“Zero Inventory” is achieved, JD.com builds a complete smart supply chain

[51CTO.com original article] JD.com CEO Liu Qiangdong recently said that the fourth business revolution represented by artificial intelligence is coming, and JD.com will build a world-leading intelligent business entity in the next 12 years. Liu Qiangdong revealed at the time that through the supply chain management of intelligent business, JD.com will be able to assign an artificial intelligence "old buyer" to each product in stock in the future.

At the JD Y Division Strategic Conference held on March 2 with the theme of "Technology Retail, Smart Winning the Future", Liu Qiangdong's "Smart Business - Supply Chain" was explained in detail: starting from consumer insights, using big data and artificial intelligence technology, integrating JD's retail experience over the past 12 years, and working with partners from all parties to create an agile, intelligent, and open retail supply chain, constantly meeting the ever-changing expectations of users, and sharing the quality of life in the consumer era. On the morning of the same day, JD Y Division officially released the " Y-SMART SC " JD smart supply chain strategy, focusing on the four driving forces of data mining, artificial intelligence, process reengineering, and technology-driven, to form a smart supply chain solution covering the five major areas of "commodity, price, planning, inventory, and collaboration".

JD.com revealed that by the end of 2017 , it is expected that automated product replenishment will cover more than 80% of purchasing scenarios in core categories ; more than 80% of daily non-promotional price adjustments can be handled automatically by the system ; at the same time, hundreds of companies will be connected to the open JD.com smart supply chain system to comprehensively enhance its smart operation capabilities.

Yu Yongli , vice president of JD.com and head of Y Division, said that the current chain consisting of brand manufacturers and agents has become more complicated than before, and the management cost is increasing. In the traditional model, procurement and sales personnel rely on data and their own experience to complete complex tasks such as product selection, procurement plan formulation, price setting, inventory management, etc. As the scale of e-commerce expands, the types of goods that each procurement and sales personnel need to manage continue to increase, and the amount of data they face is also becoming increasingly large. To achieve fine management, more energy and resources must be invested. If accurate and efficient supply chain management cannot be carried out, it will not only reduce the competitiveness of retail enterprises, but also reduce the efficiency of the industry, including upstream manufacturing enterprises.

Yu Yongli said that Y Division will stimulate the potential of retail supply chain management efficiency from the two dimensions of technology and talent to cope with these new challenges. In 2017 , Y Division will focus on the application of system-automated product replenishment in JD Retail . The automatic replenishment system will cover more than 80% of the procurement scenarios in the four categories of consumer goods, clothing and home furnishings, large appliances, and 3C digital products. By the end of 2017 , unsupervised fully automated procurement orders in the two categories of consumer goods and clothing and home furnishings will account for more than 50% . At the same time, Y Division will promote the application of automatic pricing in long-tail products of all categories of JD.com, and plans to achieve that more than 80% of daily non-promotional price adjustments can be automatically processed by the system by the end of the year. Supporting the commercial prediction capabilities of big data behind automated inventory management and automatic pricing management, based on JD.com's online sales data for several years, artificial intelligence algorithms will help JD.com better select products, optimize prices and balance inventory. In 2017 , Y Division will help the Consumer Goods Division establish a big data product selection decision platform covering core categories. As of now, the platform has been built and will be officially launched in March .

Yu Yongli introduced the " Y-SMART SC " JD smart supply chain strategy, the core of which is to solve the problems of "what to sell, how to sell, how much to sell, and where to put". Focusing on the four driving forces of data mining, artificial intelligence, process reengineering and technology-driven, JD integrates and forms smart supply chain solutions in the five major areas of "commodity, price, plan, inventory, and collaboration", using technology to help JD Mall and its partners optimize the supply chain.

Supply chain management is the core of retail, and many people think it is a highly professional and mysterious job. In the traditional model, buyers and sales personnel have to rely on data and their own experience to complete complex tasks such as product selection, procurement plan formulation, price setting, inventory management, etc. With the rapid expansion of e-commerce, the types of goods that each buyer and sales personnel need to manage are increasing, and the amount of data they face is also becoming increasingly large. To achieve fine management, more energy and resources must be invested. If accurate and efficient supply chain management cannot be carried out, it will not only reduce the competitiveness of retail enterprises, but also reduce the efficiency of the industry, including upstream manufacturing enterprises.

JD.com also announced that it will join hands with professional partners in the supply chain field to establish the "JD Supply Chain Academy", aiming to make JD.com the company with the largest number of professional retail supply chain talents in China within three years.

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