WMS in Russia: expansion details

The concept of a warehouse management system (WMS) came to Russia along with the first wave of financial crisis - in 1998. But its emergence was caused just not by the collapse of national currency here, and the previous years of rather stable economic development during which there were first big trade warehouses and along with them the problems connected with effective management of them.

1998-2000

Without having own experience, a number of the Russian IT companies made attempts to bring the western WMS platforms to Russia. For example, the Solvo company tried to bring to the market the American WMS from RGTI. But devaluation of ruble made the systems of the western production which cost at that time reached tens and even hundreds of thousands of dollars, very heavy capital investment for domestic business.

Local players had other way – creation of WMS systems on own platforms which, on the one hand, would satisfy local customers in terms of compatibility with features of their business, with another – would be it on a pocket. Provided to Solvo in 1999 own program developments.

2000-2002

First who ventured implementation of WMS in Russia became the pharmaceutical and alcoholic companies that, generally, corresponds to trends of the world market. It is connected with the fact that sellers of medications and alcohol conduct strict control of batches and certificates of products for obvious reasons. To arrange the storages, they selected warehouse management systems, new then for all.

In the natural way the market of WMS in Russia developed within two-three years, and emergence of new solutions of players which went there where there was demand became the next qualitative stage of its development. In 2001-2002 WMS of the CoreWMS system ("Argus Software"), the system of Akant company (now "Adilius) and Vector from "BSE" appeared.

As for the systems of a foreign origin, their implementations during this period were single: as usual, such WMS came to local market together with branches of the foreign companies which built the IT infrastructure in a uniform key with parent organizations. Historically alignment of forces on WMS the market between the Russian vendors and foreign players was fixed for benefit of the first.

2002-2004

The first WMS systems which set the Russian companies were quite simple on the functionality and, as a rule, included in themselves address storage of products and operating by these products using barcodes. However already it, in comparison with simple paper transactions, allowed to reach a sufficient order in storages and, as a result, visible effect for business. One and a half-two tens were one more result of the first projects, and them by this moment, there was an optimization of work of workers of a warehouse.

At this moment the western vendors (Radio Beacon WMS, Exceed WMS) at last paid attention that in Russia for them huge field of activity opened, and began to do attempts of an exit to local market through partners. Their main advantage at that time was the width of functionality of the platforms, unlike domestic solutions created for many years.

Quite often the piety before the western platforms (namely then consultants the phrase best practices - "best practices" became current) provoked customers to implementation of functionality in which they understood little and which, perhaps, and to them was not necessary. However gradually this functionality was tested and rolled that really led to improvement of efficiency of warehouse storages. Then to WMS systems also one more requirement appeared: they had to improve service quality for what in a system were put certain KPI.

In the market at this moment also new domestic solutions appeared: WMS "Buhta", Lead WMS (Logistics), AZ.WMS ("Az-gruppa") and solutions on the 1C Platform.

2004-2007

The beginning of 2005 for the Russian market of warehouse management systems was marked by its rapid growth. The idea of automation of a warehouse became universal, the poet demand for specialized solutions began to increase in geometrical progression. This circumstance was supported with the fact that in 2006 the set of commercial warehouses of class "A" which according to classification should be initially automated was brought to the market.

Such customers, being guided by the best western practices, often selected platforms of a foreign origin that paved the way to Russia to systems HighJump Software Oracle PSI Mantis, RedPrairie and Manhattan Associates. It is logical that the average cost of projects increases, and the amounts to $1 million surprise nobody any more. At the same time local solution providers work in other price segment – medium and small business so their interests are almost not crossed. For customers defining at this moment there are an experience of consultants, the budget and terms of the project. With this message the market of WMS approaches by 2007 where all specified trends are fixed.

2008

2008, for obvious reasons, becomes a separate and not most positive stage for domestic WMS of the market. Though before memorable crisis of analytics predicted that overheating of the market cannot last eternally, events of fall of 2008 painfully struck demand for WMS. Suppliers who by this moment carried out active expansion in regions upon the demand of customers were forced to freeze projects for a period of several months and more.

About half a year in the market there was a "dead" silence. Only projects at a final stage and a stage of support were not closed at this moment. Naturally, new players who in the majority did not reach "final" stages yet fall into a distress. The western suppliers, meanwhile, being guided by a new rate of dollar, raise the cost of licenses for 40-50% that does not do well them.

2009-2010

Together with an economic recovery after shock in 2009 and, especially,  2010 the market returns to those parameters which were already reached at peak of its development in 2005-2006. Crisis taught customers to calculate own forces therefore in the market of WMS there is an accurate differentiation of systems: simpler and cheap are selected against the background of respectively expensive functional platforms which are not selected so recklessly without existence on that certain bases any more.

Demand is fed by FMCG brands and large retail. As for logistic operators, here return of the investments enclosed in the project depends on the rational organization of warehouse space, personnel problems, optimal use of technical means, competent pricing. Therefore for them IT tools it already not only systems of accounting of merchandising, but also the full-fledged systems for management of many aspects of warehouse activity. Such companies maintain demand for WMS of the highest level with wide feature set.