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Walmart Takes on Amazon With 4 State-of-the-Art Fulfillment Centers

Amazon might have too much industrial real estate on its hands but rival Walmart is investing in new tech-first fulfillment centers to close the speed gap in retail’s delivery wars.

On Friday, the Bentonville, Ark. retailer announced plans for four new fulfillment centers that it says will enable next- and two-day shipping on “millions of items” including third-party Marketplace products for three-quarters of U.S. households. The “strategically” located facilities in Illinois, Indiana, Texas and Pennsylvania will create 4,000 jobs with many “tech-focused” roles, David Guggina, Walmart’s senior vice president, automation, and innovation, wrote in a corporate blog post, describing positions such as quality audit analysts, control technicians and flow managers.

Key to the new fulfillment centers will be Knapp technology automating myriad aspects of managing orders and what Walmart says is a patent-pending five-step process of unloading, receiving, picking, packing and shipping customer purchases.

The four new centers “will transform the way we ship online orders to customers” while improving workers’ on-the-job experience by leveraging technology to relieve some of their physical burden, Guggina wrote. The facilities’ automated storage system doubles not only storage capacity but the volume of orders they can process daily, he added.

A 1.1-million-square-foot fulfillment center in Chicago-area Joliet, Ill. is the first facility slated to open this summer with an eye to creating 1,000 jobs. Indiana’s 2.2-million-square-foot facility is on deck for a spring 2023 debut after a previous facility in the state burned down, while a 1.5-million-square-foot Pennsylvania location is set to come online in 2024 serving Mid-Atlantic customers in Pennsylvania, Maryland, Delaware and New Jersey. A facility of the same size will rise in Lancaster, Texas, in the fall of 2023.

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“We continue to modernize our supply chain network and prepare for growth in our digital business, and this new facility will play an integral role in helping us serve even more customers and Walmart+ members with access to fast shipping on millions of items,” Karisa Sprague, Walmart’s senior vice president for supply chain e-commerce fulfillment, said in a statement.

Walmart’s Pedricktown, N.J. fulfillment center has already piloted the new picking and packing process.

The company’s new and 210 existing distribution facilities will enable the retailer to “reach 95 percent of the U.S. population with next- or two-day shipping,” and adding in its extensive 4,700-store network means “we can offer same-day delivery to 80 percent of the U.S. population,” Guggina wrote.

What’s more, Walmart is also retrofitting its regional DCs to further modernize its supply chain.

Walmart last month reported softer-than-expected first quarter earnings due to higher cost pressures and a miss on its merchandise assortment. And the discounter is now upping its investment in tech to improve it supply chain capabilities at a time when its competitor Inc. reported a first quarter loss of $3.8 billion.

Walmart has poured considerable funds into supply chain investments in recent years. It just expanded a drone delivery program and is piloting driverless trucks in its home state. It’s also working with a robotic supply chain company to automate warehouse operations.