Since the comprehensive transformation to technology was first proposed in early 2017, the time turns to the end of 2021. JD’s technology transformation has gone through nearly five years.
In the past five years, JD has experienced the old and new replacement of internal organizations and personnel, as well as the unlimited scenery of greatly promoting the digital outbreak. It has been burdened with the supply chain burden of ensuring the first-line medical materials and people’s livelihood supplies at an extraordinary time of the epidemic, and has also set a record of promoting the IPO of many unicorns within a few months.
But these changes are only the “floating light” on the surface. Continuous and firm technology investment is the profound main line of JD in the past five years. From the beginning of 2017 to the third quarter of this year, JD has invested nearly 75 billion yuan in technology. At the beginning of 2021, JD reorganized and established JD technology group to strengthen JD cloud business and comprehensively sprint into the future of technology. JD cloud has also become the core brand of JD group in providing technical services to the outside world.
Five years of continuous investment has also brought harvest to JD. Recently, Jingdong officially announced the report card of Jingdong technology in 2021: in the last year, Jingdong system published more than 220 papers at major international top academic conferences, won more than 60 authoritative competition awards at home and abroad, and created more than 260 technological breakthroughs and application innovations.
In addition, it has driven nearly 10 million self operated commodities to achieve a world-class inventory turnover of nearly 30 days, delivered minutes in more than 300 cities across the country, and provided digital intelligence services to more than 1500 large enterprises such as BAIC, Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Shaanxi coal transportation and marketing, Sany Heavy Industry Co.Ltd(600031) … JD technology has made numerous technical achievements in the past year from supporting internal business to external output.
Different from the past few years, many Jingdong technicians began to taste the phased sweet fruit of technology transformation this year.
“From our continuous investment in technology to the beginning of technology’s contribution to revenue, this is the turning point.” Venus, who has been deeply engaged in Jingdong’s technology products for eight years, sighed, “I believe that with our in-depth understanding of various industries, Jingdong’s technology can provide high-quality solutions and services for more industries and enterprises. Technology driven leads the global efficient circulation and sustainable development, which is the driving force for us to stick to it.”
top breakthrough
Nearly 10 million self operated SKUs are rotated every 30 days, which is a world-class achievement achieved by JD in the third quarter of this year. In contrast, Costco, a global retail giant known for its operational efficiency, has only thousands of SKUs, although the inventory turnover days have also reached about 30 days.
Vertically, in the past five quarters, JD’s inventory turnover days continued to make a breakthrough. In the third quarter of last year, this figure was 34.3 days. Now, JD has compressed this figure for about 4 days again within a year.
The significance behind the numbers is far-reaching. In fact, each reduction in inventory turnover days not only means that the time from warehousing to emptying of JD products is shortened and the operation efficiency is improved, but also means that the merchant’s payback period is shortened and the perception of consumers’ demand is more obvious.
“In terms of efficiency, we have achieved a breakthrough in turnover this year and consolidated our position as a global leader we have been aiming at.” When reviewing the highlights of JD smart supply chain this year, Hao Hu, head of supply chain R & D Department of JD retail smart supply chain y business department, said.
According to Hao Hu, the improvement of JD’s inventory turnover depends on the optimization of five aspects, including inventory mode, warehouse distribution network, planning system, operation automation and supply stability, which are driven by technology.
For example, in terms of inventory mode, JD has expanded from self operated central warehouse delivery mode to Omni channel performance mode, connecting with offline stores and supplier inventory, so as to complete performance by using socialized inventory. In terms of warehouse distribution system, JD has optimized the warehouse distribution network structure from suppliers to JD itself, thus greatly reducing the overall inventory deployment cost.
At the same time, this year, JD will fully connect with all-round planning systems from procurement, sales, collaboration with suppliers, and even logistics order quantity and operation, so as to improve the planning accuracy to more than 90%, so as to make the whole back-end goods preparation and operation more accurate.
In addition, this year, y business department completed the digitization of all supply processes of JD retail, the proportion of automatic replenishment exceeded 85%, and made a breakthrough in end-to-end automatic replenishment technology. The super automation technology of supply chain, which expanded from procurement internal distribution automation to whole process automation, also entered the landing link this year. In addition, a lot of collaboration with suppliers is carried out to ensure the stability of supply, so as to achieve a world-class breakthrough in inventory turnover.
On the other hand, the super inventory turnover is also inseparable from JD’s efficient performance ability. As of the third quarter of this year, JD logistics has operated 1300 warehouses, with an increase of about 500 warehouses in a year, with a total storage area of more than 23 million square meters. During the “11.11” period of this year, JD has achieved accurate prediction of the whole link of the intelligent supply chain, with an average of 95%. Express delivery in more than 300 cities in China can reach in minutes. JD has achieved in 92% of districts, counties and 83% of townships and towns in 24 hours. This speed has also attracted the attention of the industry.
