Software continues to occupy the central role in today’s automated fulfillment centers, where compan

Software continues to occupy the central role in today’s automated fulfillment centers, where companies rely on connected systems to manage labor, transportation, planning, data and automation more effectively. The annual Software/Automation Outlook 2026 survey conducted by Peerless Research Group for Modern Materials Handling examined technology adoption, economic factors affecting software purchases, key investment drivers, planned evaluations and the reasons companies implement these systems. Respondents represent a cross-section of supply-chain operations: manufacturers form the largest share (36 percent), followed by wholesalers (15 percent) and transportation or warehousing services (14 percent).

Roles include logistics or distribution manager (24 percent), vice president or general manager (19 percent), corporate or divisional manager (14 percent) and operations manager (12 percent). Large companies are well represented—38 percent work for organizations with 2025 revenues of $250 million or more, including 19 percent at $2.5 billion or higher. Buyer attitudes remain cautious.

Forty percent of respondents describe their companies as cautiously embracing change (up from 34 percent the prior year), while 17 percent take a wait-and-see approach (down from 27 percent). Thirteen percent consider themselves early adopters and 17 percent innovators (up from 11 percent). The current economic environment has influenced investment behavior: 38 percent are holding off on software investments this year (up from 34 percent), and roughly one-quarter are scrutinizing investments and proceeding cautiously.

Seventeen percent plan to upgrade existing software rather than buy new packages, the same percentage intend to outsource more implementations, and 13 percent are moving forward with new investments. More than half (55 percent) report that materials-handling software usage has stayed the same, while 42 percent report an increase and only 4 percent a decrease. Current software portfolios center on several core applications.

Roughly half (49 percent) of companies use warehouse management systems or inventory-management software; 30 percent use supply-chain management or planning software. Other common tools include labor management systems, transportation management systems, asset-tracking software, warehouse execution systems and yard management systems. Over the next two years 25 percent of companies will evaluate, purchase or upgrade their WMS, 21 percent will do the same for WES, and 18 percent for SCM or SCP.

Robotic control systems are under consideration by 17 percent, asset-tracking systems by 15 percent, LMS by 13 percent and TMS by 12 percent. Implementation challenges remain familiar. The top obstacles are total cost of ownership (32 percent), compatibility with existing systems (31 percent), user acceptance (30 percent), integration with existing software applications (29 percent) and lack of resources to implement, manage and maintain systems (28 percent).

Additional barriers include lack of funding (24 percent), software performance issues (23 percent) and compatibility problems with host or legacy systems (21 percent). Warehouse management systems remain the workhorse of fulfillment operations, yet system ages vary. Thirty-two percent of respondents have had their WMS for five to ten years, 27 percent for one to five years, 18 percent for ten to less than fifteen years, and 14 percent for fifteen years or more.

Upgrade activity has slowed relative to the prior year: 27 percent upgraded less than a year ago (down from 50 percent), while 41 percent upgraded one to five years ago. ROI timelines also show variation: 32 percent report more than eighteen months to realize ROI, 22 percent six to twelve months, 22 percent twelve to eighteen months, and 15 percent less than six months. Primary upgrade drivers include replacing existing platforms (62 percent), improved labor management (29 percent), inventory deployment (28 percent), real-time control (24 percent), new picking requirements (23 percent) and slotting systems (15 percent).

Transportation management systems have gained prominence amid rising transportation complexity and cost. Thirty percent of respondents have had their TMS for ten to less than fifteen years and 29 percent for five to ten years; 23 percent have had theirs for less than one year, indicating recent adoption. Thirty-nine percent upgraded their TMS less than one year ago (up from 23 percent).

ROI is often realized relatively quickly: 39 percent report six to twelve months. Supply-chain management and planning tools are used for demand planning (51 percent), manufacturing (49 percent), collaborative forecasting, planning and replenishment (39 percent) and package upgrades (36 percent). Cloud deployment is rising: 41 percent of respondents now run cloud-based applications and 36 percent are evaluating or plan to evaluate them within twelve to twenty-four months.

Top cloud benefits cited are scalability (36 percent), access to analytical data (33 percent) and shared access to the same information (32 percent). Sixty-one percent of companies are using or planning to evaluate cloud-based applications for WMS, TMS, LMS, slotting inc, order management or planning. Artificial intelligence adoption is accelerating.

Twenty-six percent of respondents now use AI (up from 19 percent in 2025), 29 percent are evaluating it, and 11 percent plan to evaluate within two years (up from 6 percent). Only 10 percent have no plans to use AI, down sharply from 25 percent the prior year. Machine learning is used by 19 percent, under evaluation by 26 percent, and planned for consideration by 12 percent.

Internet-of-Things technology is used by 22 percent and under evaluation by 24 percent. Blockchain usage has risen to 17 percent (from 6 percent). These trends underscore software’s continuing centrality in connecting people, inventory, equipment and automation within modern warehouses.