Global Smart Supply Chain Summit 2019: Technology Is Driving Improvement in the Efficiency of Supply Chains
The Coresight Research team attended the 2019 Global Smart Supply Chain Summit in Beijing on October 29, which focused on the evolution of supply chain operations in the digital age.
In this report, we summarize some key insights from the event, covering the following topics:
- The benefits of 5G technology
- How businesses must adapt their supply chains to respond to the changing consumer landscape in China
- The digitalization of supply chains in traditional industries
- The increasing focus on sustainability across the supply chain
On October 29, the Coresight Research team attended the 2019 Global Smart Supply Chain Summit hosted by JD Logistics in Beijing. In this report, we summarize some key insights from the event:
- 5G technology enables businesses to improve efficiency in supply chain operations.
- The changing consumer landscape and greater demand in China are driving digital upgrades in the supply chain.
- Digital supply chains empower the transformation of the Industrial Internet of Things (IIoT).
- Building a sustainable supply chain is becoming a major focus across multiple industries.
The 2019 Global Smart Supply Chain Summit was held on October 29 in Beijing. Hosted by JD Logistics, a supply chain and logistics services provider for the e-commerce industry, the event brought together a number of supply chain leaders to discuss the latest technologies and the benefits they can provide for businesses and consumers.
5G Technology Enables Businesses To Improve Efficiency in Supply Chain Operations
5G, the fifth-generation cellular network, can deliver high speeds of 10-20Gbs at a low latency of less than 1 millisecond. The Global System for Mobile Associations (GSMA), a trade body that represents the interests of mobile network operators worldwide, predicts that 5G will contribute $2.2 trillion to global GDP over the next 15 years. Speaking at the summit, Wang Jianzhou, Senior Consultant at GSMA, said that the Chinese government granted 5G licenses to three major telecom providers for commercial use in June 2019, setting the stage for it to be adopted in a wide range of technologies, such as augmented reality, virtual reality and autonomous vehicles.
JD Logistics unveiled its first 5G-powered smart logistics park in Beijing on October 28 and is now developing a second site in Shanghai, according to Wang Zhenhui, the company’s CEO. With faster data transfer, 5G can offer significant benefits to supply chain operations:
- 5G increases the efficiency of the IIoT, thus improving facility management and enabling large-scale fulfillment capacity.
- 5G facilitates instant communication between human employees and smart machines.
- 5G enables real-time monitoring of forklifts and pallets, for which it is then possible to automate alerts for abnormal activity.
- Communicating with vehicles, 5G can offer parking and loading monitoring and guidance.
A Changing Consumer Landscape and Greater Demand in China Are Driving Digital Upgrades in the Supply Chain
To expand their footprint, it is becoming crucial for businesses to connect with different consumer segments, including younger generations and lower-tier cities. However, Zhang Jue, CIO of manufacturing company Mengniu Dairy, and Razat Gaurav, CEO of software development company LLamasoft, both noted at the summit that Chinese consumers have high expectations for the fast delivery of goods and services. Speedy and enhanced delivery services can be achieved through digitalized and integrated supply chain systems backed by technologies such as blockchain, big data, IoT, cloud computing and artificial intelligence.
JD Logistics is an industry leader in implementing smart supply chain solutions. The company operates 25 “Asia No.1” automated fulfillment centers in Asia and is able to deliver over 90% of orders on the same or next day to consumers. To expand its delivery capacity in lower-tier cities, JD has been leveraging its physical stores as warehouses and building smart delivery stations.
The Digital Supply Chain Empowers the Transformation of the IIoT
The IIoT refers to the implementation of technology in traditional industrial applications. Zhenhui noted that 40% of JD Logistics’ revenue came from third-party partners in its most recent quarter. He added that there remains ample opportunity for efficiency improvement in traditional industries, for which supply chain digitalization serves as a starting point.
JD Logistics announced the launch of its Open Platform for Digital Supply Chain (OPDS) with enterprise partners, which aims to enhance the efficiency and transparency of supply chains in traditional industries:
- JD’s cold chain logistics network reduces the required frequency of transportation and provides real-time monitoring of the entire food transportation process in order to guarantee temperature control and food quality. Automated sorting equipment in the company’s cold warehouses also increases efficiency.
- JD Logistics employs smart warehouse management techniques that are particularly useful for home appliance manufacturers, as oversized products can present problems for typical supply chains. The OPDS offers improved inventory turnover and faster delivery, direct from manufacturers to customers.
Building a More Sustainable Supply Chain Is Becoming a Major Focus
According to Danil Kerimi, Head of the World Economic Forum China, the environmental impact of greenhouse gas emissions through the supply chain is huge and is becoming a major focus for companies across multiple industries.
JD Logistics strives to make its supply chain more sustainable by utilizing a roof-mounted photovoltaic power-generation system in its warehouses, which reduces carbon dioxide emissions. The company is also continuing to deploy electric vehicles as delivery trucks.
JD Logistics uses reusable, environmentally friendly delivery boxes in 30 cities in China.