 Unfortunately, we didn't get walk-up music. That's what we're missing, walk-on music. So this is the first of five sessions. So we're going to talk about automation of everything. What's exciting here is that automation is probably one of the most overused words besides AI, because it means anything to everyone, and so hopefully we'll provide some clarity for that. So I enjoy, hope you guys will ask a lot of questions in Slido. We're going to start off though with a lead-off talk by Mohan Akela. He is the SVP of fulfillment platform at Walmart. He's leading the Centroid Project. He's been there for over 10 years. His full bio is in your program. Please join me in welcoming Mohan. Good morning. So let me just start by introducing myself. I'll hopefully bust some of the automation myths that we may have through the course of this presentation. I'm Mohan Akela. As Chris pointed out, I lead this organization called Walmart Centroid. Which is an omnichannel supply chain strategy and transformation organization that is responsible for the design of the end-to-end network that supports the 4,600 stores and millions of customers around the country. I have 20 years of experience in supply chain strategy, product management, data science. I've run operations as well in the past. So really passionate about this space and I'm really excited actually to be here and have some time to share with you. Prior to that, I was at a few companies. I was with Apple in the reverse logistics supply chain. Before that, I was with Deloitte consulting again in supply chain strategy. So living and breathing supply chain all my life. But based in India working all over the world. I do have a master's in PhD in operations research. So data science, left to talk optimization algorithms. Once we're done with this presentation, and I live in the Bay Area family with three kids. That's my stress buster. All right. So let's just get into the discussion. I think I left my clicker over here. Thank you. Run through this. So before I usually start any presentation, I'd like to ground myself as well as the audience on the vision and mission that Walmart is all about. The fundamental underpinning of our existence. And I always bring this quote from Sam Walton, our founder. And you can read this, right? If we work together, we'll lower the cost of living for everyone. We'll give the world an opportunity to see what it is like to save money and live a better life. It's so powerful and it is core to everything that we do. All the transformation that you hear in the news is all about providing everyday low price and so that our customers and families in America can save money and have better lives. And one of the things that I'd want to spend a little bit of time on is walk you through some of the evolution of our business, of our supply chain, and how transformation, innovation, and automation kind of are underlying this whole evolution that we've had over the last, call it, four, five decades. When we started off, customers came to us to shop general merchandise items and consumable items, dry consumables. So we build this network called Ambient Distribution Centers, the ability to order fill cases and distribute to stores and using our fleet of transportation. As the stores grew, this network grew. And so now we have roughly around 42 regional distribution centers as what we call them around the country servicing 4,600 stores. We then added this grocery capability to the store. So customers can now shop perishable items, frozen items, and so on. And in order to support that need, we created another supply chain called the Perishable Distribution Center, which holds and handles temp control items like frozen, fresh, produce, and so on. And that's another independent network that we had created to support this concept of super centers that was launched with grocery as a product category. We then launched e-commerce. This was probably in the last decade and a half or so where we started delivering orders to customers' homes. And in order to support that business, we launched this fulfillment center network, which has the, where we actually pick and pack in each of our units and deliver through our national carriers, which is, or using some of our local carriers as well. Now, what we've also done is, given that we have this footprint of 4,600 stores, we started leveraging the stores to be able to deliver orders to the customers from the assortment that is within the store. But we were always still relying on national carriers to be able to do that. We then added pickup. So customers now can actually come into the store, order online, and pick up either in the store or eventually even curbside. And to support that, we've created capabilities in the back of the store to dispense and also in the supply chain network to be able to take the incremental demand and be able to service the customer. And very recently, probably in the last couple of years, we've also added this capability of delivering from your nearest store. So today, if you shop on the Walmart app, you'll see that you'll have same day, sub-same day delivery capabilities for your grocery orders, for even some of your ambient items as well. So, and we do that by, and we've created this network called the gig driver network or what we call internally the Spark network that will use the gig drivers to be able to dispense the orders from the store and then be able to deliver to the customers through the sedan network that we've created. So now you see that over the years, what we've done to the core of our existence, which is be there for what the customer needs. I think we've held true to that principle. But in that process, what we've done is we've created a bunch of independent networks. And we are at an inflection point where we see that these networks, while they are servicing the needs of the customer are truly not optimized for what we wanna be as a supply