Walmart discusses Dallas-Fort Worth strategy

In minus-15 temperatures, Dave Guggina, executive vice president of supply chain operations for Walmart U.S, tours the 80-foot tall freezer chamber of Walmart's perishable grocery distribution center in Lancaster, Texas. The large bins are being filled with frozen pizza and ice cream by robots for store delivery. (Tom Fox/The Dallas Morning News/TNS)
In minus-15 temperatures, Dave Guggina, executive vice president of supply chain operations for Walmart U.S, tours the 80-foot tall freezer chamber of Walmart's perishable grocery distribution center in Lancaster, Texas. The large bins are being filled with frozen pizza and ice cream by robots for store delivery. (Tom Fox/The Dallas Morning News/TNS)


LANCASTER, Texas -- Walmart says it has figured out its future supply chain configuration and planted all the pieces in Dallas-Fort Worth.

The largest U.S. retailer has reinvented how it stocks stores and ships online orders and the Dallas metroplex is the first market where all the capabilities of its newly transforming supply chain are in one geographic location.

Dallas-Fort Worth made sense "for us to bring all of the future in one place at one time," said Dave Guggina, executive vice president of supply chain for Walmart U.S. "Dallas is a pretty special place for us. It's really a unique place in the country."

Walmart's strategy team broke the U.S. into pixels, he said, that allowed them to look at demand in new and different ways across the country -- where Walmart says it has a store within 10 miles of 90% of the population.

"What we found with Dallas is just unique in that you've got urban locations, you've got rural locations, you got a broad socioeconomic base," he said. "So this is the location where we have deployed every piece of new hardware and software."

Dallas-Fort Worth is also Walmart's largest market with 156 Walmart and Sam's Club stores and it is where it competes with national and regional competitors that also count Dallas-Fort Worth as key to their businesses.

The last big piece of the new supply chain is a 740,000-square-foot distribution center in Lancaster that will supply stores with perishable groceries kept in refrigerated units cooled as low as minus-15 degrees. It's been under construction since late 2021.

Other next-generation logistics include:

Retrofitting Walmart's 1.2 million-square-foot distribution center, built in Sanger in 2001, with new automated hardware and software. It supplies stores with general merchandise and food that doesn't have to be kept at extreme temperatures.

A third large facility that opened last year on E. Belt Line Road in Lancaster. The automated three-story structure is 1.5 million square feet and can process twice as many orders as Walmart's other fulfillment centers. It ships hundreds of thousands of orders a day. It also ships multiple orders to stores that can act as local sorting centers.

Walmart technology staff worked with Witron, a German logistics systems company, to create its new systems that use both robotic and artificial intelligence technology.

The grocery distribution center, located on the southwest corner of East Pleasant Run and Cornell Roads, is now sending frozen foods from pizza to ice cream to stores.

It will be supplying all 156 local stores with perishable foods including meat, dairy and produce by summer. The facility is also supplying 14 total stores in Arkansas, Louisiana and Oklahoma.

The mainstays of a grocery warehouse -- wooden pallets and forklifts -- are still there, but the pallets are loaded by robots in the order that food boxes are unloaded in each store aisle. The autonomous forklifts are supervised and maintained by people hired and trained into new warehouse job descriptions such as automated equipment operators and automation data specialists.

About 99% of the inventory that flows through the warehouse is handled by automated systems that about 500 workers oversee, Guggina said.

The grocery distribution center can hold 2.5 million cases of goods or double what a legacy warehouse can hold. It also processes two times what a traditional facility can handle in 24 hours.

It has a frozen chamber set at minus 15 degrees and fresh areas at 34 degrees. The facility has redundant electric generation. In the future, the land Walmart purchased in Lancaster could hold a large solar energy field.

Customers will see food delivered to stores with greater accuracy, Guggina said. Items arrive undamaged, fresher and on time, resulting in fewer empty shelves.

"We're able to operate at a lower cost and reinvest back into customer experience, back into price and back into our associated experiences," Guggina said. "We're reshaping work for our associates."

Way before there was Amazon, Walmart was always held up as the supply chain leader in retailing when founder Sam Walton realized he could lower prices by bringing in-house distribution to stores. He started building regional distribution centers for goods that didn't require temperature control.

Walmart moved on to perishable distribution centers once it entered the grocery business. It has the largest perishable distribution network in the country. It was also among the first retailers to build its own trucking network.

For Walmart, Dallas-Fort Worth has long been a place to try new things -- from learning the grocery business in the late 1980s to opening big suburban supercenters in the 1990s and 2000s to offering curbside online grocery shopping here first in 2015.

The two new Lancaster facilities still need workers but fewer than large traditional warehouses. The new grocery facility has 500 workers and the online fulfillment center expects to have 1,000 employees by this holiday season.


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