Walmart is building four high-tech fulfillment centers that will make picking and packing online orders easier and faster. The first will open this summer in Joliet, Illinois.
Walmart is building high-tech warehouses in hopes of delivering goods to customers faster and growing its online business.
On Friday, the retailer said it plans to build four new fulfillment centers that will use automation to Pack and ship online orders more efficiently: The first branch opened in Illinois this summer. For customers, the new warehouses will mean next day or two-day delivery could be more common for items like cereal and T-shirts.
The plans come as Walmart competes with online retail giant Amazon, which has made it easier for Prime members to order a wide range of items and have them delivered within a day or so. In recent years, most of Walmart’s sales have come from its website., he already has 31 facilities that are preparing online orders. More than 3,500 of its stores, or about 75% of its outlets, also carry out online orders.
But at Walmart’s existing fulfillment centers, employees can walk nine miles or more a day to remove items from shelves and haul them back to packaging locations, said Michael Prince, Walmart’s vice president of supply chain innovation and automation.
This will not be necessary in new warehouses, where an automated system will retrieve goods from an expanded storage facility and deliver them to an area where an employee packs them in a box that will be custom-made according to the dimensions of the order. Walmart tested the concept at a fulfillment center in Pedricktown, New Jersey.
Amazon, Kroger, and others have also used automation to increase throughput and speed. Ten years ago, Amazon acquired Kiva Systems, which built wheeled robots for its warehouses. It has tested robots to reduce drudgery for workers and launched a $1 billion fund in April to invest in supply chain technology companies.
Last year, Kroger began opening giant robotic fulfillment centers in the US through a partnership with UK-based online retailer Ocado.
Walmart’s first new fulfillment center will open in Joliet, Illinois, about 40 miles southwest of Chicago, delivering orders to customers in Illinois, Indiana and Wisconsin. Three more will follow in McCordsville, Indiana; Lancaster, Texas; and Greencastle, Pennsylvania, in the next three years, the company said.
Walmart said it would hire 4,000 people to work at the new facilities. Current starting wages at existing warehouses are between $16 and $28 an hour, the company said, and wages at new warehouses will be above that range. The retailer refused to share the construction costs.
Walmart stores will continue to play a role in the company’s supply chain and handle online orders for popular items, as well as chilled and frozen foods, Prince said. Fulfillment centers will process orders with a wider range of products, including pantry staples and other groceries.
Other parts of the Walmart supply chain are also undergoing changes. Dozens of stores are becoming mini-automated warehouses for online grocery orders. And last week, Walmart said it would add robotics to its 42 regional distribution centers that fill store shelves in the coming years.