chain organization. We have redundant, we have instances where there are parts of the network where we have excess capacity and then there are other parts of the network where we are constrained for capacity and there is not an opportunity for us to be able to leverage the assets that we had. They were not connected, they were very rigid in the sense that I cannot add a new capability if I had to add, for instance, the ability to fulfill an e-commerce order from a regional distribution center. I cannot do that. Because we have our systems, our processes, and our operations have been very rigidly defined to support specific functionalities, right? The other thing is we don't have, these are highly manual networks, which means that our ability to flex up and flex down, if we need incremental capacity, especially during peak events, we did not have the ability to be able to do that, to create the kind of flexibility in that network. So these are the challenges that we have, but as I said in the core of our existence, we want to be there for the customer and then we will obviously go back and optimize to reduce the costs, as well as provide better availability for our customers in store, online, and pick up. So now at this juncture, it's Walmart is all about transformation and this quote from our CEO, Doug McMillan, kind of summarizes it, right? We continue to change, we are adapting, and we continue to transform and disrupt ourselves. And a very clear example, like in the last couple of years, we have embarked on a massive transformation journey and it is so exciting to see what we are doing, coming up with and what Walmart will look like in the next five, 10 years, in terms of the automation, the innovation, and disruption that we're gonna create to be able to serve our customers across all the three shopping channels, in store, online, and pick up. I don't think I will be able to do justice to explaining this transformation, therefore I have a good video, hopefully it plays well, so I'm gonna go roll the video, if the volume comes up. What is innovation and creativity on behalf of our customers? Ensuring availability on the items they're looking for at the right time and at the best possible cost have been our priorities. Today, we're building a new and different supply chain. It's becoming more automated, more connected, and increasingly intelligent. What does that mean exactly? Our supply chain of the future is about being better, not just bigger. First, we're putting data and software to work in a connected and increasingly intelligent way. We're using more data, machine learning, and more advanced algorithms to anticipate and place merchandise more effectively. Second, we're adding market fulfillment centers, many of which utilize automated storage and retrieval systems, bringing inventory closer to the customer and improving speed of delivery. Third, we're adding a last mile delivery capability and buying thousands of electric vehicles. This connected, flexible network enabled by data and automation helps our customers by improving availability and serving them how they wanna be served. It helps our associates by evolving physically demanding jobs into more fulfilling, higher skill jobs. Over time, we believe we'll have about the same or more associates in the company, performing a different combination of roles and a larger business overall, and automation helps our business because these systems increase productivity and help us manage costs to deliver a value for customers, continued sales growth, and a return for shareholders. The story of Walmart's supply chain and distribution network has always been about innovation and we're not slowing down. So that's a powerful video that truly summarizes what I really wanna talk about in this presentation. I think a few things that you wanna take away from this which is we are building one connected Omnichannel supply chain network that is powered by data, powered by automation and innovation. That essentially that's the core of what you'll see over the next five, 10 years in terms of the transformation that we are going through. The other thing also is how do we enhance the quality of work within our buildings to be able to upscale the jobs and have our associates move away from physically demanding roles to a more systems oriented, now something that the associates don't have to walk nine miles a day and I'll probably talk about some of the details as well in the subsequent slides, but that's kind of the transformation that we are on. Now in my, the way I look at automation is two aspects to it or two dimensions of automation. One is the digital automation and then the other is the physical. And I think both are equally important for us to be able to really service the customers in a better way and really be able to kind of focus on improving our cost to serve. On the digital automation side, you think about the, it is all about building these engines, call it planning engines, strategy engines, execution engines that orchestrate the flow of product from suppliers everywhere, anywhere in the world all the way to a store or to a customer's home or inside a customer's home. But these products are flowing through, call it hundreds of assets and transportation to get to the store. Think about the fact that we have ocean transportation, we have drain, we have inbound distribution centers, we have crosstalks, we have perishable distribution centers, ambient distribution centers, we have fulfillment centers, we have delivery stations, we have market fulfillment centers, we have 53 footers, we have sedans, we have sprinter vans. These are just a summary of the kind of assets that are at play to really bring the product to the customer when they want and where they want. And that to me, imagine the power of the engines that is required to be able to orchestrate this flow. So that's a transformational journey that we are on in building