Think about it this way. Let’s say there are 10 place settings on a dinner table with plates, silverware and glasses, and it’s time to clean up. If one plate is grabbed at a time, it will take 10 trips to set them all in the sink.
But, if you stack the plates, cups and silverware, it only takes a couple of trips. This simple effort to consolidate makes cleaning Sunday dinner much easier.
That’s essentially what consolidation centers do in Walmart’s supply chain: They take multiple orders and consolidate them to make the process more efficient for distribution centers across the country.
How Technology Creates Simplicity
Walmart has consolidation centers today, but the process is manual. Right now, merchandise suppliers create and ship 42 separate orders through the same consolidation center that then forwards the orders on to each of the 42 regional distribution centers where they are officially received and counted. This makes reacting to order inaccuracies a challenge, because associates may not discover them until the orders are planned to be at the store.
If Walmart ordered toothpaste, and the request was accidentally fulfilled with mouthwash, associates won’t know until the product reaches the regional distribution centers. This means a customer looking for specific toothpaste brands or flavors will experience out of stocks for several shopping trips.
The new system enables suppliers to fill one massive order instead of 42. New software automatically scans and counts the product immediately when it arrives and documents the information in our systems, so Walmart will be able to react faster to order-filling issues.
Now, let’s go back to the 42 separate orders. Suppliers are doing all the work to sort, separate and keep track of all these orders. Most of the time, they ship the orders as soon as they are ready, which can result in trucks that are not full delivering products. This additional work adds shipping cost to the products. It also means additional trucks on the road, resulting in more carbon emissions and traffic. The technology at Colton solves these problems and creates savings we can pass on to the customer in the form of lower prices.
Responding at the Speed of Retail
Automating the receiving upstream in the consolidation center allows supply chain teams to group products based on how they are stocked, making unloading simpler. “We’re going to make the regional distribution centers more efficient,” said Geno Bell, senior director of the consolidation center network.