High-tech DC streamlines supply chain

DSN Retailing Today, May 9, 2005 by Mike Troy

Wal-Mart's efforts to improve in-stock were advanced last month with the addition of substantial new distribution capacity as facilities in Arcadia, Fla., and Bartlesville, Okla., were brought online.

The two distribution centers are Wal-Mart's third and fourth facilities in the United States that feature increased use of mechanization equipment, much of which is found in the multilevel frozen area. As Wal-Mart evp of logistics and supply chain, Rollin Ford, explained during a tour of the 865,000-square-foot Arcadia facility, "We took the freezer, the harshest environment our people work in where temperatures are a constant 20 below zero, and mechanized it."

Automated cranes, a total of 17 in the frozen and deli and dairy areas, store and retrieve pallets of merchandise. There are also six vertical lifts that are each capable of transporting more than 85 pallets per hour and 12 automated stretch wrap machines that can wrap 80 pallets per hour so merchandise is secure when it is shipped to stores.

"This facility is mechanized, not automated," Ford noted. "We still do some manual picking because we want the flexibility to customize that you can't get with full automation." Beyond the mechanization aspects of the new facility, the Arcadia location is Wal-Mart's first distribution center to open fully ready to participate in a supply chain program initiated several years ago that will be rolled out across the United States by 2007.

"Network Remix is turning our distribution center network into a velocity-based network from a category-based network with the bottom line of the program being to enhance the receiving process at stores," Ford said.

The program fits with Wal-Mart's strategy of simplifying store operations by altering processes upstream in the supply chain even though doing so can add complexity to distribution center operations or require processes to be revisited.

"If we are able to do that successfully we win every time," Ford said, "because the goal is to give stores the merchandise on a silver platter--or silver pallet in this case."

What makes Arcadia special to the Network Remix program is a long row of warehouse racks located in the nearly 500,000-square-foot dry warehouse area where pallets of the highest-velocity items are stored four deep in a unique gravity-fed rack configuration. Ford called the area the "super highway," due to a wider-than-normal aisle that was created to accommodate a high level of forklift traffic.

"The top-moving SKUs in our stores served by the distribution center would be profiled and stored in this area," Ford said.

Those high-velocity items are then grouped together on the same truck so when they arrive at a store they are unloaded and taken immediately to the sales floor in a process expected to take only 30 minutes.