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06/03/2022

Walmart unveils next-gen fulfillment center model

Dan Berthiaume
Senior Editor, Technology
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Walmart will open four, state-of-the-art fulfillment centers dedicated to e-commerce during the next three years.

The new, high-tech centers will feature an automated, high-density storage system that, among other benefits, will allow the retail giant to double the number of customer orders it can fulfill in a day.

with the first location slated to open this summer in Joliet, Ill. It will service customers across Illinois, Indiana and Wisconsin.  The other three locations are McCordsville, Ind.; Lancaster, Texas; and Greencastle, Pa. When fully open, the four facilities will collectively employ more than 4,000 associates. 

Walmart has been piloting the system, which it developed in partnership with intelligent automation technology provider Knapp,  in a Pedricktown, N.J. fulfillment center. The new system streamlines a formerly manual, 12-step fulfillment process into the following five steps:

  • Unload: Sellers and suppliers send merchandise in cases to a fulfillment center. As the cases arrive, associates unload the trailers and place cases onto a conveyor belt where they’re routed to receiving.
  • Receive: At receiving, an associate breaks the case apart and places the individual items into a tote. The tote is fed into a massive, automated storage system where a shuttle transports it to one of millions of designated locations. The storage system is designed to account for every square-inch, spanning from floor to ceiling in a custom-built structure designed to hold the inventory.
  • Pick: When a customer places an online order, the system goes into action, retrieving their items and shuttling the needed totes to an associate at a picking station. According to Walmart, previously associates would have walked up to nine miles per day, picking items from multiple floors of shelving spread out over hundreds of thousands of square feet of space.
  • Pack: Simultaneously, a custom box is created to fit the exact measurements of the order. In the pack area, Walmart estimates associates can assemble up to four orders at once and send packages to be shipped in less than 30 minutes after the customer clicks to order.
  • Ship: The completed order is then automatically taped, labeled, and routed to its designated zone, where it’s then shipped to its final destination.

Benefits
According to Walmart, the benefits of the new system include more comfort for associates, double the storage capacity, and double the number of customer orders it can fulfill in a day. The retailer is strategically locating these four fulfillment centers to pair most effectively with its 4,700 stores and 210 distribution centers to get orders to customers fast and efficiently.

Walmart says these four centers alone could provide 75% of the U.S. population with next- or two-day shipping on millions of items, including third-party seller Marketplace items shipped by Walmart Fulfillment Services. Combined with its traditional fulfillment centers, the retailer says it will be able to reach 95% of the U.S. population with next- or two-day shipping, and can also offer same-day delivery to 80% of the U.S. population using its stores.

Walmart adds supply chain capacity

These facilities are part of a broader initiative to add more capacity into Walmart’s supply chain as the retailer prepares for growth. In the fourth quarter of fiscal 2022, Walmart U.S. e-commerce cited 70% growth during a two-year period. According to Walmart, six times the number of customers placed delivery orders in the fourth quarter of 2021 as did pre-pandemic.

In response, Walmart has been ramping up its supply chain infrastructure, from expanding its successful pilot of store-based, high-tech “local fulfillment centers” to applying artificial intelligence to the palletizing of products in its regional distribution centers. Recently, the discount giant said it will fulfill online orders placed on Walmart.com from a hub in Salt Lake City, scheduled to open in summer 2022.

The company also plans to build a high-tech distribution center for fresh and frozen groceries in Spartanburg County, S.C., as well as two high-tech supply chain hubs in the Dallas-Fort Worth area and a high-tech center in Lebanon, Tenn. where human associates, artificial intelligence (AI) software, and automated robots working together to ship orders to customers as efficiently as possible.

Walmart has also begun using multi-temperature autonomous box trucks from Gatik to move online grocery orders from a fulfillment-only dark store to a nearby Walmart Neighborhood Market store in its headquarters city of Bentonville, Ark. 

In addition, Walmart has built a tech platform that powers its last-mile delivery ecosystem. Agnostic to supply and demand, and built around its own marketplace, the platform uses automation and machine learning to turn a near-infinite number of factors into usable data.

Through the second half of 2021, Walmart took a variety of steps to ensure it could meet holiday demand in the face of widespread supply chain disruption. Some of these steps included a push for hiring 20,000 new supply chain positions to help move products through its facilities as quickly as possible, as well as adding storage capacity in its fulfillment and distribution network through new facilities.

“Our new next-generation fulfillment center is a first-of-its-kind for Walmart that will transform the way we ship online orders to customers,” said David Guggina, senior VP, automation, and innovation at Walmart. “Through our automated storage system and patent-pending five-step process, we’ll not only provide increased comfort for associates but also double the storage capacity and double the number of customer orders we’re able to fulfill in a day.”