JCPenney is investing $40 million into implementing a new sorting system at its Reno, Nev. distribution center to increase order fulfillment speed for online shoppers.
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The upgrade at the 1.67-million-square-foot distribution center is part of the retailer’s self-funded $1 billion reinvestment strategy through the 2025 fiscal year, as the department store seeks to win back customers.
The centerpiece of the upgrade is the implementation of the Joey Pouch sorting system, a state-of-the-art, computerized induction, sorting and packing system that enables warehouse employees to put products into a pouch before they get transported via a conveyor belt elsewhere in the facility.
The system includes new induction process technologies, a fully automated sorter built to assemble orders and a new packing system that includes invoice and shipping label printing for each order in the station.
Users of the platform only need to remove the items from the pouches and pack them. The Joey Pouch system itself could also alternatively be integrated with automatic packing machines.
Material handling solutions provider and integrator SDI deployed the Joey Pouch system within the Reno warehouse. Each pouch can hold items weighing up to 22 pounds, suitable for items including shoes, apparel, accessories and parcels/packages. The system can support 10,500 articles of clothing/footwear per hour, according to the integrator.
SDI touts other benefits that JCPenney can gain from the system. Pouches can be automatically sorted and re-sorted using software algorithms, supporting both individually packaged products and products with bar codes.
Additionally, the technology can be used in multi-level applications, which can improve space utilization within a warehouse.
Ultimately, the changes on the back end are designed to improve the customer experience. The retailer expects the sorting technology to ensure online orders are completed with higher accuracy and shipped out more quickly.
JCPenney currently operates a supply chain network of 11 facilities, which includes store merchandise distribution centers, regional warehouses, dedicated e-commerce fulfillment centers and furniture distribution centers. But the retailer hasn’t indicated if or where else the Joey Pouch system will be deployed.
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“The Joey Pouch system deployed in our Reno Distribution Logistics Center showcases an updated technology and we’re proud to bring this state-of-the-art machinery to our facilities,” said JCPenney CEO Marc Rosen in a statement. “We look forward to experiencing its impact for our customers, associates and company as we honor our commitment to making every day count for our customers.”
In addition to improving the customer experience, JCPenney says the technology implementation will “dramatically” reduce associate training time, which can lead to more productivity and allow for more flexibility in staffing across the facility.
While automation often drives concerns that human labor will be phased out, JCPenney said the implementation will have “no impact to existing roles,” stating that the distribution center employs “hundreds” of jobs. JCPenney should be able to save some money with the investment though, with SDI saying the system dramatically reduces labor costs associated with manual sortation and order assembly.
“When we announced our $1 billion reinvestment strategy last year, this is exactly the type of upgrade we envisioned for our supply chain,” Rosen said. “This new system will provide JCPenney with the best-in-class equipment and technologies to better support our associates and serve our customers.”
The update comes as retail giants like Walmart and Target continue to beef up their supply chain operations with automation across their distribution centers. Target is investing $100 million in its plans to expand its number of sortation centers to 16, opening its first one just four years ago in 2020.
These facilities have succeeded in getting orders to online shoppers quicker, with Target saying the average click-to-deliver time in markets with sortation centers are nearly 1.5 days shorter than the network average.
Walmart’s emphasis on individual sortation centers may not be as high as Target’s, but the company has been pushing a full-court press on warehouse automation with the construction of four “high-tech” fulfillment centers over the past two years.
JCPenney’s decision to follow suit on automation comes as the company hopes to revive a brand that saw years of sales losses, which led to the firm’s Chapter 11 bankruptcy in 2020. Investments in the company now co-owned by mall owners Simon Property Group and Brookfield Asset Management will also be allocated to improving operations at its 650 stores, implementing a new inventory management system and upgrading its website and mobile app.
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