As an avid Walmart shopper and retail industry analyst, I‘ve always been fascinated by the logistical feat that is Walmart‘s supply chain. With over 11,500 stores worldwide and a booming e-commerce business, Walmart has built one of the most advanced and efficient distribution networks in the world. But have you ever stopped to wonder where your Walmart.com orders actually come from? How does a company of this scale manage to get products from suppliers to stores and customers so quickly and cost-effectively?
In this comprehensive guide, we‘ll take a deep dive into Walmart‘s distribution operations in the U.S., exploring the key facilities, transportation modes, and technologies that keep its supply chain running like a well-oiled machine. Plus, I‘ll share some insider tips and little-known facts about how Walmart fulfills customer orders and offer my take on how its logistics strategy stacks up against the competition. Get ready to geek out over all things supply chain!
The Backbone of Walmart‘s Supply Chain: Its U.S. Distribution Network
To truly understand Walmart‘s distribution capabilities, we first need to look at the immense scale of its operations. In the U.S. alone, Walmart operates over 150 distribution centers totaling more than 120 million square feet – that‘s the equivalent of over 2,000 football fields![^1] These facilities are staffed by 87,000 associates who keep inventory flowing 24/7.[^2]
Walmart‘s U.S. distribution network includes several types of specialized facilities:[^1]
| Type of Facility | Number of Locations | Description |
|---|---|---|
| Regional Distribution Centers | 42 | Handle dry groceries, general merchandise, and other consumable goods |
| Grocery Distribution Centers | 43 | Focus on perishable items like produce, meat, dairy, and frozen foods |
| Import Distribution Centers | 42 | Receive and process imported goods from suppliers around the world |
| Specialty Distribution Centers | 7 | Handle specific categories like tires, optical, prescription drugs, and wine and spirits |
| E-commerce Fulfillment Centers | 31 | Dedicated to picking, packing, and shipping online orders from Walmart.com |
As you can see, Walmart has built a highly specialized network designed to efficiently handle the unique storage and handling requirements of different product categories. This allows Walmart to optimize every step of the distribution process, from receiving to inventory management to shipping.
One of the most impressive aspects of Walmart‘s distribution network is its ability to replenish store inventory incredibly quickly. On average, a Walmart store in the U.S. receives deliveries from a distribution center every 24 hours.[^3] This allows Walmart to keep shelves stocked while minimizing the amount of inventory held in store back rooms. In fact, Walmart has optimized its replenishment process so precisely that stores now hold just 30 hours‘ worth of inventory at any given time.[^4]
But Walmart‘s logistics capabilities aren‘t just about speed – they‘re also about cost efficiency. By consolidating shipments and maximizing truck capacity, Walmart is able to keep transportation costs down. The company estimates that its supply chain initiatives save $1 billion per year.[^4] These savings are passed on to customers in the form of Walmart‘s signature "everyday low prices."
The E-commerce Side of the Equation
In recent years, Walmart has invested heavily in its e-commerce fulfillment capabilities to keep pace with changing consumer expectations and compete with the likes of Amazon. Walmart‘s U.S. e-commerce sales grew a staggering 79% in fiscal 2021, reaching $64 billion.[^5] To support this growth, Walmart has built out a network of 31 dedicated e-commerce fulfillment centers (FCs) strategically located across the country.
Here‘s a look at where Walmart‘s e-commerce FCs are located:[^6]
- Atlanta, GA
- Bethlehem, PA
- Chino, CA
- Davenport, FL
- Dinuba, CA
- Fort Worth, TX
- Fulton, NY
- Grantsville, UT
- Haines City, FL
- Hayward, CA
- Houston, TX
- Joliet, IL
- Keasbey, NJ
- Lakeland, FL
- Lewiston, ME
- Lockbourne, OH
- Los Angeles, CA
- Mira Loma, CA
- Ocala, FL
- Olney, IL
- Plainfield, IN
- Rialto, CA
- Riverside, CA
- Sacramento, CA
- Shelbyville, IN
- Shenandoah, VA
- Shepherdsville, KY
- Sparks, NV
- Tomah, WI
- Washington Court House, OH
By strategically placing FCs near major metro areas, Walmart is able to reach 99% of the U.S. population with 2-day shipping on millions of items.[^7] In some markets, Walmart even offers same-day delivery on qualifying orders.
But Walmart‘s e-commerce supply chain isn‘t just about giant fulfillment centers filled with conveyors and robots (although those are certainly important). Increasingly, Walmart is leveraging its vast network of stores to fulfill online orders more quickly and cost-effectively.
