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Integrated supply chain services redefine logistics value

Time:2019-12-10 17:05:57   Reading:3119

For an enterprise, logistics is generally a field of spending money. Because it is a cost center, managers must find ways to reduce costs and increase efficiency. At the same time, it is a service field and relies heavily on the front-end industry, just like the huge demand brought by e-commerce to logistics. The development of e-commerce in China over the past 10 years has largely achieved the logistics and express delivery industry.
 
How will logistics change in the future?

Logistics is a basic industry, which can reflect the strength of a country.

Whether it is traditional logistics or emerging logistics such as e-commerce logistics, we can see these development trends. The first is specialized, the second is intensive, and the third is integrated. Because more and more enterprises need to be professional and comprehensive, scale can bring about marginal effects.

Regardless of whether it is a retail enterprise or a manufacturing enterprise, the value of logistics and supply chains in the competition of enterprises has become greater and greater in recent years. The logistics supply chain as a channel has become a key competence in enterprise competition. For Chinese logistics practitioners, the past five years have been a golden age, and the same will be true for the next five years. It is definitely a very good development opportunity.

The future changes of the logistics industry will depend on two factors: the first is demand-oriented, such as cross-border logistics, the pursuit of overseas quality goods is a typical demand-driven industry change; also for crowdsourced logistics, fresh and takeaway companies are based on Short-distance real-time logistics was developed for the model. The second is technology-driven. In the next 5-10 years, technology will definitely be the underlying driving force, which will have a great impact on the logistics industry. The 5G, Internet of Things and other technologies we are seeing now, the application of unmanned vehicles, drones and other products will definitely be the trend and it will be possible. But it will definitely be divided into scenes, not that all scenes are adapted.

In any case, optimization of experience, efficiency, and cost will be everywhere.

How to redefine the value of logistics?

As a logistics practitioner, everyone wants to make the value bigger. How to define the value of logistics?

In 2017, we launched the 3S theory on integrated supply chain services: short chain, intelligence, and symbiosis.

The short chain is to get the goods to your hands with the shortest distance and the least number of transfers. From the production of a product to reaching consumers, in the early traditional logistics and traditional retail, it has to be turned around many times, and it can only reach consumers through layers of distributors, dealers, and stores. This whole process will bring two problems. The first is the increase in costs, such as handling costs and cargo damage. The second is the decrease in efficiency. Multiple transfers bring inventory and turnover, resulting in time loss. Based on the layout of the warehouse network and technical drive, the short chain must reduce the number of times and distances to be moved, straighten the chain, and make good product predictions. The shortest chain is produced directly from the factory and delivered to consumers. The delivery countdown starts at the moment of delivery.

Intelligence (technology) is the first element driving innovation in the logistics industry. We invest heavily in technology every year. To believe that logistics technology will bring great changes to the logistics industry, such as drones, unmanned warehouses, etc., which will bring about changes in efficiency, companies need to constantly explore, which is the internal drive. It is also corporate responsibility. Whether it is hardware infrastructure update or AI, big data, 5G and other software technologies, continuous investment and application are required. The efficient decision-making of our company includes the management of more than 100,000 people, which is also guaranteed by technology and data. Intelligence is extremely critical. .

Symbiosis is the industry ecology, and it is also the concept of cooperation we adhere to. The logistics industry is very large. Just to serve an enterprise requires diversified service capabilities such as shipping, air transportation, cross-border, including crowdsourcing. In the entire process, it is to rely on partners to build platforms to provide integrated services, not an enterprise. Can be done.

Promote the opening of JD Logistics with technological innovation and promote the landing of short chains, intelligence, and symbiosis. JD Logistics has established a supply chain technology platform, including three levels of content:

The first level is the underlying technology, which continuously collects data and obtains data, whether it is 5G, cloud computing, big data or other, to build the foundation for technical applications through data computing; the second level is hardware and software (system) Layout, classification and application of docking data, and systems in various modes, including OMS, WMS, DMS, and store settlement systems, etc., have been applied to various systems through various scenarios; the third level is intelligence The application of supply chain in the corresponding industry, we design the supply chain model and network layout according to different industries.

