Walmart opens new fulfillment center
LANCASTER, Texas — Walmart is making a big promise to its e-commerce shoppers with a huge facility about 15 miles south of Dallas.
The retailer on Tuesday opened the three-level, 1.5-million-square-foot automated fulfillment center in Lancaster that’s been under construction for two years. It’s a fulfillment center Walmart can brag about after watching Amazon for years get all the accolades about how it’s using robots and technology to become the everything store.
Why should Walmart’s customers care?
“We’re going to get them their stuff faster,” said Josh Lamping, general manager of the fulfillment center at 2500 E. Belt Line Road in Lancaster. The facility can process twice the numbers of orders of Walmart’s other fulfillment centers and “ship hundreds of thousands of orders a day.”
It’s one of five being built in the U.S. Together with Walmart’s traditional delivery network that includes its 4,700 stores, Walmart said it will be able to get packages to customers the next day and in two-days to 95% of the United States.
Walmart has been building up its capabilities to compete more directly with Amazon. which dominates U.S. online shopping with an estimated 40% market share vs. Walmart’s 7%. While Walmart is ahead in online grocery shopping, it has lagged behind Amazon in online share of general merchandise sales.
The Lancaster facility is also designed to receive and ship third-party sellers’ goods, which is an advantage Amazon has used to expand its selection and create a new lucrative source of revenue for itself.
Walmart is paying some of its highest hourly wages in North Texas, with workers at the facility averaging $23 an hour.
The retailer has hired about 500 of the 1,000 full-time workers it expects to employ at the facility by the 2024 Christmas season, Lamping said. About half of those hired so far transferred in from other Walmart jobs including stores, he said.
Walmart also promised to create a better warehouse environment. The automated processes have cut the “touches of product” from 12 to five, Lamping said.
The building is designed with shorter distances to one of six breakrooms and to the parking lot. All the storage of merchandise is along the back side of the horizontal building, and purchases are fetched by an automated system. People work along the front of the building. Platforms at packing stations allow workers to adjust their height. Shipping boxes arrive to packers that are the perfect size for the items heading to the customer.
There’s no bubble wrap anywhere in the building.
The facility houses and ships millions of items that can fit in one of the totes that zoom around to fetch and deliver merchandise to packers. Think items the size of toys and small kitchen appliances or smaller, Lamping said. “No riding lawnmowers or refrigerators.”
Walmart’s other fulfillment centers had 18 sizes of boxes, which sounds like enough, but it wasn’t, Lamping said. “We’ve reduced packaging materials by 60%.”
The new facility has machines that make a custom cardboard box when the shopper places an order. Sheets of cardboard go in one end, and the finished box comes out the other. The open box continues on to meet up with its contents at a packing station. Then it moves on to be inspected by another person before the box travels along the belt to be taped and labeled by yet another machine. The sealed box goes down a chute to be loaded onto a truck and off to a shipper.
John David Rainey, Walmart’s chief financial officer, told analysts in August that the new automated distribution and fulfillment centers “are achieving efficiencies of 30% higher per hour than non-automated buildings.”