The Hindu Business Line : Wal-Mart's distribution juggernaut

Traversing the country roads of Bentonville, Arkansas, where the world’s largest retailer, Wal-Mart, is headquartered, and its adjoining towns such as Fayetteville and Rogers in mid-western US can be pleasant as well as irksome. Pleasant, as al l around to see, for much of the time, are bucolic scenes of cows grazing in vast expanses of green fields, clouds idling above and time pretty much standing still.

Irksome, because that pleasing scene can be quickly shattered by the rumble of huge trailer trucks with Wal-Mart emblazoned on them, passing you by. Those would be only some of several hundred that criss-cross those roads ferrying goods from Wal-Mart’s distribution centre to its Supercentres, Sam’s Club stores and the smaller neighbourhood markets. This is supposed to be the heartland of rural America but to an Indian visitor it’s as urbanised as they come with scores of automobiles: sedans, pick-ups and SUVs, all sometimes caught in endless miles of traffic jams.

We, an Indian media team, visit Distribution Centre 6094 (DC) in Bentonville. Encircled by green fields the DC from afar looks like an enormous shed. Indeed it is: Set over 200 acres, the warehouse building itself encompasses 1.2 million sq ft or 27.5 acres under the roof, which itself is at a height of 41 feet at the centre! Jabo Floyd, General Manager of the DC, throws more numbers to numb you: approximately 10 large Wal-Mart retail stores will fit inside this DC or 24 football fields, 800 tennis courts or seven major league baseball fields!

The DCs are the nerve centre of the famed Wal-Mart distribution system where suppliers feed hundreds of brands and products, which are then sorted and dispatched – that’s to put it simplistically!

The DC we are at, Floyd explains, distributes general merchandise and some non-perishable food items to 118 Wal-Mart Supercentres, discount stores and neighbourhood market stores in a four-state area: Arkansas, Missouri, Oklahoma and Texas. The average distance to its stores is 130 miles. Large-volume stores, he elaborates, receive daily deliveries, in some cases multiple truckloads of goods, while smaller stores may receive deliveries three times a week.

Now, a fit-looking Kelvin Dedner, Assistant General Manager of the DC, takes over to escort us on a tour of the centre. We enter a cavernous hall, reverberating to the clackity-clack of miles of conveyor belts hurtling about at great speed – at approximately six miles an hour, we are informed — far above our heads. The other end of the hall is barely visible; we figure out that one had better be fit if you need to walk these halls every day. There are 19.5 miles of conveyor belts, requiring 1,000 drive motor units — more numbers to stun you! The conveyor system processes and sorts 12,500 to 15,000 cases an hour. Busy associates, as Wal-Mart employees are called, most clothed in shorts and t-shirts, careen around in fork-lifts hauling huge pallets of goods – a large wooden platform on which goods are stacked and fork-lifted.

Dedner waves cheerily to all, stopping by now and then to pick up litter and dump in either of three-four different bins. Sorting out plastics and papers, he says, and all part of Wal-Mart’s sustainability drive.

As Dedner explains, everything is online today and every store’s inventory is plugged into the DC’s, which runs 24/7. The minute a store hooked on to a particular DC sells 75 per cent of a brand or product, the system immediately generates an order on the DC for replenishment. Some large brand owners, say a Pepsi or a Coke, would service each store directly, keeping track of inventory themselves rather than route it through a DC because of the quick and high offtake.

Goods arriving in the receiving area of the DC from suppliers have Wal-Mart’s own barcodes applied. Then the items are sent up through the sorting system via one of those conveyer belts zipping overhead. During this process, multiple conveyor lanes are condensed into four lanes — barcodes are read as they pass through high-speed barcode readers. Once the barcodes are read, the automated system directs the items to the appropriate loading dock door (each Supercentre has a dedicated loading dock door), where they are loaded onto a large truck and sent to the store. Even re-direction is a sight to watch – as the conveyor belt zips by, through the slats, what can be best described as hands, keep pushing cartons meant for different stores down respective chutes downward, right up to the loading docks.

A typical load is 1,300 cases. Orders are received from stores every night, filled next day and delivered based upon custom delivery schedules. There are two general types of merchandise stored in the DC: staple stock, which Wal-Mart sells daily , and that is seasonal, promotional or low-volume items.

On a typical day DC 6094 unloads 175-225 trailers and loads and ships 150-200 trailers — this amounts to receiving and shipping 4.5 lakh to 5.5 lakh cases daily.

Bentonville's DC is only one of 122 such that it operates in the US while internationally Wal-Mart has 101 DCs across Central America, Canada, China, Japan, Mexico and the UK. So, next time you buy a brand at Wal-Mart you will know where it is coming from.

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