- Oct 25, 2018
- Executive Spotlights
What is Global Smart Supply Chain?
Global commerce is undergoing one of the biggest evolutions we have ever seen—one driven by technology. We are making and moving products at unprecedented speeds, straining traditional supply chains built for a slower pace in a different, more predictable world.
At JD.com, China’s largest retailer, online or offline, we sit in between the ever-more demanding consumer and the companies that produce the products and services that matter to them most. We believe the only way to keep up with such monumental changes is to rethink our supply chains, and build them to be smarter, more interconnected, more flexible and more global.
JD, which serves over 300 million customers, is a technology company at its core and accomplishes this for our own e-commerce business through a wide range of innovative planning, advanced technologies, partnerships and integrated solutions.
Collectively we call it Global Smart Supply Chain, or GSSC, and believe we can apply it to more scenarios in the future. We want to build out the future of commerce by helping other companies and industries discover more efficiencies.
Together with our partners, we believe technology and GSSC principles can reduce logistics costs to just a fraction of what they are today, across all industries. As we expand our international logistics network, we want to connect the world by achieving two-day shipping from China to other countries, and vice versa. We also want to achieve 48-hour local delivery in several regions around the world.
At this year’s GSSC summit, held last week in Beijing, we were excited to unveil some of our latest initiatives which are only a few examples of the amazing things a company can accomplish when taking this approach to supply chains. We’ve greatly expanded our programs to offer fulfillment and transportation solutions to shippers including Unilever and Mead Johnson. We now offer a cloud-based warehouse management solution that can be used for warehouses of any size or level of development, so other retailers, vendors and logistics companies can easily upgrade their facilities, better manage inventory, and maximize use of their warehouse space.
We’ve become the first-ever retailer, online or offline, to launch a parcel delivery service serving residential and business addresses. JD operates China’s most advanced and far-reaching in-house logistics network and, thanks to proprietary supply chain management technology, is capable of delivering over 90% of JD.com orders on the same or next day. In the future, we want to deliver parcels to millions of families in China with the safest, most convenient and wide ranging service possible. We do scheduled deliveries and luxury white glove deliveries for our e-commerce customers. It was a natural next step for us to open this infrastructure and technology to other shippers.
We also announced a brand new research facility, through which we are engaging in top level design of logistics networks for smart cities. This includes our exploration of underground logistics systems, which will reduce pollution and congestion, while providing a logistics service that is smooth and efficient with minimal disruption to daily life.
And last, but definitely not least, we continued the expansion of our Green Stream Initiative to make our supply chain more eco-friendly. We’ve designed reusable packaging, which consumers can opt into in exchange for coupons and rewards. If just 10% of orders use the new packaging, we estimate JD can save 32.5 billion RMB a year, another example of how working for a better planet can also benefit the bottom line.
A decade ago, few would have thought that a retailer, much less an online retailer, could provide the backbone for the future of commerce. The retail business was traditionally about buying and selling products, and its supply chain was simply a cost center that needed to be controlled. But under the principles of GSSC, JD.com sees its supply chain as a core asset, not only for business, but for the overall modernization and improvement of society.