Ulta Beauty Makes Major Supply Chain Investment
Ulta Beauty Makes Major Supply Chain Investment
Ulta Beauty has adopted a distinct strategy from its competitors in its supply chain transformation journey, which began in 2021. The company aims to create a more efficient operational model by equipping some of its existing regional distribution centers with automation upgrades. According to Chief Supply Chain Officer Erik Lopez in an interview with Supply Chain Dive, Ulta Beauty preferred to build a smaller and more flexible footprint rather than relying on large facilities that are often underutilized throughout the year.
Lopez explained that "we didn't want to build our network with a one-size-fits-all structure because our growth won't be just vertical," revealing the company's adoption of the MFC (Market Fulfillment Center) model. Under this model, four regional distribution centers, three market fulfillment centers, and one rapid fulfillment center will be established. The MFC model was chosen because it can be built more quickly, allows inventory to be housed under one roof, and requires less capital compared to large facilities.
Ulta Beauty currently operates three regional distribution centers in Dallas, Fresno (California), and Greenwood (Indiana). A fourth center is planned to be built in Chambersburg, Pennsylvania by 2026. The company aims to modernize existing distribution centers with new automation technologies to align with the MFC model. Technology upgrades completed at the Greenwood facility last year included automated induction systems and residual shuttles. In 2024, similar automation technologies and warehouse execution software will be added to the Dallas distribution center. These innovations aim to provide a standardized operating model across all distribution centers.
Lopez noted that warehouse execution software will function as the "brain" of Ulta's facilities and control the flow of goods. The facilities upgrades are being undertaken not because current automation technology is inadequate, but rather to develop employee skills and make processes more efficient. The new automation systems aim to reduce steps, minimize waste, and lower labor intensity.
Ulta Beauty is also working on Project SOAR, a comprehensive ERP (Enterprise Resource Planning) upgrade across the business. This project aims to accelerate and modernize core operations while delivering benefits to the supply chain. In particular, cross-docking capabilities enable products to be loaded directly onto transport vehicles without requiring storage. This allows Ulta to move products directly from regional facilities to MFCs and stores.
The company's two existing market fulfillment centers are located in Greer, South Carolina and Bolingbrook, Illinois. Construction of a similar facility in the Pacific Northwest is scheduled to begin in 2026 and is expected to open in 2027. Additionally, the rapid fulfillment center located in Jacksonville, Florida handles only e-commerce orders, strengthening Ulta's ship-from-store approach. This center can handle up to 25,000 orders daily, enabling rapid response to customer demands.
Ulta Beauty's transformation efforts, as part of its omnichannel fulfillment journey, aim to offer customers various options including online shopping, in-store pickup, and same-day delivery. The company remains focused on continuously improving supply chain operations and meeting guest needs.
Key Highlights:
Ulta Beauty has been undergoing supply chain transformation since 2021.
MFC model: four regional distribution centers, three market fulfillment centers, one rapid fulfillment center.
Existing distribution centers: Dallas, Fresno, Greenwood; Chambersburg to be added in 2026.
Automation upgrades: to be completed at Greenwood and Dallas centers.
Project SOAR: ERP upgrade with enhanced cross-docking capabilities.
Existing market fulfillment centers: Greer, Bolingbrook; new facility in Pacific Northwest in 2027.
Rapid fulfillment center: Jacksonville, Florida with daily capacity of 25,000 orders.
Omnichannel fulfillment strategy: online shopping, in-store pickup, same-day delivery.
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