Walmart is ramping up its investment in supply chain automation with an expanded commercial partnership with Symbotic, pledging at least $6 billion to deploy modern technology in 25 regional distribution centers across the U.S.

"This deal is another major step in the retailer’s efforts to modernize its distribution network, improve operational efficiency and speed the movement of goods from warehouses to customers, according to a news release Thursday."

The deployment will focus on improving the management of upstream inventory for e-commerce operations, boosting storage capacity and making product replenishment faster and more efficient. The multi-year commitment will span multiple facilities and could grow beyond the initial rollout, with both companies identifying other opportunities across Walmart’s international supply chain network.

“Our strategy is really around giving customers and members access to a wider assortment of products and also reducing delivery and fulfillment times,” said Rob Montgomery, Walmart’s executive vise president of U.S. supply chain operations.

He said investments in physical infrastructure and digital supply chain capabilities are necessary to support customers no matter how they choose to shop, whether that’s traditional stores, curbside pickup or home delivery.

More dedication to automated material handing

Under the expanded agreement, Walmart will purchase automated material handling systems from Symbotic for ambient temperature areas in distribution and fulfillment centers. The rollout will take place in the United States and select international markets in the Americas.

The partnership also includes another $125 million commitment for research and development. This investment will help us to roll out new racking technologies, and enhance our picking operations, process flows and inventory management capabilities.”

Symbotic has a portfolio of technologies intended to improve warehouse productivity and ease the movement of goods. Its BreakPack solution supports distribution of less than case quantities, allowing retailers to handle more flexible order volumes.

Another offering, SymMicro, uses autonomous mobile robots to fetch products to fulfilll an order. The technology aims to accelerate picking operations and better utilize available space.

In August, Symbotic’s Chairman and CEO Rick Cohen said the company started installing a SymMicro system in the backroom of a Walmart store, demonstrating how the partnership could bring automation to places beyond traditional distribution centers.

A partnership that is moving beyond its original remit

The broadening deal for Cohen is a result of the development of a relationship that started more than a decade ago with one product. Symbotic now offers Walmart a broader, end-to-end automation solution that is designed to scale with the retailer’s long-term supply chain growth.

The deal also aligns with Walmart’s broader capital investment strategy, which is increasingly centered on technology, robotics and infrastructure improvements to better serve customers.

John Furner, president and chief executive of Walmart, said in February the retailer’s capital spending related to its supply chain was likely to be at its peak over the next two years, demonstrating the scale of the transformation under way.

Regional distribution centers remain a key investment area

Walmart is investing heavily to upgrade its regional distribution footprint. One example is a regional distribution center project in Louisiana in which the retailer is investing more than $330 million.

Robotics and automation technologies are being installed to enhance shipping capacity and improve distribution performance.

Taken together, these moves reflect Walmart’s commitment to increased automation and responsiveness in its supply chain. The retailer is investing in large-scale infrastructure and integrating Symbotic’s robotics and material handling systems to improve inventory availability, speed up fulfillment and meet growing demand across its stores and e-commerce operations.