Dive Brief:
- Walmart on Thursday celebrated the grand opening of a new 2.2 million-square-foot fulfillment center in McCordsville, Indiana, near Indianapolis. The company said in an announcement that the high-tech facility is its “largest fulfillment center to date, and will enable the retailer to fulfill more orders, more quickly.”
- The company declined to say how much it cost to develop and open the new facility in response to an inquiry from Retail Dive.
- Walmart said in an earlier announcement that four new high-tech fulfillment centers will supplement 31 e-commerce fulfillment centers and 4,700 stores that the company currently uses to fulfill online orders.
Dive Insight:
Walmart appears to be refocusing its warehouse and fulfillment center workforce.
The new Indiana location is part of a plan Walmart announced last year to open four fulfillment centers over the next three years. Walmart said the new fulfillment centers combine people, robotics and machine learning to set a new threshold for fulfillment speeds. As a result of opening the next-generation fulfillment centers, the company expects to hire people in new tech-focused jobs positions like control technicians, quality audit analysts and flow managers.
Together, Walmart said the new fulfillment centers will enable the company to reach 95% of the U.S. population with next-day or two-day shipping.
“The McCordsville grand opening marks a major milestone in our supply chain modernization journey,” Karisa Sprague, Walmart U.S.’s senior vice president of fulfillment network operations, said in a statement. “With more customers shopping online, we’re leveraging state-of-the-art technology to increase speed of delivery all while creating tech empowered career opportunities for our associates.”
Here’s how the new five-step fulfillment process works, according to the company:
First, associates unload merchandise in cases from trucks at the fulfillment center and place the cases on a conveyor belt where they’re routed to receiving. Next, a receiving associate breaks the case apart and places the individual items into a tote. The tote is added to a large automated storage system, which shuttles the tote to a designated location. The company said the storage system can account for every square inch of floor-to-ceiling inventory storage.
When a customer places an online order, the system automatically retrieves the items and transports them to an associate at a picking station. “This is a huge win for our associates, who traditionally 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,” Walmart said.
After that, a custom box is created to fit the order’s exact measurements. Walmart says it expects associates can assemble up to four orders simultaneously and send packages to shipping less than 30 minutes after a customer’s order. Finally, the completed order is automatically sealed, labeled and routed to a designated zone for delivery to its final destination.
The new center will employ about 1,000 people in McCordsville. According to Geoffrey Appleby, the McCordsville fulfillment center’s general manager, about half of the associates at the McCordsville center previously worked at Walmart’s Plainfield, Indiana, distribution center.
A fire destroyed the 1.2 million square foot building last spring. Over a year later, the cause of the fire remains under investigation, according to a local news report. No one was seriously hurt, but Walmart is seeking millions of dollars in damages from the city and local officials.
Statewide, Walmart said it has 43,000 employees in Indiana, 127 retail locations, and it expects to spend $1.1 billion with Indiana-based suppliers in fiscal year 2023. Walmart Fulfillment Services, the company’s third-party fulfillment service, will also use the space to fulfill Marketplace items.
Earlier this year, Walmart laid off thousands of distribution center, warehouse and fulfillment center workers in several rounds of cuts affecting facilities in multiple states.
