UNFI's DC network consolidation and lean rollout lifted service four quarters running
After two unsteady years, UNFI consolidated DCs and rolled lean daily management to 44 sites, posting four straight quarters of service gains.
What was changed
UNFI launched a distribution network reorganization in fiscal 2025 under a three-year financial recovery plan, after two unsteady years. The latest move shifted operations from the Racine, Wisconsin distribution center into the nearby Joliet, Illinois facility, completed in June 2026 and announced by CEO Sandy Douglas on the September 8 earnings call. Joliet is early in full-case automation, and President and COO Giorgio Tarditi said the consolidation should serve Midwest customers and suppliers "while generating operating efficiencies," though "a little bit of growing pains" are likely.
The reorganization has redrawn the map in both directions. UNFI consolidated distribution centers in North Dakota, Montana, Indiana and Pennsylvania into nearby facilities between October 2024 and October 2025, SVP of network process optimization Rajiv Sujan said, while opening a Manchester, Pennsylvania facility in September 2024 and a Sarasota, Florida distribution center in August 2025.
The operating system changed with the footprint. By August 1, the end of fiscal 2026, UNFI had completed the initial rollout of lean daily management at 44 distribution centers, and Tarditi credited it with a fourth consecutive quarter of year-over-year improvement in order fill rates, on-time deliveries and warehouse throughput. The company also finished rolling out its AI-powered supply chain and procurement planning platform across every distribution center in fiscal 2026, and a second phase, Lean 2.0, is planned to strengthen daily programs and management problem-solving.
Why it worked
Fewer, bigger sites concentrate volume where automation pays: Racine's volume now flows through Joliet, which is early in implementing full-case automation.
Lean daily management gave the smaller network a common operating rhythm; management ties it directly to four straight quarters of improving fill rates, on-time deliveries and throughput.
Planning technology compounds the consolidation: fiscal 2026 finished the AI-powered supply chain and procurement planning platform rollout across all DCs.
What can be applied
Shrink the network, then systematize it: closing duplicate DCs only pays off when lean daily management and automation turn fewer sites into faster, more reliable ones.
Aftermath
Fiscal 2027 carries $300 million of capital spending for automation, an ERP deployment and other technology initiatives meant to simplify processes and give faster, better operational insights, Tarditi said. Lean 2.0 will deepen daily programs and problem-solving. The Racine-to-Joliet move is still early, and the company itself cautions the three-year recovery remains a work in progress.