Walmart plans pop-up distribution centers to meet holiday demand
Walmart’s holiday preparation includes creating “pop-up e-commerce distribution centers” to fulfill home delivery orders.
The discount behemoth is taking space in 42 of its existing regional distribution centers (RDCs) across the U.S. and creating pop-up e-commerce distribution centers, or eDCs, to meet its growing demand for delivery of online orders directly to customers. Walmart expects to ship up to 30% of its holiday volume from these pop-up eDCs. Chief Walmart rival Amazon has reportedly been using fabric tents to create temporary delivery stations to support last-mile delivery of packages during demand surges since April 2019.
Traditionally, RDCs ship pallets of goods to Walmart stores, following different procedures than those used to send packages directly to customer homes. Working with its technology team, Walmart developed new and enhanced some of existing supply chain systems. A multi-channel sourcing engine (MCSE) scans the entirety of the company’s fulfillment network in less than a second and will assign orders to eDCs when it determines they offer the fastest and most efficient option to fulfill an online order.
"This is a direct shot across the bow to Amazon," commented Meyar Sheik, president and chief commerce officer, Kibo. "The move from Walmart further levels the playing field against Amazon’s distribution and logistics advantage as it pertains to expedited shipping options such as one-day or same-day delivery."
Other supply chain technology enhancements Walmart has enacted in preparation for the holidays include implementing random stow for both sortable and non-sortable items, improving pick times to avoid congestion in aisles with frequently purchased products, ensuring warehouse management app compatibility on employees’ personal devices, rolling out a single, cloud-based integration platform to manage multiple third-party fulfillment solutions, and increasing visibility into its entire fulfillment operations to meet promised delivery dates.
After the holiday, Walmart’s eDCs will have the flexibility to scale up and down, and the company says it will apply lessons learned to further evolve the supply chain network in the future.
“The flexibility to pop-up an eDC anytime our supply chain network experiences peak demand allows us to deliver for our customers when they need us the most, all the while consistently following the health and safety measures we have had in place for months,” said Greg Smith, executive VP, supply chain, Walmart U.S., in a corporate blog post “Whether our customers are shopping in stores or online for pickup or delivery, we are committed to serving our customers safely and delivering a great holiday season.”