out these suite of engines. We are already well underway, it's not that we've just started, we are well underway in building out these engines and we will continue to do that and keep pace with the physical transformation that is also another massive inflection point for us in our company. The second aspect of this is the physical automation. The way I see it is this is about taking away some of the physically demanding roles inside our distribution centers or fulfillment centers and upskilling the jobs to have some jobs like systems operators, cell operators, maintenance technicians and so on. And while infusing productivity into your system and capacity as well. So you see this end to end network that I have on the screen, starting with the customer and at the stores, we're deploying automation at our FCs and DCs, we have different types of automation. I'm gonna briefly allude to that in the next couple of slides. We have automation in our consolidation centers and going all the way up to our origin consolidation. And we are literally almost going in in a very synchronous way where every leg of our supply chain, if it is ripe for automation, we are making the change right now. I'll probably spend a couple of minutes on the digital and then add on the physical and then kind of show you an end with the video. So at the core of the digital transformation is our ability to forecast customer demand, which I think I'm sure all of you will agree. If you don't have good customer demand, I think the rest of it is just kind of not very productive in terms of what you would do. So we have our forecasting engines that are calculated evaluating customer demand at a final grain that we have then we've ever done before. What you see in the screen is these hexagons or half-mile hexagons, which we call pixels, and that's the level at which we are forecasting customer demand for a particular given item. So think about millions of items at half-mile hexagons across the country. The magnitude of the size of the problem that we have at hand to be able to predict the demand. And then we then use this forecasting demand or the demand to then deploy the inventory at the right location. So then we have a suite of engines that are called the inventory management or inventory optimization engines that then deploy millions of SKUs across all of these assets in the right quantity at the right place, at the right time to be able to maximize product availability with the customer. So if a customer is shopping with us online or in-store, we need to make sure that the product is available in stock at the right speeds if it is e-commerce or it is on the shelf and the customer does not have to substitute for another item. So that's kind of the core of the inventory optimization engines. We then have our last mile delivery and routing engines which would then design custom service areas across stores in towns and cities around the country to balance demand and capacity to be able to reduce the cost for delivery. What you see here is three stores in the Dallas market and you'll see that we have different colored pixels around each of these stores. So these are these pixels are, so historically maybe taking a step back, historically we used to have a very archaic approach of uniform circles that are service areas. Now we're using digital simulation tools to assign the right pixel to the right store so that we can balance the capacity and demand while reduce the cost for delivery. And you'll see that we are no longer going with this traditional nine mile or 10 mile or 12, 15 mile radius around the store to service which makes sense to start your program with but that's not what we would do if you really want to optimize your cost for delivery. So as you can see how we think about this, your demand engines that are forecasting demand across multiple channels, your inventory deployment engines that are then taking this forecast and deploying inventory and then your delivery engines that are then executing to the service areas to reduce the cost for delivery and obviously meet the customer expectations in terms of speed and availability. On the physical automation side, we have several technologies that are deployed really, really excited about the change that we are seeing across the length and breadth of supply chain. If you followed the news, we've launched a site in Dallas yesterday. I think it was announced yesterday. We had one in Sacramento. So you'll probably see a lot more announcements coming up in the next several months to years but we have automation in our fulfillment centers. These are automated storage and retrieval systems where an associate who would have, who would typically walk nine miles a day now can sit at a station and the product comes to the associate and then he can actually fulfill customer's orders directly onto a customer's box that then automatically gets closed, taped and labeled to be shipped to the customer using a national carriers or one of our internal carrier models. This fulfillment center network has the ability to hold millions of SKUs and it doubles the product more than doubles the productivity and it has the capacity to, the way I would see it is, we call it cubic capacity. I don't want to get into the terminology but it has more holding capacity, more than double the holding capacity of what a traditional fulfillment center would. So you'll see the metrics are really, really impressive and we have launched several of these already at the one in Dallas is the latest that the announcement came around. So really excited about the progress that we're making on the fulfillment center network. The next is the perishable distribution center. One of the things that I'm excited about on the perishable distribution, this is also a case storage and retrieval system. So cases would be automatically received and then held in a matrix and then once an order comes in, the cases would