Oct 07, 2022
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Walmart’s strategy for owning the last mile has come into clearer focus with newsAlert Innovation, a robotics automation specialist has been acquired by the retailer.
The two companies first began working together in 2016 on ways to customize robotic technology for deployment in Walmart’s market fulfillment centers (MFCs). Walmart began Testing Alert Innovation’s Alphabot system in late 2019 at an MFC built into the back of a supercenter in Salem, NH.
The system uses autonomous carts for online orders of frozen, refrigerated or shelf-stable products. To ensure accuracy, associates check each order and bag the products for delivery to customers. Walmart associates continue to select fresh foods.
According to the manufacturer, this is a distinctive feature of the system. David Guggina, Walmart U.S. senior vice president for innovation and automation, says that the bots move “horizontally, laterally and vertically across three temperature zones without any lifts or conveyors. This provides fewer space constraints inside the MFC and eliminates the need to pause the entire system for bot maintenance.”
Walmart continues to place more emphasis on local fulfillment to ensure customers receive their orders faster and at a lower price. This is especially important for the chain which makes most of its revenue from margin-challenged categories like grocery.
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Mr. Guggina writes about scaling the technology in a company blogWalmart will further strengthen its local operations by acquiring this company. The chain operates 4,700 stores within 10 mile radius of 90 percent of the U.S. populace.
Walmart will continue to expand its technology investments in its regional distribution centres and next-generation fulfillment center (FCs). The retailer made this announcement earlier in the year. announcedIt would open four FCs in Joliet (IL); McCordsville (IN); Lancaster, TX; Greencastle, PA; and Lancaster, TX over the next three year.
The FCs are automated, high-density storage units that simplify a manual process of twelve steps into five robotics-driven steps: Receive, Unload, Pick, Pack, and Ship. Warehouse workers need to wait for the tote to pick up the ordered item, rather than walking up to nine blocks each day to find it.
These next-generation facilities are capable to deliver one- and two-day shipping to 75 % of the population. Walmart will be able provide the same shipping times to 95 per cent of the population when it opens its next-generation facilities. 31 dedicated ecommerce warehouses were added.
DISCUSSION QUESTIONS: What will Walmart’s acquisition of Alert Innovation mean for its last mile fulfillment? How does the retailer’s use of automation in the supply chain match up against rivals including Amazon, Albertsons, Kroger and Target?
“Walmart’s investment will help to protect its grocery leadership and keep up with rivals’ innovations.”
“It is Walmart’s heritage to wring costs out of the distribution system.”
“Walmart’s acquisition of Alert Innovation will accelerate the retailer’s dominance in grocery delivery.”