where it is stored, and how much can be sold. The adoption of barcodes gained prominence, making inventory easier to identify and track. The data regarding inventory and other warehouse parameters were stored much more effectively as everything was digitized. 

By the early 1990s, many vendors such as JDA, Manugistics, and Red Prairie, among others, had developed their proprietary Warehouse Management Systems. Commerce at this time was picking up pace and growing rapidly. With the increase in Global Trade, the Supply Chain industry now demanded more. Many conglomerates and organizations had set up warehouses and distribution centers that required different tools for efficient functioning. This led to many innovations and development in the Warehouse Management space.

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How the Warehouse Management System Evolved

By the mid-1990s, warehouses got more and more intricate. Visibility and control posed a challenge, which paved the way for the development of Warehouse Control Systems, which mainly focused on optimizing and controlling the warehouse's functioning. From automating pieces of equipment, conveyors, and carousels, the Warehouse Control System effectively managed many moving parts of the Warehouse. 

Along with the challenges mentioned earlier, managing warehouse workloads was critical. Inventory control, order management, task creation, picking, and packing had to be carried out efficiently. This was enabled by the Warehouse Execution System, which handled parts of the warehouse that needed further processing of tasks. 

At this point, many companies had realized the potential of Warehouse Management Systems (WMS), and they understood to move forward, the Warehouse Management System had to be more robust and powerful. Just providing base functionalities was not enough, which led to the development of the second generation of Warehouse Management Systems.  

The second-generation platform came with many features. One of them was the Cross-Docking feature. This was the ability to seamlessly move the inventory from the point of reception to shipping, which expedited the shipping process. The integration of RFID and RF guns was a notable feature as this changed the way warehouse associates handled and processed inventory. 

Task creation was now automated. In a warehouse, it is essential to utilize the workforce effectively. This is only possible when all the warehouse associates are assigned tasks that can maintain the throughput of the warehouse. As this was automated, the Warehouse Management System strategically created and assigned tasks to the warehouse associates without any higher-level human intervention. 

As software and networking improved, the technology paved the way to interconnect various systems. This allowed different systems to communicate with each other and enhance their functionalities without manually transferring data from the host. 

Implementing these improvements, vendors such as Manhattan Associates and SAP developed enterprise-level Warehousing Solutions that enabled organizations to scale commerce to a whole new level. Manhattan Associates provided the ability to enable Omnichannel Warehousing and Fulfillment. This means it offers solutions to manage orders from online and brick-and-mortar stores, all in one place. This revolutionized how people looked at commerce. The ability to handle everything right from one dashboard meant organizations could now scale their businesses to new heights by integrating the best of both worlds. 

Warehouse Management Systems for the Modern Industry 

In the current times, the Warehouse Management System has evolved dramatically from what it was. Organizations now rely on these platforms for the smooth functioning of their businesses. Around 80% of Warehouse operations are taken care of by these Warehouse Management Systems. From small and medium-scale businesses to enterprise organizations, all need a robust automated solution that could help them focus on what’s necessary. 

Warehouse Management Systems for the Modern Industry 

Technology has evolved rapidly, and these new trends have resulted in some significant improvements to the Warehouse Management System. The typical Warehouse Management Solution employs a client and server-based architecture for their functioning. But with today’s latest technology, like Cloud-based architecture, the older trend is changing. Implementing Cloud for Warehouse Management Systems has many benefits. It offers superior control, improved security, and transparency. When you do not rely on a client and server-based model, you gain the ability to track and control your Warehouse Management System from anywhere.  

Another major benefit of cloud-based Warehouse Management Systems is that they require minimum resources. This means they are very efficient and cost-effective, making them particularly suitable for small and medium-sized warehouses. The concept of the cloud as a service is that you pay for what you buy, which means you do not have to invest in expensive servers that you hope you will need someday.  

That’s not all. Setting up these server systems requires both infrastructure and resources like energy, which are particularly expensive. When you opt for a Cloud-based Warehouse Management System, you gain the power to scale your platform as and when your business grows. 

How Modern Warehouse Management System is Perceived 

Just the fact that technology has evolved to the extent where it stands today simply means in the last few decades, there has been an increasing demand for revolution. This holds true even for commerce and businesses. There have been more small and medium businesses that have emerged in the past ten years than in comparison to the past century. According to a survey, there are 32.5 million small and medium businesses as of 2021, and this number is just for the United States. Regardless of which type of business you consider, every organization needs to understand what is suitable for them and equip their business with the right tools.

Warehouse Management System is one such tool. But here’s the catch - there is no one size fits all concept when choosing the right Warehouse Management System for your business. There are so many different Warehousing Solutions out there and so many variables. With the implementation of Cloud-based architecture, this decision can get more complicated. 

Here’s something interesting that could help. Many enterprises believe the traditional client and server-based architecture is more suitable for their needs. There are many reasons for this - 

  • Number one, enterprises require sophisticated customizations over the stock Warehouse Management Software, tailor-made to suit their business workflow. Having a client and server-based architecture makes this streamlined for their requirements. 
  • Secondly, there is a greater complexity of data that flows between systems, and employing a native server can be particularly beneficial. 
  • Moreover, they have the resources and the infrastructure to employ this kind of architecture. 

On the other hand, small and medium businesses are better off opting for the cloud-based Warehouse Management System. As mentioned earlier, these can be super optimized for their business needs. Not just that, they offer better value as you do not have to invest in a piece of expensive server equipment beforehand. And the level of scalability they offer makes it a no-brainer for being the Warehouse Management System of choice for small and medium businesses. 

What’s Next for Warehouse Management Systems?

Warehouses are getting more and more complex every day. To keep up with this complexity, Warehouse Management Systems have to evolve at a much faster rate. Thankfully, with the available technology and development that’s taking place, it is the best time to equip your warehouse and your e-commerce business with a robust Warehouse Management System

More and more people are shifting towards online shopping, even for the smallest of their needs. Be it daily groceries, trendy apparel, or cutting-edge tech, people simply want the convenience of shopping for it online and having it delivered to their doorstep within no time. With so much potential in the e-commerce industry, it demands a powerful companion like an automated Warehouse Management System to ensure e-commerce business owners and warehouse managers are equipped to face the challenges of such a sophisticated business.  

Robotics for today’s demanding supply chain has become a necessity, and that’s why you need a modern Warehousing Solution like Hopstack. With the ability to optimize and automate almost every step in the warehousing process, Hopstack provides top-of-the-line AI-powered optimization modules that can take your business to a whole new level.

With Hopstack, adding new devices requires no custom code, and optimizing the warehouse for the perfect mix of machine and human workforce is much simpler. You can get detailed insights into device health and uptime all in one place. You can prevent unnecessary device downtimes and failures with proactive alerts and notifications.

With Hopstack’s intelligent Picking Automation, you can easily toggle between batch, wave, discrete, and other picking methods that suit your business requirements. You can effectively measure order picking accuracy and other important metrics. With Hopstack’s intelligent packaging recommendations, you can pack every order with suitable packaging and reduce shipping costs. With Hopstack’s advanced Inventory optimization and synchronous order management algorithm, you can effectively prioritize orders and plan inventory for optimal stock levels. With Hopstack, you can do a lot more. 

To learn more about optimizing your warehouse for peak performance, get in touch with our industry experts!

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