“Looking at China, only JD logistics has an integrated supply chain solution.” Jam Zhe, head of JD Logistics Intelligent supply chain platform innovation business, pointed out that the so-called “integration” can not only provide a comprehensive solution of supply chain strategy planning planning execution based on data and algorithms in the digital world, but also provide integrated support from solution to landing operation in the physical world, so as to truly help customers improve the spot rate Achieve high-quality growth by achieving the objectives of faster inventory turnover, improved performance efficiency and reduced operating costs.
According to jam Zhe, as early as 2015, JD logistics technology began to independently develop an intelligent warehousing system integrating software and hardware. Now, the system has broken through key technologies such as large-scale Siasun Robot&Automation Co.Ltd(300024) intelligent scheduling, task optimization deployment and warehousing Siasun Robot&Automation Co.Ltd(300024) R & D, and has become a model for the intellectualization of large-scale e-commerce warehousing and logistics centers, And won the first prize of 2020 Beijing Science and Technology Progress Award .
technical harvest period
The top breakthroughs in the technology field are only one side of JD’s technical achievements this year. From another perspective, this year is also the node of JD’s technology from the input period to the harvest period.
According to Hao Hu, as the representative of JD retail intelligent supply chain technology and service capability, y business department conducted a preliminary verification of the technical service business model this year. In his opinion, next year will be the “first year of opening” of Y business department.
“In the past year, we have cooperated with more than 1200 brands in the supply chain, and our technical capabilities and services have been initially recognized by customers. At the same time, we have also jointly optimized the overall supply chain quality with our partners,” Hao Hu said. From this perspective, our external technical services have been verified in the past year.
The cooperation with Hisense Group is an example. JD and Hisense jointly form a joint planning system, and their collaborative goal is to generate orders through plan driven intelligent replenishment. in such a planning system, JD delivers the predicted demand plan to the production end of Hisense in advance to help the latter make more reasonable production scheduling, production and resource reserve plans.
Through the in-depth collaboration of the supply chain, such as planning collaboration, purchase, allocation and return data collaboration, inventory layout optimization, the results are quite remarkable. At present, the system optimizes the maximum inventory turnover days of relevant categories by 9.9 days, reduces unsalable inventory by 27.6%, and improves the spot rate by 4.2%.
For JD logistics technology, in the past year, it has also been decoupling technical capabilities and building a customer-oriented b-end open system. With the help of the integrated supply chain, JD logistics effectively helps customers achieve the goals of improving the spot rate, accelerating inventory turnover, improving performance efficiency and reducing operating costs. At present, it serves about 200000 enterprise customers. In the third quarter, the proportion of external customer revenue of JD logistics continued to exceed 50%, and reached a new high in this quarter.
“Decoupling is to quickly meet the personalized needs of more industries. At the same time, we are also serving various external customers from a series of b-end systems before sales, sales, product solutions and after-sales. This system has also taken shape.” Jam zhe pointed out, “in the process of cooperation with Amway, we have provided it with a full range of services, including business flow, logistics warehouse distribution integration, supply chain planning, all-channel integration, etc., so as to help customers reduce costs, increase efficiency and enhance added value.”
as the representative of JD retail’s external output, JD retail cloud has also gained a lot in the past year relying on JD retail’s advanced and mature technical capabilities. “we focus on the three major tracks of data platform and products, digital intelligence supply chain and digital intelligence trading, carry out commercialization empowerment externally, and provide full stack, integrated and end-to-end technical support and services for Pan retail customers, including retailers, brands, manufacturers, state-owned enterprises, public, cross-border and local life providers.” Jiangong, vice president of JD retail cloud, said.
Jiangong said that the main goal of JD retail cloud in 2021 is to sort out replicable capabilities and create benchmark customers. At present, six products and ten scenarios have been formed in three tracks. At the same time, benchmark customers have been established in each product line and phased delivery has been completed.
For example, in the process of cooperation with BAIC group, JD retail cloud has achieved phase I delivery, helped BAIC build its own online trading mall, and realized the whole process of digital car purchase experience from platform ordering to offline car collection. Now both sides are planning phase II. At the same time, the “Ka mall” capability precipitated by Jingdong retail for many years will serve customers such as Yibin and Jingdezhen, Jiangxi, and continuously precipitate products in the process of model replication to respond to customer needs more quickly.
“This year is a period of rapid growth of our business. The overall business development shows a good trend. It is expected that we will make great breakthroughs in each track next year.” Jiangong said.
