Supply: Innovation in the supply chain is the key to better customer service

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According to David Guggina, senior vice president of innovation and automation at Walmart US, Walmart, a leader in supply chain innovation with more than four decades of experience on its main competitor Amazon, is always challenged to meet consumer demand.

He said Walmart continues to innovate within its supply chain and transportation segments and in-store operations.

“We are reshaping the work of our associates [employees] such as in our next-generation distribution centers that use technology to increase efficiency, reduce friction and enable faster delivery times to stores,” said Guggina during a presentation at the Plug & Play event. Expo held in Bentonville on April 26th.

He said Walmart is working toward a fully automated supply chain that includes robotics and scanners in warehouses to handle repetitive tasks such as palletizing shipments to stores and accurately counting incoming and outgoing inventory.

Guggina said Walmart also uses Mobius, an in-house built technological innovation. Mobius is a digital supply chain clone that allows Walmart to simulate the movement of goods at every stage of the journey. He said Walmart could test technology applications with the digital clone without disrupting the supply chain. He said it was a great tool to help Walmart better deploy its capital toward supply chain efficiency.

Guggina said the smart pallets enable faster restocking of shelves, which helps with shelf availability, which has been challenged amid the long pandemic. An example of this, in some cases, is bolt-on technology like robotic arms that quickly unload trailers and load packages onto conveyors where high-resolution scanners track inventory sent downstream. The sophisticated pallet system is fully loaded by robots that stack boxes by aisle and shelf for more accessible ventilation when the store receives it.

He said the results of many ongoing innovations in the supply chain are designed to better serve customers. Grocery store distribution centers are also highly automated with robotics and technology that can withstand low cold chain temperatures. Automation enables faster delivery times to stores, increasing the window of freshness. Guggina also spoke of a partnership with Platform Science that resulted in new transparency and connectivity tools for its 12,000 truck drivers. The technology application helps drivers plan and communicate on the road.

“We’re solving incredibly important problems, and we can’t solve them alone,” Guggina said.

Jake Fields, co-founder of San Diego-based tech/fleet management startup Platform Science, said his path crossed with Walmart three years ago. He chose to stop at a Plug & Play event held at the Crystal Bridges Museum of American Art in the spring of 2019. Plug & Play is a Silicon Valley-based venture capital firm, with an office in Bentonville that focuses on funding and accelerating startups in supply chain, sustainability and healthcare. Fields said he attended another event in Alabama the day before and stopped in Bentonville to present at Plug & Play in 2019.

He talked about his technology that connects truckers to their home bases, delivery routes, weather and other relevant information, then left the building and headed to the airport. Before arriving at the airport, his phone rang. A representative from Plug and Play was on the other end of the line and told him that Walmart wanted a meeting to discuss the technology further.

“I turned around and met Joe Metzger, supply chain manager at Walmart, who was in the room and heard my pitch,” Fields said. “He said Walmart was researching this technology with its fleet of drivers. The company had started working on the technology application and Platform Science could help them complete it quickly.

Fields said Platform Science has already signed with trucking company Schneider National to use the technology that gives drivers first-hand visibility into what their day looks like. Scott Donahue, vice president of innovation and automation at Walmart US, said the retailer wanted to give drivers a better experience. Greater visibility was needed on the location of approximately 12,000 truckers at any one time. An important need was to let stores know what time to expect delivery from their truck each day to schedule staff accordingly.

Donahue said Walmart started the app but needed help rolling it out to its vast network. He said that by working with Fields, Walmart was able to deploy his app on Platform Science’s infrastructure.

“Because it was a small, scrappy startup, they allowed us to customize and work with them on the project. We had direct access to the CEO, and they were able to respond quickly when needed,” Donahue said.

Walmart rolled out the technology to its 12,000 private truckers and 65 locations simultaneously as part of the pilot last year. The benefits were exponential, as he said the Net Promoter Score (satisfaction rating) among drivers rose from 20 to 95 once the technology was fully rolled out. He said the driver experience has improved and stores now know precisely when their truck will arrive so they can schedule staff. This ensures that fresh produce quickly flows from the rear door to the shelf.

The technology partnership with Platform Science has been so successful that Walmart is now extending it with every load moved for the retailer – 50,000 shipments per day through various partner carriers. Donahue said the partnership with Platform Science continues to grow and that Walmart can also benefit from future lessons learned and best practices shared by partners.

According to the company’s latest earnings report, the bulk of Walmart’s capital expenditure is related to supply chain innovations, about $17 billion this year, focusing on automation and initiatives and technologies in contact with customers.

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