Walmart Meets Holiday Demand With Pop-Up E-Commerce Fulfillment Centers

Walmart is dedicating space in 42 of its regional distribution centers (RDCs) to add “pop-up e-commerce distribution centers” (eDCs) to meet the expected spike in e-commerce orders this holiday season, as well as unexpected peaks in the future.

Walmart’s RDCs normally ship pallets of goods to Walmart stores, rather than sending online orders directly to customer homes. The pop-up move is allowing Walmart to adapt to increased demand without constructing and investing in new facilities. 

“Working closely with our technology team, who developed new and enhanced some of our existing supply chain systems, we’ve been able to increase our fulfillment throughput,” Greg Smith, EVP, Supply Chain, Walmart U.S., said in a blog post. “This means facilities that have traditionally only supplied products to stores are now equipped to also fulfill online orders, just in time for the holidays.”

Srini Venkatesan, EVP at Walmart Global Tech, explained on LinkedIn that Walmart’s multi-channel sourcing engine (MCSE) scans the entirety of its fulfillment network in less than a second and will assign orders to these 42 eDCs if it determines they offer the fastest and most efficient option to fulfill the order.  

“The technology we’ve developed is allowing Walmart to leverage more of our current warehouse space to meet customer demand,” Venkatesan said. “We anticipate up to 30% of our holiday volume being shipped from our pop-up eDCs. After the holiday, EDC’s will have the flexibility to scale up and down, and the lessons learned will be applied as we continue to further evolve our network in the future.”

Venkatesan noted in the post some of the tech enhancements that helped make this possible. In addition to having a single cloud-based integration platform managing multiple third-party fulfillment solutions, he said the following were needed:

• Implementing random stow for both sortable and non-sortable items

• Improving pick times to avoid congestion in aisles with frequently purchased products

• Warehouse management app compatibility on BYOD

• Enhanced visibility into entire fulfillment operations to meet promised delivery dates

Smith noted that standing up the eDCs inside the RDCs is allowing Walmart to increase fulfillment speed “without the delay of building new facilities” and will provide the retailer flexibility to meet unexpected peaks in demand 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,” Smith said.