Apr 2, 2022|
JD Industrial Supply and Shandong Gold Group Partner to Optimize Supply Chain Costs
by Doris Liu
JD Industrial Supply signed a cooperation agreement with Shandong Gold Group on March 31, aiming to provide digital and intelligent services to optimize the comprehensive costs of the entire supply chain for the mining company.
Since last year, JD Industrial Supply, JD’s MRO business providing industrial products and services, and Shandong Gold Group, the parent company of Hong Kong-listed Shandong Gold Mining, have engaged in an in-depth discussion on the overall solution aiming for digital transformation of the supply chain from management of commodity, procurement, inventory to fulfillment and delivery.
As one of China’s biggest gold producers, Shandong Gold Group owns a number of mines and smelters, which are generally located in remote areas of the country such as Qinghai, Hainan and Inner Mongolia, where transportation is routinely challenging.
In the supply chain management, commodity’s price cost is only one of the many factors, and costs of service and maintenance in sourcing, transportation, warehousing and management must all be considered to achieve the best comprehensive cost of the supply chain, according to an executive at Shandong Gold Group.
During the pilot project, JD Industrial Supply managed to reduce the comprehensive cost by 22 percent by increasing the rate of on-time delivery dramatically. It will further help Shandong Gold Group utilize the on-hand and future inventory of manufacturers, third-party suppliers and local service providers by using the standard commodity library called “Mercator”, which was built by JD Industrial Supply to promote the standardization of material management.
Based on JD Industrial Supply’s intelligent decision-making system of supply chain, Shandong Gold Group can realize the best value delivery in the future with lower logistics and warehousing costs to achieve its goal of pioneering the digital transformation of gold mining industry in other countries.