by Yuchuan Wang
JD.com was selected by INFORMS as a finalist for the 52nd annual Franz Edelman Awards, the world’s most prestigious honor for achievements in analytics and operations research (O.R.). The company has been recognized for its advanced research and application of a responsible supply chain that facilitates JD to achieve three levels of superior performances, including daily operational excellence, resiliency under disruption and value creation for the ecosystem, according to a press release by INFORMS on January 17.
COVID-19 has had a profound impact on the retail industry, causing supply chain disruptions to different parties within the ecosystem. JD-Y, JD.com’s smart supply chain research body, developed a collaborative and holistic supply chain solution to mitigate the disruptions.
From the retailers’ end, based on AI deep learning, JD-Y’s “End-to-end Optimization” offers an optimal automated replenishment plan that provides almost certain forecasts even under uncertain conditions. It leverages enormous historical data, deep learning technology, inventory strategy and more, to enable better decision-making process and supply chain operations. Based on this end-to-end solution, JD.com has achieved an automated procurement rate of 85 percent, an online availability of 95 percent and 31.5-day turnover days while owning over 10 million SKUs.
From the consumers’ end, emergencies such as the pandemic can result in delayed fulfillment due to closure of roads, shortage in labor, skyrocketing order volume and more. JD-Y’s “Intelligent Risk Management System” can detect and identify the risks and disruptions even before they take place, rank their severity and coordinate the whole supply chain at the same time to allocate and ensure supplies catch up with demand and reach end-consumers effectively. This system helped JD.com rank No.2 on Fortune’s 2022 Change the World List for its efforts in delivering essential supplies during the height of the COVID-19 outbreak in China.
From the manufacturers’ end, given the fact the chain is long and there are several intermediate links between the manufacturer and consumers, it is hard for manufacturers to accurately and quickly capture the demand. Additionally, the bull-whip effect usually increases the inventory cost. More efficient product development and operation are crucial especially during disruptions, because the resources and cash flow are more limited. JD-Y’s C2M (consumer-to-manufacturer) solution helps manufacturers improve their overall efficiency, from product design, intelligent production planning, to inventory planning and sales strategies. It has been proved to enable manufacturers to reduce product launch time by 67 percent.
Named after Franz Edelman (who established one of the earliest industrial operations research and management science groups) shortly after his death in 1982, the award aims to recognize and reward global outstanding examples of operations research, management science, and advanced analytics in practice.
JD Logistics couriers departed from Harbin to support Beijing 