In fact, in the cooperation with BAIC, in addition to helping build an online trading mall, JD cloud also built a hybrid industrial cloud with Baic Bluepark New Energy Technology Co.Ltd(600733) to save 50% of the latter’s it cost.
In the view of industry insiders, the attribute of JD industrial Internet enables JD cloud to have a closer and close insight into the production links, superimpose retail, logistics, finance and technology services, and continuously promote the process of promoting the digital intelligence upgrading of thousands of industries at the same time of the growth of internal service retail, logistics and other businesses through technology and product innovation.
Taking the digitization and intellectualization of the retail industry as an example, relying on a series of solutions such as artificial intelligence, blockchain, IOT and c2m, JD cloud helped the dairy industry extend the sales of dairy products to production and development at the production end, smart pasture and cold chain transportation at the circulation end, and worked together to establish a whole chain intelligent operation system to accelerate the upgrading and iteration of dairy products.
In the manufacturing industry, JD cloud is building an intelligent factory with a well-known 3C electronic parts manufacturing enterprise in the Yangtze River Delta through the intelligent manufacturing cloud solution, which greatly reduces the production cost by arranging flexible production lines. At the same time, the quality inspection speed is improved by nearly 15 times by using AI quality inspection, the quality management error rate is reduced by more than 99%, and the error rate is far lower than that of manual work.
By the end of 2021, JD cloud has provided digital solutions for 70 cities, including cities, finance, retail, logistics, energy, manufacturing, transportation and other fields, more than 800 financial institutions, more than 1500 large enterprises and more than 1.5 million small, medium and micro enterprises, helping to realize digital transformation and upgrading.
Behind these numbers is the inevitable result of the future of sprint technology. In terms of innovation, JD cloud attracted much attention in the industry in 2021 by releasing the industry’s first hybrid cloud operating system JD cloud ship , which pushed the management of hybrid cloud to the operating system level for the first time, and realized comprehensive and thorough unified management and scheduling of digital infrastructure.
Jingdong exploration and Research Institute, which has been established for more than one year, is also constantly exporting “increment” of technology for Jingdong group. Through the research layout of “3 + 7” (three cutting-edge research of super deep learning, trusted artificial intelligence and quantum machine learning + Research on machine vision, natural language processing, intelligent city, supply chain management, logistics warehousing, autonomous system and intelligent retail application) , it has made a number of technological breakthroughs.
For example, in December 2021, the “Weaver Girl” model jointly built by JD exploration and Research Institute and the University of Sydney surpassed humans for the first time and ranked first among all participating institutions in the two challenging tasks of the common language understanding evaluation benchmark (glue). This confirms the global leading position of Jingdong exploration and Research Institute in the field of super deep learning.
intelligent supply chain “national team”
JD’s continuous investment in technology has formed the current leading intelligent supply chain capability. Not only within JD, JD’s supply chain capability is also playing an irreplaceable role in a large number of partners and rich scenarios covering the industrial chain.
Relying on the ecological platform and technical strength of Jingdong group, Jingdong was selected into the list of national artificial intelligence open innovation platforms of the Ministry of science and technology in 2019, undertaking the important task of building a national “new generation intelligent supply chain artificial intelligence open innovation platform”, and calling it “intelligent supply chain National team” worthy of its name.
During the covid-19 epidemic since the beginning of 2020, JD has played an irreplaceable role as the “national team” of intelligent supply chain. Its self built supply chain system and logistics warehouse distribution system respond to and assume the supply guarantee of a large number of medical and epidemic prevention materials and people’s livelihood needs at the very moment when the traditional supply chain network transportation is suddenly interrupted.
Jingdong’s role is far more than reflected in the special event of the epidemic. On July 20 this year, Henan suffered the once-in-a-century rainstorm, destroyed infrastructure in many places, and severely damaged people’s livelihood and living materials. JD responded immediately and urgently allocated a large number of flood control materials and living materials to the affected areas. Its first batch of rescue materials arrived in the disaster area at noon on the 21st.
This is not only the capacity of infrastructure, but also the value of technological innovation. “As a fully controlled and highly effective supply system, JD can respond to changes at critical moments, respond to the needs of society and National People’s livelihood, and ensure supply efficiently and smoothly, which highly reflects JD’s positioning as a national team of intelligent supply chain.” Hao Hu said bluntly.
Ensuring the stability and smoothness of the supply chain is just a role of JD as the “national team of intelligent supply chain”. By opening up its supply chain and logistics capabilities to the outside world, JD is still trying to reshape and improve the industry’s supply chain capabilities.
In fact, at present, the proportion of China’s socialized logistics cost in GDP has decreased from 18.4% in 2007 to 14.7%, but horizontally, China’s supply chain capacity still has a lot of room to improve. According to the data, logistics costs account for about 8% of GDP in developed countries in Europe and America. JD believes that through the construction of digital intelligent social supply chain, it can work with partners to reduce this figure to less than 10% in the next decade, comparable to developed countries such as Europe, America and so on.
