Apr 19, 2021|
JD ESG: Green Packaging Saves 10 Billion Disposable Boxes
by Yuchuan Wang
As China’s largest retailer in China, JD.com has made great efforts in reducing packaging waste, through establishing operations regulations, technology innovation, and collaboration with up and downstream partners. In its first ESG report released on Apr. 19, the company announced that it has facilitated hundreds of brand enterprises to join in using green packaging, which has reduced industry-wide disposable packaging usage by nearly 10 billion pieces.
As said by Richard Liu, chairman and founder of JD.com in his letter accompanying the ESG report, “China is playing an increasingly important role in global climate and environmental governance… JD is accelerating its own low-carbon development through technological means, promoting the green transformation of the industry, and leading society toward green consumption.”
Express delivery package volume in China has exploded in the past decade, growing from 5.7 billion in 2012 to over 80 billion in 2020, thanks to the development of e-commerce. The skyrocketing number of parcels also poses concerns regarding packaging waste and environmental pollution. If each package is to weigh 0.2 kilograms, then 16 million tons of such waste was produced last year.
Optimization of packaging materials
The optimization of packaging involves introducing new materials to reduce thickness, weight or width, such as cardboard boxes, plastic bags and even adjustments to packaging tape.
“JD has adopted three-layer (which are normally five-layer) cardboard boxes for 95% of its cardboard packaging, while the average rate in China is 60% to 70%. [JD’s rate is] even higher than the in the US which is 90%,” said Jerry Duan, head of JD’s Green Stream Initiative.
Similarly, JD has managed to decrease the thickness of plastic delivery bags from 60 to 70 micrometers to 40 to 50 micrometers.
In 2015, JD.com proposed the concept of “Slim Tape” to the industry to replace 60 millimeter packaging tape with 45 millimeter ones, based on the company’s repeated and verified tests in its own logistics business. Now, JD’s “Slim Tape” has been included into China’s standards for postal industry and used in external logistics enterprises. By promoting it and reusable boxes, tape usage at JD can be reduced by 630 million meters per year.
JD also researched an advanced system to facilitate warehouse workers in choosing the right packaging and minimize waste. According to Duan, there are at least a hundred types of packaging used in JD’s warehouses. It can be hard to employees to eyeball which one might be most effective in reducing waste.
The JD intelligent packaging recommendation system automatically suggests the suitable packages in the best size according to the size of the order, and guides workers on how to arrange the products to save space. The accuracy of the recommendation can exceed 96.5%.
Reusable packages
As early as in 2015, JD.com began to use reusable cold chain boxes for its fresh produce business, instead of the standard disposable foam boxes, making it the first e-commerce company in China to adopt recyclable packaging. JD’s in-house logistics makes it possible for the boxes to be collected and reused to its warehouses and other production scenarios. So far, 180 million disposable foam boxes have been reduced.
In December 2017, the reusable Green Stream Box was officially introduced for normal temperature goods such as FMCG products. Today, these green-colored boxes have been widely used as normal containers in over 30 cities in China, with over 16 million times of use in total.
In the warehouse, JD has replaced its disposable woven bags with recyclable transfer bags used in the process of goods transfer from warehousing centers to distribution centers. With the average utilization rate of over 98%, transfer bags can save nearly 80 million disposable plastic woven bags annually.
JD Logistics, JD.com’s logistics arm, also launched the Green Packaging Alliance and China’s E-commerce & Logistics Packaging Standards Alliance, which developed the industry’s first packaging standards and is playing an important role in promoting the industry’s environmental-friendly development. Members of the alliances include giants such as P&G, L’Oréal, Unilever, Johnson & Johnson, Unicharm, Kimberly-Clark, Blue Moon, Mengniu, Lenovo, ZTE and more.
Innovation from the origin
It is not uncommon for e-commerce companies to repackage products with complicated materials such as multi cardboard, bubble wrap, paper and buffing pads, to prevent damaged in transport.
“In order to get rid of secondary packaging for e-commerce sales, we are working with the upstream brand owners to adjust the design of their original packaging,” said Duan. “Manufactures need to re-design their packaging to meet the requirement of long transportation of a single product for online sales.”
“It means that from the factory of a brand to the warehouse of JD and to the doorstep of our customers, no additional packaging is needed,” explained Duan.
By collaborating with JD, P&G has fully shifted to use original packaging for its products in all its e-commerce channels. And the original packaging has helped hundreds of brand enterprises reduce industry-wide disposable packaging usage by nearly 10 billion pieces from 2014 to 2020.
Leading a green supply chain
In addition to packaging, JD is also leading in green warehousing.
