Recent Growth in Distribution and Fulfillment Centers Spotlights Utah’s Role in America’s Supply Chain

In December, Walmart announced that it had chosen Salt Lake City to be the location for one of its newest fulfillment centers. Scheduled to begin operations this summer, the over one-million square foot facility will employ about 450 full-time employees who will be responsible for packing and shipping items directly to customers. Located west of the airport, the fulfillment warehouse joins Walmart’s three distribution centers already in Utah, where millions of products are stored before moving on to replenish stock at the company’s stores throughout our area.

Fulfillment centers, in which items are received, stored, and shipped directly to customers, are critical components of e-commerce, and there is no question that the rise of online sales is the factor behind the proliferation of these types of facilities. In announcing its Salt Lake City fulfillment center, Walmart said that the new building was specifically designed to “support our growing e-commerce fulfillment network.” By the word “growing,” the company was referring to an astounding 87% increase in its online retail sales, just in the past two years. 

Distribution centers, on the other hand, are places in which items are received and stowed before moving on to other areas or to local stores. They are a way to minimize some of the supply chain uncertainties, as they allow companies to move their goods out of crowded ports and closer to their final destinations. Think of grocery stores and their need to restock shelves quickly with products that are nearby. Distribution centers can also be temporary holding places, where items are stored until they are ready to be trucked to other locations.

A number of national corporations have recently expanded their distribution and fulfillment services in Utah. These businesses are doing so not just because our population has increased, but also because our state offers them a strategic stopping place for their goods. In a 2019 statement, then Governor Gary Herbert invoked a term that was coined when the first Transcontinental Railroad was completed in Promontory, Utah over 150 years ago—the “Crossroads of the West.” Today, trains have largely been replaced by semi-trucks, but, as Governor Herbert pointed out, Utah is still an important site for the successful distribution of products. 

He is not the only one who feels this way. In a visit last November, Federal Maritime Commissioner Carl Bentzel noted that Utah is well-positioned to play a critical role in the nation’s supply chain, acting as a sort of way station as goods move east from West Coast ports.  

We couldn’t agree more. Since 1916, our goal at Industrial Supply Company has been to help our customers in the construction, manufacturing, mining, government, and industrial communities get the items they need to be successful. Being headquartered in a state through which so many goods pass has definitely helped us achieve this objective.

Though we certainly have not relied solely on our location. Throughout the years, Industrial Supply has been careful to assess changing conditions and take advantage of new tools that allow us to better serve our customers. In the past decade, this has often meant using technology to better manage customer inventory, predict future stock needs, and provide individualized online procurement options. 

By taking care of the back-end—such as implementing an effective ERP (Enterprise Resource Planning) system, adding rich online product information to our e-commerce site Directools.com, curating an ever-expanding number of items available online, customizing online selections for specific client needs, and creating detailed procurement reports—our customers can quickly and easily get the items they need. It’s no wonder that, like other businesses, we’ve seen growth in the number of online traffic and sales.

This, in turn, has led to an increase in the amount of warehouse space we’ve needed for our distribution and fulfillment services. By housing items close to the worksites where they are used, and by having the space to store, package, and ship the more than 100,000 products listed on Directools.com, we are able to ensure that our clients have a consistent supply of inventory. 

Industrial Supply is grateful to have such a long history in the “Crossroads of the West.” We look forward to many more years here, in which we will continue to evaluate and refine our practices to ensure that our supply chain services address changing needs.

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