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09/29/2022

EYE on RETAIL: Walmart's next-gen fulfillment center

The 1.1 million-square-foot, high-tech facility is the first of four state-of-the-art fulfillment centers the retailer is dedicating to e-commerce.
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Walmart distributoin center

Walmart is debuting a proprietary supply chain automation system in its new high-tech fulfillment center.

Located in Joliet, Ill., and described as the "first-of-its-kind" for Walmart,  the 1.1 million-square-foot, high-tech facility is the first of four state-of-the-art fulfillment centers dedicated to e-commerce that Walmart plans to open during the next three years. It will store millions of items available on Walmart.com, that are then picked, packed and shipped directly to customers.

The new center will also fulfill third-party Walmart Marketplace items shipped by Walmart Fulfillment Services (WFS), the company's end-to-end fulfillment service for third-party e-commerce sellers.

First announced in June 2022, Walmart's new next-gen 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.

Once completed, the four next-gen centers for Walmart could provide 75% of the U.S. population with next- or two-day shipping. The other three locations are McCordsville, Ind.; Lancaster, Texas; and Greencastle, Pa. 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.

“Customers continue to expect faster delivery times and we are excited to be able to meet those needs with these new high-tech facilities,” said Karisa Sprague, senior VP Fulfillment Network Operations, Walmart U.S.“The addition of the Joliet next generation FC, paired with our 31 dedicated e-commerce fulfillment centers, will allow Walmart to fulfill online orders for Walmart.com and Walmart+ customers with greater shipping speed in the mid-west region. And, with the holidays around the corner, we’re excited to provide a more seamless experience for our customers.”

The facility is still actively hiring, with a goal to employ more than 1,000 local full-time associates by the end of the year.  

Walmart adds supply chain capacity
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.

Headquartered in Bentonville, Ark., Walmart Inc. operates more than 10,500 stores and clubs under 46 banners in 24 countries and e-commerce websites.

(This article originally appeared on HBSDealer's sister site, Chainstoreage.com.)