The company pioneered a rooftop distributed solar PV system in Shanghai “Asia No.1” logistics park in 2017, which has been supplying the energy for warehouse lighting, automatic sorting, automatic packaging, automatic picking and other activities. In 2020, the power generation reached 2.538 million kwh, equivalent to approximately 2,000 tons of carbon dioxide emissions reductions and saving approximately 800 tons of standard coal. A total of more than 200 megawatts of solar PV power plants are expected to be installed in JD’s logistics and intelligent industrial parks by the end of 2021, to achieve an annual power generation of more than 160 million kwh after completion.
In transportation, the company has been gradually replacing traditional fuel-combustion trucks with new energy vehicles since 2017 and has adopted such new energy vehicles in more than 50 cities across China, reducing at least 120,000 tons of carbon dioxide emissions per year. In addition, JD has built and introduced more than 1,600 charging stations nationwide to better support the operations of the vehicles. Big data is applied to provide drivers the real-time optimal route planning to help reduce the number of vehicles in transit, increase the full load rate of return vehicles, and optimize the efficiency of logistics transportation.
Apr 18, 2024|
JD.com Awarded 2024 INFORMS Prize for Excellence in Operations Research and Analytics
JD.com is honored to announce that it has been awarded the 2024 INFORMS Prize. This recognition makes JD.com the first Asia-based enterprise to receive the award, highlighting its pioneering use of advanced analytics and operations research/management sciences (OR/MS) within its business operations.
The INFORMS Prize is awarded an organization that has repeatedly applied the principles of advanced analytics and OR/MS in pioneering, varied, novel, and lasting ways. Previous recipients include Walmart, Wayfair, Amazon, UPS, Booz Allen Hamilton, BNSF Railway, Walt Disney Company, U.S. Air Force, General Motors, Intel, HP, IBM, Ford, Procter & Gamble and GE Research.
Speaking on behalf of the selection committee, Mehmet Gumus, 2024 INFORMS Prize committee chair, remarked: “JD.com is showcasing data science as a source of business success and a necessary element to achieve customer satisfaction with continuous and dedicated practice. JD.com is truly deserving of this prestigious prize, and the entire O.R. and analytics community joins INFORMS in thanking them for their priceless contributions to the field and the business world.”
JD.com’s commitment to enhancing operational efficiency and customer service through OR/MS has been integral to its success. The company has developed an independently managed intelligent supply chain system that utilizes cutting-edge operations research algorithms to optimize warehouse management and logistics operations. This includes the operation of hundreds of intelligent warehouses and dozens of “Asia No. 1” intelligent logistics parks.
“We are honored to accept the INFORMS Prize and will continue to be steadfast in our dedication to leveraging the transformative potential of operations research,” said Sandy Xu, CEO of JD.com. “Our company’s supply chain not only aims to lead the industry, but also enhance the efficiency and well-being of our entire ecosystem.”
By the end of the fourth quarter of 2023, JD’s supply chain infrastructure assets had grown to RMB 153.8 billion, an increase of 16% year-on-year. Managing over 10 million self-operated SKUs, JD has achieved a global leading average inventory turnover of 30.3 days. This operational prowess enables JD to fulfill 95% of retail orders within 24 hours, significantly enhancing customer satisfaction and setting new standards in the industry.
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JD Super’s Ninth Annual “Baby Party” Campaign: Supporting Families with Newborns
JD Super, JD.com’s omni-channel supermarket division, successfully concluded its ninth annual “Baby Party” campaign, which ran from April 1st to 14th. Collaborating with leading brands from home and abroad, the campaign introduced new products and services designed to improve the shopping experience and reduce expenses for families with newborns.
Pioneering services included the “Fresh Milk Powder Express,” guaranteeing delivery of farm-to-consumer baby formula within 28 days, and the “Free Diaper Offers for Newborns” initiative, set to distribute one million diaper packs annually. Moreover, the “Life’s First Bottle” project significantly reduces the costs of high-quality milk bottles by offering them exclusively online at a 50% discount.
JD Super’s specialized after-sales services extend to over 90% of the company’s self-operated products, offering services such as free returns or exchanges. Another highlight was the introduction of the Chun Rui milk formula, developed in partnership with Feihe, a leader in infant milk production. This collaboration ensures top-quality products at better value for families.
Additionally, JD Super launched an online portal dedicated to public welfare activities, which promotes cost-saving measures, shares knowledge on baby care, and supports charity initiatives.
As part of its commitment to philanthropy, JD Super donated essential baby supplies valued at over one million yuan to 1,000 families in the economically disadvantaged Liangshan Yi Autonomous Prefecture of Sichuan Province, supporting local parents in this region.
The 2024 Report on Cost of Childbearing and Childrearing in China shed light on the challenges faced by parents, including limited free time and growing anxiety over rising costs and product safety. JD Super aims to mitigate some of these concerns by providing support to families nationwide.
JD Helps MRO Start-ups in Wuhan Grow Business