One key way Walmart does this is through its ship-from-store program. Instead of sending all e-commerce orders to a dedicated FC, Walmart uses sophisticated algorithms to determine which facilities (including nearby stores) have the ordered items in stock and can fulfill the order most efficiently based on the customer‘s location. Approximately 30% of Walmart.com orders are now fulfilled by stores.[^8]
Ship-from-store allows Walmart to turn its stores into "mini-fulfillment centers" and get orders to customers faster by reducing the distance packages need to travel. It also helps Walmart optimize inventory allocation and avoid costly markdowns by selling through store inventory more quickly.
The Last Mile: Getting Packages to Customers‘ Doors
Of course, getting an order picked and packed is only half the battle in e-commerce logistics. The "last mile" of delivery – getting the package from a fulfillment center or store to the customer‘s doorstep – is notoriously complex and costly. In fact, last mile delivery comprises 53% of total shipping costs on average.[^9]
To tackle this challenge, Walmart has built out a diversified last mile delivery network that includes both in-house assets and partnerships with third-party carriers and crowdsourced delivery platforms.
Walmart‘s private fleet is a major advantage when it comes to controlling costs and ensuring timely deliveries. The company‘s 6,500 tractors, 55,000 trailers, and 9,000 drivers cover 700 million miles per year.[^1] By operating its own trucks, Walmart is able to optimize routes, reduce empty miles, and eliminate accessorial fees charged by outside carriers.
For smaller packages, Walmart partners with major carriers like FedEx, UPS, and USPS for cost-effective residential delivery. Regional carriers and crowdsourced platforms like Roadie and DoorDash provide additional last mile capacity in select markets, particularly for urgent same-day and express deliveries.
Walmart is also innovating to make last mile delivery more convenient and eco-friendly. In 2021, the company launched its InHome delivery service, which allows customers to have their orders delivered directly into their fridge or garage where available.[^10] Walmart has also been experimenting with drones to make deliveries in as little as 30 minutes for customers in several states.[^11]
Looking to the future, Walmart has bold ambitions to continue expanding its last mile capabilities. The company plans to have InHome available to 30 million U.S. households by the end of 2022 and drone delivery accessible to 4 million households.[^11] As Walmart builds out these cutting-edge fulfillment options, it will be able to offer customers even more choice and convenience when it comes to receiving their orders.
The Bottom Line
As a self-proclaimed supply chain geek, I have to say I‘m consistently impressed by the scale, efficiency, and innovation of Walmart‘s distribution operations. With its unparalleled network of stores, distribution centers, and transportation assets, Walmart is able to offer customers a wide range of fast and flexible fulfillment options at the company‘s signature low prices.
But Walmart isn‘t resting on its laurels – far from it. With major investments in automation, artificial intelligence, electric vehicles, and other emerging technologies, Walmart is positioning itself to meet the evolving needs of shoppers in an increasingly e-commerce-driven retail landscape.
While Walmart may not have the same name recognition as Amazon or other tech giants when it comes to supply chain capabilities, I would argue that it is one of the most underrated logistics leaders in the game today. And with its aggressive plans for expanding same-day and two-day shipping, drone delivery, and other bleeding-edge fulfillment options, Walmart is poised to give Amazon a run for its money in the race to get orders to customers faster and more efficiently.
The next time you place an order on Walmart.com or grab a gallon of milk at your neighborhood supercenter, I encourage you to take a moment to appreciate the incredible behind-the-scenes operation that makes it all possible. With one of the world‘s most advanced and innovative supply chains working around the clock to serve customers, Walmart isn‘t just a place to shop – it‘s a force to be reckoned with in the world of logistics.
[^1]: Walmart – Supply Chain[^2]: MWPVL International – The Walmart Distribution Center Network in the United States
[^3]: Walmart – Our Business
[^4]: Reuters – "Walmart Touts $1 Billion Supply Chain Savings Goal"
[^5]: CNBC – "Walmart Shares Rise on Strong Grocery Sales, E-commerce Growth"
[^6]: Walmart – Walmart U.S. Ecommerce Fulfillment Centers
[^7]: Statista – "Number of Walmart‘s In the United States as of 2022, by Type"
[^8]: Business Insider – "Walmart Now Using Stores to Fulfill up to 30% of Online Orders"
[^9]: Business Insider – "Last Mile Delivery Costs Account for 53% of Total Shipping Costs"
[^10]: Walmart – "Walmart InHome Delivery: Get Your First Month Free"
[^11]: CNBC – "Inside Walmart‘s Plans to Bring Drone Delivery to 4 Million Households This Year"
