Walmart is expanding its supply chain capabilities and opening a second consolidation center in Lebanon, Pa.
The 400,000 square-foot facility, which is slated to open this month, will use automated technology to help move product three-times faster to get items to stores more quickly. This “consolidation” center will employ abut 1,000 people and will cater to Walmart’s 42 regional distribution centers across the U.S. Eventually, the goal is to have this outpost service fulfillment centers as well.
The first of these centers opened in Colton, Calif. in 2019.
“We’ve made continued investments in our people, facilities and technology to ensure we have the right product, in the right place, at the right time,” said Mike Gray, SVP of supply chain operations at Walmart. “As part of these investments, the Lebanon facility will provide even more opportunities for small to medium sized suppliers who do not ship nationwide, the ability to provide product to all 4,700 Walmart stores.”
The announcement marks Walmart’s latest investment in its supply chain. In July, the company signed a deal with Canoo to purchase 4,500 electric delivery vehicles to sustainably support Walmart’s last-mile delivery efforts for its online orders. In April, Walmart announced new pay raises for its truck drivers and a “Private Fleet Development Program” to train new associates. According to Walmart, truck drivers can make up to $110,000 in their first year with the company, with the chance to earn even more over time. And in November, Walmart announced a goal to hire 20,000 associates for supply chain roles. Walmart said that the average wage for supply chain associates is $20.37 per hour.
Walmart also plans to renovate its 42 regional distribution centers with automated technology this year.
Target also recently announced that it would roll out three new sortation centers throughout the next year to help power delivery across the country. Building on the company’s existing six sortation centers across the U.S. The centers allow Target to pack and sort items for local deliveries helps the company move merchandise more efficiently to fulfill more orders.
Walmart recently announced it would lay off some employees after it slashed its outlook for Q2. A softening in consumer spending, especially in discretionary categories like apparel, has impacted financial results at the retailer, though the company said it was “further investing” in certain sectors, such as supply chain.
“Walmart is creating the future of supply chain — a modern system that pairs the latest in software and automation technologies, with a highly trained and specialized workforce of Walmart associates — to disrupt the industry as we know it,” said David Guggina, SVP of innovation & automation at Walmart U.S. “It’s an exciting time to join our second high tech consolidation center in Lebanon. At this facility, we’re implementing the technologies Walmart will continue to roll out throughout our supply chain network.”
Walmart is set to report results for the second quarter on Aug. 16.