Aug 31, 2021|

JD’s Supply Chain Enables Shaanxi Coal Mine to Increase Operation Efficiency Through Automation


by Mengyang He

On August 23, JD Logistics (2618.HK) reported its 2021 interim results. In the first half of the year, JD Logistics (JDL) kept investing in the infrastructure construction, supply chain technology, R&D, and further expanded the width and depth of its supply chain solutions and services. As of June 30, 2021, the number of external integrated supply chain customers reached over 59,000, one of which is a leader in the mining industry, Xiaobaodang Mining Company.

The intelligent supplies warehouse powered by JDL’s integrated supply chain serves as an example of digitalization of the mining industry. As coal mines used to be the epitome of danger and were far from being technically advanced, JDL provides digital solutions to the industry. Coal mine warehouses are now equipped with various technologies that increase both safety and operation efficiency.

“Hi, I’m here for the supplies,” said Wang Peng, a frontline worker from Xiaobaodang Mining Company. Standing in front of the intelligent supplies desk, Wang is in urgent need of valves that should be delivered into the mine.

On the other side of the desk, Liu Pei, a janitor of the company’s intelligent supplies warehouse, pinpoints the corresponding order in the supplies management system and calls for the supplies through the PDA smart device. The supplies arrive shortly, and after confirming the right specifications and models, Liu clicks “out of the warehouse.” Then Wang Peng receives the supplies he needs, and the whole process takes only a few minutes.

This is a microcosm of Xiaobaodang’s smart coal mine. Xiaobaodang has transformed itself into a modernized coal mine since 2017. However, during the process, it has confronted many challenges in digitalization, notably the supply chain management.

Yet, with an area of nearly 3,500 square meters, it is the first smart warehouse in the coal mining industry in northern Shaanxi region. What facilitates the material supplies of Xiaobaodang is JDL’s integrated supply chain.


Impact on Operation Efficiency

“In the past, the common supplies needed by downhole operations had to be pre-ordered with a plan and then collected from the warehouse,” said Ke Xiangang, a manager from Xiaobaodang’s intelligent supplies supermarket. “Excessive orders would result in overstocking, while insufficient orders might affect the operations. Now, the intelligent supplies supermarket has realized the smart management of the warehouse and one-stop distribution. No matter if it is an order in advance or an order on short notice, it can be operated online, and even the supplies can be ‘grab-and-go.’ It effectively reduces the material storage and optimizes human resources.”

There used to be dozens of staff in the material storage area responsible for the inventory, storage, etc. After the cooperation with JDL, a team of seven can handle the management of nearly 4,000 stocks in the smart warehouse. All processes have become more labor-efficient, safe and reliable, whether it is PDA device usage, scanning, using the Automated Ground Vehicles (AGVs), automatic handling of large items, or intelligent storage.

According to Ke Xiangang, due to the wide application of intelligent systems and equipment, the nature of work has evolved. Today, workers spend over a third of their time dealing with smart devices. “We are now interacting with all kinds of robots instead of materials as it used to be,” Ke said.

“At present, Xiaobaodang has realized full automation of material handling, thus its space utilization rate increased by 150%, overall storage increased by 70%, operational efficiency increased by 50%, and transport efficiency has also been significantly improved,” JDL reveals.


Goal: An Intelligent Coal Mine

Material control is an important part of reducing production costs. The more process it takes, the more investment it requires, and the more manpower, inventory, and waste it creates. Therefore, Xiaobaodang partners with JDL, using IoT, automatic guiding and storage to implement the planning and construction of unmanned management of intelligent supplies warehouse.

The warehouse management system (WMS) built by JDL for Xiaobaodang can not only realize high-density storage of goods, delivery selection, and automatic warehousing, but also provide professional services for material supply in the direction of warehouse distribution data, intelligent adjustment, sales prediction, analysis and diagnosis.