Walmart is investing in distribution center technology to optimize product packaging, save store space, and potentially address some of the long-term labor costs and uncertainties, as it regulate its supply chain during the ongoing COVID-19 pandemic.
The retailer said it is working with robotics company Symbotic to deploy the new automation technology at dozens of regional distribution centers. Joe Metzger, executive vice president of supply chain operations at Walmart US, wrote in a company post this month.
“As well as saving time, limiting stockouts, and speeding up loading and unloading, we will also have the opportunity to train associates on how to use new equipment, create new skills and standards. equipment for future work,” he wrote. “And because technology reduces the need for our associates to handle goods, it eliminates one of the most difficult aspects of the job. supply chain work is material handling.”
The move comes at a time of heightened awareness about working conditions at retail warehouses, the challenges of implementing social distancing in these workplaces and the difficulty of hiring workers. relatively low-wage roles. Such technology investments highlight a number of ways retailers may be looking to address what they see as costs and vulnerabilities in their distribution systems, experts say.
“You want to take a lot of manual labor out of the equation,” says Stanley Lim, assistant professor of supply chain management at the University of San Diego Business School.
“One of the problems is that when individuals are unable to go to work due to limitations or other reasons, such a reduction in employment creates problems with their ability to continue to provide those products and services through across the supply chain,” he said. “If you can take that uncertainty out of the equation, or at least run with a lower workforce, you can go ahead and deliver high-storage-rate products to consumers.” use.”
The move reflects Walmart’s continued investments to strengthen its e-commerce business and efforts to stem the inventory shortages the company experienced in the early months of the pandemic. Last time customers shopped in abundance.
These investments in warehouse automation and even in the more experimental field of automated delivery vehicles that Walmart Stores Inc. has ventured in recent years, also reflecting a broader shift among retailers towards developing so-called smart logistics, supply chain experts said.
“Walmart has always been at the forefront of supply chain and logistics, [and] I’m not surprised that Walmart is investing heavily in technology,” said Shiliang Cui, an associate professor of operations and information management at Georgetown University’s business school.
“This is really a trend that a lot of [retail] he said.
The pandemic has led to widely reported disruptions at ports and created trucking shortages, generally highlighting the vulnerabilities of global supply chains. While investing in distribution facilities won’t necessarily address those broader pressure points, experts say it still helps retailers trying to complete the critical and often costly period. of the chain: last mile delivery to bring the product to the consumer.
The pandemic has also accelerated the pace of digitization that retailers like Walmart have invested in even in the years before it began, said Lim of the University of San Diego School of Business.
“A lot of technology around omnichannel retail – it’s the ability to provide services across multiple channels on and off the network and to facilitate a variety of distribution options – those are things that have been on the agenda of omnichannel retailers for the past three to five years,” he said.
Walmart’s investments also reflect the retailer’s long-term thinking on an issue that is often not immediately seen by consumers and is often felt only during times of inventory shortages and empty shelves. , experts said.
“I think what’s interesting about supply chains is that if you look at the investment that Walmart is making in its automation, that’s great, but what’s really interesting is that retailers always have to think, that’s not what the customer actually sees.” Lauren Beitelspacher, associate professor in the marketing department at Babson University. “Nobody ever goes to a retail store, or has a favorite retailer, because of its complicated supply chain.
“[But] when you have less inventory, you can build more relationships and more trust based on consistency with customers,” she added. “Also, an efficient supply chain reduces costs.”
https://wwd.com/business-news/retail/walmart-automate-warehouses-amid-focus-on-global-supply-weak-points-1234884962/ | Walmart automates warehouses amid focus on global supply weakness – WWD