How to connect the "Ren Du Er Mai" of the supply chain in the rise of the logistics industry as a "gold medal player"?

How difficult is the automotive supply chain? On October 12th, Tesla CEO Elon Musk tweeted, "Production, supply chain, and logistics are too difficult!" Even this ambitious business genius has been plagued by various difficulties in the supply chain.

Especially for the automotive aftermarket supply chain that focuses on maintenance, parts replacement, and other services, this is especially true. The demand for parts is widely distributed, the number of SKUs is large, the price per piece is high, and the delivery time requirements are high. Therefore, there are stricter supply chain management standards in warehousing and transportation. As long as one link goes wrong, a series of chain effects will bring incalculable losses to the enterprise like a collapsing domino effect.

However, if there is danger, it is organic. Once the supply chain issues are firmly grasped and the "Ren Du Er Mai" is connected, the advantages of the supply chain will be internalized as an important guarantee for the competitiveness of the enterprise. Nowadays, a group of companies are standing out through their efforts in the supply chain.

1、 Is the supply chain difficult for Musk?

In 2021, the shadow of chip shortage and consumer structure reform continues to haunt the automotive industry, and competition in the automotive market has entered the "stock era" from the "incremental era", with industry chain profits gradually shifting to the aftermarket.

But the strongest perception of many car brands is that the automotive aftermarket is becoming increasingly difficult to do. The reason why it is difficult to do is simple. The key to doing a good job in the automotive aftermarket is how to use the smallest inventory and lowest cost to achieve the highest replenishment and distribution efficiency.

This is not a simple matter. Taking a certain car company as an example, user experience is a key point that they absolutely cannot ignore. Therefore, after timely delivery, a complete parts distribution system in after-sales service has always been one of their tricks to capture the hearts of customers. So, how to continuously refine and improve details in the supply chain? At this moment, it is evident that a more intelligent integrated supply chain system is needed to make a grand appearance.

As shown in the video above, in the automotive supply chain system, there is an intelligent "brain" that undertakes the difficult decision-making tasks of the planning layer - it can use algorithm models to clearly arrange the demand plan, replenishment plan, and allocation plan of each supply chain node, reducing inventory and management costs while minimizing resource waste.

In this supply chain system, there is also a set of flexible and advantageous "muscles and bones" that undertake highly reliable execution tasks - they can cover the hard power through the national warehouse network, turning the original 4 warehouses into 8 warehouses, making the warehouse location closer to the dealer's location, and enabling the fastest delivery from the nearest warehouse, matching the dealer's needs to the greatest extent possible, and greatly improving the delivery time of the dealer.

In addition, this supply chain system also comes with a set of practical "armor" - if customers choose other peripheral products when they arrive at the store, they can enjoy the same service as shopping on the JD platform. Not only can they be delivered to their homes, but they can also check the transparent logistics information at any time, and urgent orders can be easily delivered the next day.

As can be seen, this supply chain system is like an intelligent steward who can observe all directions and listen to all directions. It can use digital and intelligent technology and strong capability support to help enterprises find the perfect answer to the spare parts supply chain at multiple levels, achieve cost reduction and efficiency improvement, and carry out supply chain control and management in a more orderly and reasonable manner. Nowadays, this new supply chain system is restructuring the entire business system.

2、 The crisis has arrived, how can we break through?

In fact, the continuous updating of supply chain models is no longer limited to the automotive industry. At the beginning of last year's outbreak of the pandemic, the chaotic situation of supply chains across the world suddenly coming to a halt is still vividly remembered, and the increasingly severe congestion in US ports is exacerbating global inflationary pressures and dragging down economic recovery. Given the complexity, severity, and non temporary nature of the supply chain crisis, its fundamental cause is no longer solely due to the black swan event of the pandemic. The entire industry itself needs to comprehensively update its existing supply chain system.

On the other hand, live streaming e-commerce has given rise to a new round of shopping frenzy, with consumers increasingly relying on online consumption channels and placing higher demands on the supply chain of merchants and platforms. Nowadays, the traditional supply chain sequence has been disrupted, and the research and development, production, marketing, logistics, and other activities of enterprises will be driven by customer demand and decision-making basis. Therefore, macro environment, technological development, and consumer demands are driving the continuous evolution and upgrading of the supply chain system, and more and more players are actively participating in this urgent transformation.

The voice from within the enterprise lies in competitiveness. In the prosperous market where new brands emerge one after another and old brands actively transform, a large number of newborn calves have flooded into every industry. They are competing for products, marketing, and supply chain, and supply chain has become an important weapon for major brands to seize consumers. In the new consumer era of rapid product iteration and updates, competition among major brands in the supply chain has entered a white hot stage, and mid to late stage capabilities such as supply chain management have become important factors for enterprises to run out of the race track.

3、 Who is a 'gold medal agent'?

As a "gold medal player" in the domestic supply chain field, JD Logistics has long been aware of the demand for supply chain service transformation in different industries. Through serving JD Group and external customers, as well as reaching billions of C-end consumers, they have established a deep understanding of business flow and industry insights. These experiences and accumulations are helping them continuously optimize algorithms and strengthen their ability to analyze optimal inventory. JD Logistics utilizes this algorithm to help customers optimize warehouse quantities, achieve optimal inventory allocation and levels, and effectively improve supply chain management efficiency.

Nowadays, over 200000 corporate customers have felt the charm of integrated supply chains.

In the field of clothing, with the increasing demand for personalized and diversified products, the frequency of new products is getting faster and faster. At the same time, inventory pressure is also rising, and direct logistics models to consumers have become a trend. Taking the cooperation between an internationally renowned footwear brand and JD Logistics as an example, since the two sides started their cooperation in 2019, JD Logistics has helped the brand re plan its warehousing network by analyzing consumer demand and sales data. It has upgraded the previously independent warehouses based on product categories to a central warehouse+omni channel integrated warehouse solution, and dynamically configured each warehouse's products through digital tools; After the upgrade, the brand's e-commerce logistics costs decreased by 11%, and the average delivery time also decreased by about 5 hours.

A good supply chain has one characteristic: agility. Understand customer needs faster and more accurately than others, while having the ability to integrate resources from different organizations and quickly configure supply chain capabilities.

This feature is particularly evident in JD Logistics' integrated supply chain services.

JD Logistics CEO Yu Rui once stated that from the perspective of the supply chain, JD Logistics' "integrated supply chain" is thinking about how to help customers achieve global optimization, rather than local optimization. Global optimality refers to JD Logistics participating in the entire decision-making process of customers, examining each link from a supply chain perspective, with the aim of improving efficiency and reducing costs.

Simply put, if a traditional logistics company acts as a "second party" and provides standardized logistics services in all aspects, JD Logistics wants to become a "partner" for enterprises, not only providing logistics services, but also helping enterprises achieve new growth from the perspective of the overall supply chain.

Nowadays, integrated supply chain is not only an important logistics infrastructure, but also an emerging market blue ocean with huge market imagination space. In 2020, the scale of China's integrated supply chain market reached 2 trillion yuan, with an expected CAGR of about 10% in the next 5 years. The overall outbreak of the integrated supply chain track is just around the corner.

As a leading enterprise in integrated supply chain, JD Logistics has experienced rapid growth in external customers in recent years. More and more companies in the market have realized the importance of integrated supply chain, and integrated supply chain is gradually restructuring the market supply chain system.

4、 Conclusion

Faster, more precise, smarter, and more complete, integrated supply chains are opening up a new imaginative space for the market. Under the new supply chain system, every industry may usher in a new round of upward mobility.