come out, a robot would actually bring the cases out and then you have an automated palletizer which would build pallets using intelligent algorithms that can then directly be loaded on the trailers and then off it goes to the store. The best part of our perishable distribution automation is some of the jobs that they have that we have, I don't know if you ever walked up EDC but you'll see that associates are working in some really harsh conditions with subzero temperatures for hours and weeks and days. And with this automation technology, we completely eliminate that and now the associates are sitting in much more comfortable conditions and working on machines to maximize the productivity, fix issues on the system side and increase the uptime of the overall system and productivity. So that to me is a massive, massive impact that we are creating in our business. The third automation is the Ambient Distribution Center. So this is very similar to what the perishable distribution center is. The exciting part about this is historically what we used to do is we used to manually order fill, we load, caseload the trailers and then a trailer would go to the store and then the associates would unload the trailer, sort the cases to the aisles and then another associate would take the pallets to an aisle and then would stock it. With this automation, we would actually build pallets which are really tall, like nine feet tall pallets that can be directly loaded onto the trailers. But the beauty of this is we would actually build already sort, already pallets, which means that once the pallet is loaded onto a trailer and the trailer arrives at a store, A, you're unloading it much more efficiently because you don't have to case, you unload cases, now you're unloading pallets and then the pallets are directly taken to the sales floor and stocked on the shelf. So imagine the amount of touches that you would have eliminated and the complexity at the store, that is one of the crux of the automation that this is creating, is the complexity that we are eliminating at the store so that the associates can actually focus on servicing the customers as opposed to handling cases and products. This has been launched in Florida, in Brooksville. I don't know if you have had a chance to see it but it's working really well and we are launching in several other sites and this transformation journey will probably have in the next couple of years and then you'll have a completely different distribution center network servicing the stores in the future. Now, how I would summarize the value of automation in our business is one, you create a lot more capacity from the same footprint so we are able to double, rather than adding more assets and more locations in the country, I could extract a lot more capacity out of our network. One of the things that kind of interesting for me to see is over the last three years, we have added $70 billion of sales to our business but really haven't grown our assets. And essentially the way our CEO calls it is we've added a Walt Disney in three years but without any more assets. So that's the power of automation that we are creating in our business. So more capacity from the same footprint, visibility and accuracy, the ability to know where your inventory is and how many units you have in your system, significantly improves with automation. We are able to reshape work and I'll roll the video that'll actually really bring that to life. Flexibility, the ability to expand, to create more capacity during peak times and not have to train a bunch of associates and then have to ramp it down. All of that can be done instantaneously with an automation solution. And then last but not the least, it just productivity, which is kind of a no-brainer with automation but the net effect of all of this is that we are servicing our customers in ways that we have never done before. We are creating jobs that did not exist in the past and that associates would love to come work with us and we are adding value to the business by lowering our costs to serve to our customers. So I'll end my presentation with a short video that really kind of brings this associate experience to life. It surprised me how many cases we can build in one hour without doing any physical work. When I was in shipping, I used to go home tired. I just wanted to go to bed so I can start my next day. I wouldn't never thought that we're gonna be working, you know, 19 years later with this robot here. Now I'm part of the future of Walmart. You may not be lifting heavy boxes because the automation is doing that for you but you do have to problem solve when the automation stops and figure out what's wrong. The items on these pallets are sorted by department so when the stores receive these pallets, they can take them directly to the floor. So they just pull the pallets, sort it in the AC which is great. They don't have to work as hard as they used to and that's probably the best benefit that I see as a leader. I want my associates to be happy with what they do. I want my associates to come to work and not worry about, oh my goodness, it's gonna be so difficult today. When we used to have the floor load, it was about two hours per truck. It could be much longer than that. Now I can get them done in under an hour sometimes. It's helped my associates who've been tied to the back can actually come to the store and learn more, learn areas, help other areas out so it can help them grow as associates. We used to have to process multiple broken jars. We no longer have that, which is another positive side. This is a great program. It's definitely not gonna be building one day but it's definitely worth waiting for. We want symbolic automation to be successful for the business to provide our associates with better jobs. Be open to it and when the opportunity comes up to work in automation, take that opportunity because it is the future. That's it.