Walmart makes a deal to automate and own the last mile
Walmart’s strategy for owning the last mile has come into clearer focus with news that the retailer has acquired the robotics automation specialist Alert Innovation.
The two companies first began working together in 2016 on ways to customize robotic technology for deployment in Walmart’s market fulfillment centers (MFCs). Walmart began testing Alert Innovation’s Alphabot system in late 2019 at an MFC built into the back of a supercenter in Salem, NH.
The system uses autonomous carts to retrieve and assemble online orders of frozen, refrigerated and shelf-stable products for pickup and delivery. Associates check each order to assure accuracy and bag the products to go out to customers. Fresh foods continue to be picked by Walmart associates.
A distinguishing feature of the system, according to David Guggina, senior vice president of innovation and automation, Walmart U.S., is that the bots move “horizontally, laterally and vertically across three temperature zones without any lifts or conveyors. This provides fewer space constraints inside the MFC and eliminates the need to pause the entire system for bot maintenance.”
Walmart has continued to put more emphasis on local fulfillment in an effort to deliver orders to customers more quickly and at a lower cost. This is particularly important for the chain that generates most of its revenues in margin-challenged grocery categories.
Scaling the technology, Mr. Guggina writes in a company blog, will help Walmart further build on the strength of its local operations. The chain has 4,700 stores within 10 miles of 90 percent of the U.S. population.
Walmart will continue to build on technology investments in its regional distribution centers and its next-generation fulfillment centers (FCs). Earlier this year the retailer announced that it would open four FCs in Joliet, IL; McCordsville, IN; Lancaster, TX; and Greencastle, PA over the next three years.
The FCs feature automated, high-density storage systems that streamline a manual, twelve-step process into five robotics-driven steps: Unload, Receive, Pick, Pack and Ship. In the picking process, warehouse workers only have to wait for a tote to bring the ordered item instead of walking up to nine miles each day across multiple floors to find products.
These next-gen facilities are capable of providing one- or two-day shipping to 75 percent of the population. Walmart will be able to offer the same shipping times to 95 percent of the population when its 31 dedicated e-commerce warehouses are added in.
- Expanding Walmart’s Market Fulfillment Center Capabilities Through Automation – Walmart
- Alert Innovation Signs Definitive Agreement to Be Acquired by Walmart – Alert Innovation press release
- Is Walmart’s Alphabot what the future of e-grocery fulfillment will look like? – RetailWire
- A New Era of Fulfillment: Introducing Walmart’s Next Generation Fulfillment Centers – Walmart
- Will automated fulfillment centers deliver big results for Walmart? – RetailWire
DISCUSSION QUESTIONS: What will Walmart’s acquisition of Alert Innovation mean for its last mile fulfillment? How does the retailer’s use of automation in the supply chain match up against rivals including Amazon, Albertsons, Kroger and Target?