Will automated fulfillment centers deliver big results for Walmart?
Walmart is counting on four high-tech fulfillment centers (FCs) to further drive its same-day and next-day delivery ambitions.
Walmart will open the FCs over the next three years in Joliet, IL; McCordsville, IN; Lancaster, TX; and Greencastle, PA. Combined, they’ll employ over 4,000 employees, including control technicians, quality audit analysts and flow managers.
“These FCs will be the first of their kind for Walmart, using the powerful combination of people, robotics and machine learning to set an entirely new precedent for us on the speed of fulfillment while continuing to create a positive work environment for our associates,” wrote David Guggina, SVP of Innovation and Automation, Walmart U.S. in a blog entry.
Walmart currently makes use of 31 dedicated e-commerce warehouses and 4,700 stores to fulfill its online orders.
The high-tech 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 product.
Mr. Guggina stated, “We’ve been perfecting this system in our fulfillment center in Pedricktown, New Jersey, and have seen how the benefits of this technology are wide-ranging and include: more comfort for associates, double the storage capacity and double the number of customer orders we’re able to fulfill in a day.”
Among the predicted time benefits:
- The four FCs alone will provide 75 percent of the U.S. population with next- or two-day shipping on millions of items, including Marketplace items;
- Combined with traditional FCs, Walmart will reach 95 percent of the U.S. population with next- or two-day shipping;
- Tapping store inventory, Walmart promises to offer same-day delivery to 80 percent of the U.S. population.
Only four mega-FCs are planned. Mr. Guggina wrote, “Our priority is to strategically locate our FCs to pair most effectively with its stores and 210 distribution centers.”
The highly-automated FCs are seen as an answer to Amazon’s logistics powerhouse, although Target, Best Buy, Macy’s and Lowe’s are among those talking up the benefits of in-store fulfillment.
- A New Era of Fulfillment: Introducing Walmart’s Next Generation Fulfillment Centers – Walmart
- Walmart to open high-tech fulfillment centers to ship online orders faster – CNBC
- Walmart kicks fulfillment into high gear with next-generation centers – Freight Waves
- Robots and drones and Walmart’s supply chain, oh my – RetailWire
- Are stores the answer to last-mile delivery? – RetailWire
DISCUSSION QUESTIONS: Will automated warehouses ultimately be more important to same-day and next-day delivery than in-store fulfillment? How will Walmart’s four mega-warehouses stack up to the supply chain systems of such rivals as Amazon and Kroger?