Using consolidation centers, items from vendors whose purchase orders (POs) are smaller than what would fill an entire truck are consolidated with other similar shipments so that half-empty trucks aren’t showing up at stores. “We believe this investment is going to really set Walmart apart by being able to create a national purchase order for 4,600 stores where we can buy and flow inventory more efficiently than anybody else. The center will be the first to leverage best-in-class inventory management and automated inventory receiving and sortation,” said a Walmart exec.
The goal of the consolidation centers is to get items to Walmart store shelves as quickly as possible. Walmart also sees its consolidation centers as a better way to get the right inventory to the right stores. Walmart now has 10 of them, only not like this special one. They receive less-than-truckload freight shipments for all manner of products making their way to the retail stores and essentially collate freight into truckload shipments of products. From there, Walmart shipments go on to 42 regional distribution centers and the U.S. stores. What’s changing is that the new California consolidation center automates sorting, which allows it to process 3 times more freight volume than an equivalent manually-run facility. Further, order inaccuracies won’t be able to get as far downstream.
Classroom discussion centers:
- Explain the advantages of consolidation centers.
- What are the downsides?