Walmart Plans Continued Automation of Supply Chain
At its 2023 Investment Community meeting, retail giant Walmart detailed its continued investment in an automated supply chain.
Walmart said that by the end of Fiscal Year 2026, it estimates that roughly 65% of stores will be serviced by automation, approximately 55% of the fulfillment center volume will move through automated facilities and unit cost averages could improve by approximately 20%.
“We are in a unique position to serve our customers and members however they want to shop, which will fuel continued growth,” said Doug McMillon, Walmart president and CEO. “As we grow, we will improve our operating margin through productivity advancements and our category and business mix, and drive returns through operating margin expansion and capital prioritization.”
On Tuesday, Walmart showcased its supply chain innovation Tuesday at its Brooksville, Fla., regional distribution center, as an example of its scaled system of supply chain capabilities that utilize a combination of data, software and robotics. The retailer said that the automated supply chain allows distribution centers to provide a more consistent, predictable and higher quality delivery service to stores and customers and react faster to customer demand.
The retailer also indicated that over time, the company anticipates increased productivity per person due to the automation, with higher pay for employees likely. Walmart could also potentially increase the number of associates as the supply chain continues to grow.
“It all starts with our associates,” McMillon said. “We are a people-led, tech-powered omnichannel retailer. As it relates to being people-led, it’s about purpose, values, culture, opportunity and belonging. We serve our associates by creating opportunities. Opportunities that turn jobs into careers. We help bring dignity to work by enabling them to see how they’re serving others, as part of a team, and helping them achieve their potential. And as we serve them, they serve our customers and members well…they make the difference.”
At the meeting, Walmart also affirmed its FY24 guidance and commitment to a financial framework of 4% sales growth and 4%+ operating income growth over the next three to five years.