Walmart has opened its fifth next-generation fulfillment center, a 900,000-plus-square-foot facility in Stockton, California, that will employ more than 1,000 people. Its automated storage system brings products to workers and cuts the fulfillment process from 12 steps to five. Walmart developed the system with Knapp, a fulfillment technology firm.
The other four centers are in Joliet, Illinois; McCordsville, Indiana; Greencastle, Pennsylvania; and Lancaster, Texas, per FreightWaves. The Stockton facility will take pressure off Walmart’s other fulfillment centers and help the company reach 95% of the US population with next- or two-day shipping, alongside its wider network. It will also handle orders for third-party sellers through Walmart Fulfillment Services.
Walmart is also upgrading older warehouses to handle more automated operations. About 80% of its automation construction projects involve retrofitting buildings from the 1980s and 1990s, the Wall Street Journal reported. The company is reworking these facilities without shutting them down. “We are kind of in this peak complexity,” said Rob Montgomery, head of supply chain operations for Walmart US.
The changes bring new operating challenges. Walmart found its old shipping boxes were too large for the automated systems and is switching to boxes 1½ inches shorter that must be taped shut. Monthly electricity bills at its automated grocery warehouses can reach $800,000 or more during peak periods, compared with about $250,000 when they relied more on manual operations, according to a person familiar with the situation.
By August, more than 50% of Walmart’s e-commerce inventory was moving through automated systems, below its 55% target for January. A sixth next-gen center, in Carnesville, Georgia, is expected to begin construction late this year.
