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Walmart to Open First High-Tech Consolidation Center, Making Supply Chain More Efficient

Walmart Stores will open a high-tech consolidation center in Colton, Calif., this July that’s expected to add greater efficiency to its supply chain.

The new-construction 340,000-square-foot consolidation center will be the first in Walmart’s supply chain to receive, sort and ship freight. Using automated technology, the center will be able to handle three times more volume than current facilities and help the company “deliver the right product to the right store, so customers can find the products they need,” Walmart said Monday.

This company-owned center will employ 150 full-time associates initially and grow to employ more than 600 associates by 2021.

“With the combined might of people and world-class logistic technology, this facility will be the most efficient consolidation center in Walmart’s supply chain,” Walmart said.

In October, Walmart announced that it had broken ground on a tech-enabled perishable grocery distribution center in Shafter, Calif., as it looks to upgrade this end of its operations.

Consolidation centers have a specialized role in moving products quickly through the distribution cycle at Walmart. The centers receive less than a truckload, known in the industry as LTL, of general merchandise items from suppliers, then consolidate quantities of this freight in a full truckload (TL) and ship it to regional distribution centers. This allows Walmart’s 42 regional centers to focus on distributing products to stores.

Walmart has consolidation centers that currently process merchandise manually, with merchandise suppliers shipping 42 separate orders through the same consolidation center and then forwarding them to each of the regional distribution centers, where they are received and counted. This, Walmart said, leads to a challenge in order accuracy.

The new system will allow suppliers to fill one massive order instead of 42, while new software will automatically scan and count the product when it arrives and document the information in Walmart’s systems, giving the retailer the ability to react faster to order-filling issues.

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“We’re going to make the regional distribution centers more efficient,” said Geno Bell, senior director of the Consolidation Center Network.

The new center will also be a warehouse, which means Walmart can react better to unexpected events, like sudden changes in weather, because having products separated and stored further upstream allows the company’s supply chain partners to react more quickly to get the right products to the proper locations.

“With this new technology, we can be surgical and responsive in getting merchandise into stores,” Bell said.