Walmart Harnesses Technology to Transforms its Supply Chain

In a bold move to revolutionise its supply chain, Walmart has unveiled an ambitious plan for its Grocery Network Transformation.
This initiative comes at a crucial time when the global food industry is grappling with unprecedented challenges, from climate-induced disruptions to geopolitical tensions affecting distribution networks.
As the food sector tackles these issues alongside labour shortages, transportation disruptions and increasing demand for fresh, high-quality produce, the ability to quickly scale up capacity and incorporate new technologies into existing facilities is critical.
Worldwide, consumers desire for options from the food industry to live well and save money is growing and Walmart among many companies is taking steps to meet these demands by utilising data and technology.
Amazon has been expanding its fresh food delivery capabilities, while technology firms like Ocado, have been partnering with traditional retailers to provide advanced fulfilment solutions.
Walmart's strategy focuses on modernisation and automation and aims to address consumer demands, whilst enhancing efficiency and creating a more connected supply chain.
Walmart’s approach to improving its supply chain
Walmart's multifaceted approach addresses the evolving needs of consumers while tackling the complex challenges facing the global food sector.
The transformation can be distilled into three distinct yet interconnected approaches:
New builds: high-tech distribution centres
Walmart is constructing five cutting-edge perishables distribution centres (DCs) as part of its supply chain modernisation.
The first DC is located in Shafter, California.
These purpose-built facilities incorporate advanced automation and data-driven systems, significantly enhancing storage and processing capabilities.
Compared to traditional DCs, they can store twice the number of cases and more than double the processing volume.
This transformation is crucial for meeting growing demand for fresh produce and perishable goods, particularly as online shopping and delivery services continue to expand.
Expansions: enhancing existing infrastructure
Expanding and upgrading its existing network of distribution centres allows Walmart to leverage its current infrastructure while significantly boosting capacity and incorporating new technologies.
As well as building new perishables DCs, Walmart is also upgrading four existing ones, each of which will see the addition of over 500,000 square feet of automation.
These expansions are designed to increase capacity for fresh products, a category that has seen significant growth in recent years.
By incorporating automation into these existing facilities, Walmart aims to enhance efficiency, reduce handling times and improve the overall quality of perishable goods delivered to stores and customers.
Retrofits: modernising legacy infrastructure
The retrofit strategy is particularly important as it allows Walmart to modernise its entire network without the need to build entirely new facilities in every location.
Retrofitting existing facilities presents unique challenges, including working around ongoing operations and adapting new technologies to fit within existing structures.
However, it also offers significant advantages. It allows Walmart to leverage its extensive existing real estate portfolio, potentially reducing costs and accelerating the overall pace of modernisation.
The learnings from the Winter Haven retrofit, the Florida perishable distribution centre, will be invaluable as Walmart considers how to upgrade its broader network of distribution centres.
How Walmart is utilising technology to transform its supply chain
As the largest grocery retailer in the US, Walmart is leveraging artificial intelligence and machine learning to optimise inventory management, predict demand and streamline operations.
The company has modernised its ambient and fulfilment networks through strategic technology partnerships. Collaborating with Symbotic, an AI-driven automated warehouse systems provider, has enhanced Walmart's supply chain automation.
The retailer has also partnered with Knapp, a specialist in automated storage systems, to integrate machine learning and robotics alongside human workers.
These technological advancements have yielded significant benefits. For instance, at Walmart's Pedricktown, New Jersey fulfilment centre, the new system has doubled both storage capacity and daily order fulfilment capabilities.
This use of technology allows Walmart to make more informed decisions about stock levels, reduce waste and respond more quickly to changes in consumer behaviour.
It also ensures incoming cases from farmers and suppliers are quality-checked and de-palletised, then cases are stored in an 80-foot tall automated system in a temperature-controlled environment.
For store orders, cases are retrieved to build department-specific pallets, then these pallets are intelligently layered, with fragile items on top, then wrapped pallets are loaded onto trucks for shipping.
Also noteworthy, is the use of robotics and automation in the new and upgraded DCs, as these technologies not only increase efficiency but also improve working conditions for employees.
This technological transformation is set to create approximately 2,000 new jobs and significantly boost Walmart's capacity to meet growing consumer demands.
Walmart President and CEO, Doug McMillon says: “The implementation of our automated storage and retrieval systems and our DCs and FCs is on track,
“And we’re as enthusiastic about the impact of that work as we’ve ever been.”
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