TECHNOLOGY

Exclusive Q&A: Lowe’s meets customer expectations with highly automated DC

BY Deena M. Amato-McCoy

In an era when retailers are striving to get merchandise into their customers’ hands as quickly as possible, Lowe’s Companies is banking on a state-of-the-art automated warehouse to step up its game.

When Marvin Ellison came aboard as the home improvement giant’s new CEO in July 2018, he wasted no time in updating the company’s strategic playbook. Among the top priorities: transforming the company’s supply chain to meet the needs of omnichannel customers.

Coinciding with this mission is Lowe’s newest initiative — adding a new direct fulfillment center (DFC) in Coopertown, Tennessee, to its distribution fleet. The 1.1 million sq. ft. facility, which had its grand opening in December, is equivalent in breadth to 22 football fields. It features 22 shipping doors, uses hydrogen fuel to power its forklift fleet, and has 1,800 tons of HVAC equipment. (The building rounds out the company’s network of 35 United States-based distribution centers, three millwork facilities, and five delivery terminals.)

The new center employs 200 associates, and will have as many as 600 employees when it is at full operation by 2023, Donald Frieson, Lowe’s executive VP, supply chain, told Chain Store Age.

Frieson shared with Chain Store Age how the warehouse’s state-of-the-art automation will enable the company to efficiently and accurately ship packages directly to Lowe’s customers, as well as fulfill more than 1,750 stores, and 15 of Lowe’s regional distribution centers.

What makes this building special compared to Lowe’s other distribution centers?
It is the most technologically advanced supply chain facility that Lowe’s has ever operated. It uses state-of-the-art automation that improves our efficiency, and ensures we get products to our e-commerce customers when and where they want it. It opens as we are building a supply chain that can pivot quickly to meet changing customer expectations.

Ultimately, the warehouse will fulfill specific assortments for all 1,700-plus Lowe’s stores throughout the United States, as well as 75% of our e-commerce orders, which will be sent directly to customers.

What products/categories will the new facility fulfill regularly? How many SKUs will be stored there? 
The DFC has the capacity to ship approximately 100,000 packages per day. However, the product assortment being shipped from this facility varies, so our merchandising and supply chain teams are constantly evaluating and adjusting our SKU base.

What elements make it such a sophisticated facility?
It is a highly automated facility. Our investment in automated goods-to-person picking technology (a process that moves merchandise directly to the operator, who can then pick what is needed to fulfill orders) enables the facility to efficiently fulfill customer orders.

The facility also features an advanced unit sortation system that handles individual pieces, which also supports more efficient order fulfillment.

The state-of-the-art technology, along with the processes in place in this facility and its central location, enable us to operate more efficiently, ship faster to our customers and be more responsive.

What is the company’s overall goal for the facility?
The DFC is designed to fulfill 75% of the company’s e-commerce parcel orders within two days, and it will ship certain product assortments to every store in the U.S.

Our success depends on our ability get product in the hands of customers quickly, so our expectation for this facility is that it will enable Lowe’s to continue to improve delivery and serve customers faster, and more efficiently.

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