Walmart Opens the Second of Its Next-Generation Fulfillment Centers

For an eye to where fulfillment, logistics, and e-commerce are going, look at the newly opened Walmart high-tech fulfillment center in McCordsville, Indiana.

It’s the second of four planned such facilities the company is building out over the next three years. The new approach uses “an automated, high-density storage system that streamlines a manual, twelve-step process into just five steps.” The first opened in Jolliet, Illinois.

The five steps are as follows:

1. Unload merchandise into cases that go onto a conveyor belt that routes them to receiving.
2. Receivers break the cases down to individual items that go into totes which the system then automatically moves to one of millions of locations in custom-built floor-to-ceiling structure.
3. Picking involves totes with items being automatically retrieved on receipt of an order and sent to someone at a picking station rather than having personnel walking up to nine miles a day.
4. In the packing process, custom boxes fit the exact size of an order, saving on materials. Packages can be ready for shipment 30 minutes after a customer completes an order.
5. Orders are automatically taped, labeled, and sent to the appropriate area to be shipped.

Currently, 31 dedicated e-commerce fulfillment canters and 4,700 stores in the U.S. within 10 miles of 90% of the U.S. population fill online orders, including third-party sales through the company’s marketplace when Walmart handles the shipping. When finished, the new four centers alone could provide one- or two-day shipping to three-quarters of the U.S. population.

“Combined with our traditional FCs, we can reach 95% of the U.S. population with next- or two-day shipping, and by making use of the expansive reach of our stores, we can offer same-day delivery to 80% of the U.S. population,” the company said earlier this month. The new centers will employ a planned total of 4,000 people, including “new tech-focused jobs like control technicians, quality audit analysts and flow managers.”

The McCordsville facility is the largest to-date. The company currently employs 43,000 in Indiana and will spend an estimated $1.1 billion with local suppliers.

Earlier this month, Joseph McKeska, an Oak Brook, IL-based principal at advisory firm A&G Real Estate Partners, told GlobeSt.com that brick-and-mortar retailers typically need to invest heavily in technology and automation to improve supply chain efficiencies in a growing omnichannel environment.

“The largest opportunities are in improving efficiencies in online ordering and in-store pick-up, given that most existing store layouts were not designed for click-and-collect or direct shipping of online orders,” he said.

Such facilities typically have to be built for these types of applications, as they require “heavily reinforced floors, a cross-docked floor plan, high-bay ceilings, air conditioning, as well as heavy power and fire protection capacity,” as Rob Gemerchak, director at Stan Johnson Company, previously told GlobeSt.com.