From corporate logistics to logistics enterprises, why is JD Logistics going open?

Jingdong Logistics changed from a logistics department to an enterprise serving the entire society, serving more than 200,000 customers. What was the decision path at that time?

The first is to look at the industry. Before the decision-making process became independent, we saw that China's logistics industry was still relatively scattered, but more and more companies had intensive and comprehensive logistics needs, and they hoped to outsource their own logistics. Can JD Logistics do this? This is an opportunity brought by the industry.

Secondly, from its own construction in 2007 to its opening to the outside world, JD Logistics has well supported JD's development, and has also gained consumer recognition and a certain industry reputation. These are two very important factors in promoting openness.

Of course, we have also been thinking about the deeper value logic of opening up to the outside world. What value can it bring to enterprises?

First, logistics is about scale. Opening up will definitely bring more orders. Whether it is JD.com or external customers, the effect of scale will bring down compliance costs and bring value.

Second, this service brings stronger competitiveness to the enterprise, promotes its business flow and business development, and creates value for the enterprise.

Opened for more than two years, I have been innovating every day, and I have been stepping into the pit every day. A team of over 100,000 people has changed from a strong coupling model organization to a building block organization. Every brother must change. All change. This is not only a very important manifestation of the improvement of JD logistics capabilities, but also a key point of our business openness.

Logistics opening is life and death decision

Three conditions must be met for logistics opening:

First, after the opening, our old and new customers are more satisfied. The old customers are more satisfied than I was before the opening, and the new customers are more satisfied than before I did not use JD Logistics.

Second, the cost has been reduced and the efficiency has been improved. From the current point of view, this trend is still obvious. Many external customers have significantly reduced their costs after using JD Logistics services.

Third, the proportion of orders, JD Logistics's original orders are 100% of JD. Now the proportion of external business revenue has reached 40%, this year will be close to 50%, reaching 50%, our opening has been more successful. Of course, there is no end to consumer and business satisfaction, and we will continue to spur us forward.

When executives of every enterprise make decisions, some are operational decisions, some are tactical decisions, some are strategic decisions, and some are life-and-death decisions. If this decision is correct, the company will be born. If it is wrong, the company will be very troublesome. The opening of JD Logistics is a life-and-death decision. It will not only affect the life and death of JD Logistics, but also the development of JD Group.

Leading the transformation of more than 100,000 employees, how does JD Logistics guarantee the efficiency of the organization?

The first is the goal conversion: operation becomes business;

Second, the structural adjustment: the organization changed from the original closed operation to the service-oriented operation;

The third is organizational activation: Big Boss is used to activate internal organizations, so that grassroots organizations can make autonomous decisions at the request of the company, and "allow those who hear the sound of gunfire to get command."

Corporate culture and values determine strategic execution. Behind the opening of JD Logistics is the support of culture and values. "Innovation, execution and customer first" are a very important part of it.

Innovation: The only constant is change, as is JD Logistics. The entire team is innovating everywhere. In addition to continuous advocacy and diverse incentives, there must be fault tolerance mechanisms. More than 90% of innovations, especially breakthrough innovations, are easy to fall into the pit, so innovation must have a fault tolerance mechanism. As a manager, you must learn to control your own mouth. If the evaluation of employees' suggestions is negative, Critical, companies will not be innovative.

Execution: I personally divide it into two categories, one is form, and the other is god. Everybody can see that, for example, each management level must use management methods and principles, decision-making mechanisms, assessment mechanisms, incentive mechanisms, and so on. God is invisible in the short term. Why is an organization effective? It is very important that employees have a sense of belonging, honor and identity. Whether it is five insurances and one fund or more than the welfare benefits of the industry, rather than how to efficiently manage more than 100,000 employees, we can make our more than 100,000 employees more efficient through our services.

Customer first: Many companies are talking about customer first, customer first. JD Logistics' core strategy is "experience-based, efficiency wins." Experience is 1, efficiency is 0 after 1, "customer first" is the most important experience. If our experience is not good, the customer is not "first," and no matter how high the efficiency is, this is our value.
(The author is the CEO of Jingdong Logistics Group)

Source: China Water Transport News

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