Chewy’s automated fulfillment centers combined with an “improved supply chain tool” helped the company handle its highest order period during the holiday peak in late November, Chewy CEO Sumit Singh said in a Dec. 4 earnings call.
“The team is executing very well and the automation that's been referenced here is a big contributor to that, both in terms of output as well as efficiency and productivity,” CFO David Reeder said in the call.
Currently, less than half of Chewy's volumes moving through its distribution centers are handled using automation, the CEO said. The e-tailer plans to continue automating its network and eventually hopes to have more than 70% of its volumes fulfilled using automated processes.
It is unclear what the mentioned supply chain tool is, and Chewy did not respond to a request for comment by the time of publication.
“And if you look at just the [fulfillment center] itself, we have said it drives improvement to the tune of up to 50% in productivity, 30% in volume per square foot, and up to 60% improvements in ergonomics and safety. And those results are pretty true even now,” Singh said.
Chewy began to automate some of it fulfillment centers to reduce operational costs and improve the cycle time between an order submission and a box landing on a truck, according to former VP of operations Mike Gilbert.
The CEO said in the call that the pet e-tailer currently has six fulfillment centers that are automated, including in locations such as Tennessee, Nevada, Missouri and Pennsylvania.
Correction: A previous version of this story had an incorrect image caption. The caption has been updated to note the image shows a Chewy fulfillment center.