In this context, the national new generation of intelligent supply chain artificial intelligence open innovation platform came into being.
“The goal of the new generation of intelligent supply chain artificial intelligence open innovation platform is to create an efficient supply chain infrastructure to serve the whole link from production, circulation to consumption, so as to improve the overall efficiency of the industry.” Hao Hu said that in the platform, JD, as the main leader, first greatly promoted the supply chain coordination between the production end and the supply end this year, and then upgraded the supply end through c2m reverse customization, which greatly improved the speed and success rate of new product development.
In addition, JD has also contributed a large number of inventory optimization algorithms to the new generation of intelligent supply chain artificial intelligence open innovation platform, and even made breakthroughs around some “neck” technologies, such as end-to-end automatic replenishment technology.
“In the past, inventory management was usually divided into two steps. First, it was necessary to estimate demand, make demand forecast, and then formulate models according to demand, existing inventory and supplier conditions. However, such a two-step approach usually caused inevitable structural errors,” Hao Hu explained, “End to end automatic replenishment technology is to change two steps into one step through in-depth learning, so as to improve the degree of decision automation and accuracy.”
According to the relevant person in charge of JD group, at present, the new generation of intelligent supply chain artificial intelligence open innovation platform has completed the main content of the overall framework, the basic layer has completed the layout of basic resources such as public cloud computing power, JD desensitization data and six AI algorithms, opened some components around the core links of the supply chain, opened 9 billion API calls per day, and the scene layer focuses on production There are more than 200 integrated innovative applications in the circulation and service links, forming a preliminary ecology through ecological cooperation, and carrying out supply chain innovation cooperation with more than 20 brands such as Mengniu, Gree, GM Wuling, China Meheco Group Co.Ltd(600056) , Sanjiu medicine, Xinhua Bookstore, P & G and Philips.
technical craftsman
The only way to improve the modernization level of industrial chain and supply chain is “innovation”. In order to realize the safety and stability of the industrial chain and supply chain, we must be independent and controllable.
At the central economic work conference held in December 2020, “enhancing the independent and controllable ability of the industrial chain supply chain” was put in the second important position, and it was proposed to comprehensively promote the supplement of short plates and forged long plates in the new period of the 14th five year plan, implement key core technology research projects for industrial weak links, and solve a number of “neck sticking” problems as soon as possible. JD’s pursuit of supply chain innovation and independent control also responds to the current national requirements for supply chain.
Behind these, enterprises not only need to continue to invest a lot, but also need the long-term adherence of many technical “craftsmen”. Venus, who created JD Sirius system in the whole process, is such a “craftsman”.
As a self-developed intensive storage system of JD, Sirius system is mainly composed of hardware equipment and software systems such as multi-layer shuttle car, elevator, workstation and conveying system. At the same time, it cooperates with three-dimensional warehouse shuttle car. All equipment work together to meet high storage density and high inbound and outbound flow, and realize automatic goods to people picking.
The birth of Sirius system is a process from scratch. Since 2016, it has been developed for six years. Now, with the efforts of JD logistics hardware product team, Sirius system has iterated to the third generation. The latest generation of Sirius system can help improve the picking efficiency of the warehouse by 3-5 times, the picking accuracy to 99.99%, and the storage density per unit area by more than 3 times.
Venus said that in the first year of starting the project, Jingdong Logistics hardware product team independently designed shuttle cars, hoists and other core equipment, and put them into use in Jingdong in 2017, which is also the emergence of the first generation of Sirius. In 2018, the team carried out version iteration on the technical architecture and core equipment of Sirius system, thus improving the stability and efficiency of the product.
The newly released third-generation Sirius system this year is another improvement on the original basis. It should be noted that the third-generation Sirius is no longer limited to serving JD. It also begins to focus on the construction of infrastructure logistics facilities in various external industries, so as to increase more flexibility in equipment customization, modular design and component selection, so as to meet the needs of customers and scenarios in different industries.
In the continuous iteration of the system, JD is also accumulating its own independent R & D technology. According to Venus, the main controller of the second-generation Sirius system shuttle is a programmable logic controller (PLC), while the shuttle of the third-generation Sirius system adopts the main controller independently developed, which not only reduces the cost, but also improves the computing power and customizable flexibility, and greatly reduces the number of wiring in the installation process.
Venus believes that the so-called technical craftsman spirit is actually an attitude, a spirit of paying attention to details and continuously pursuing perfection, and this spirit exists in every engineer and person in the team.
“In the process of designing the three generations of Sirius, in order to improve the performance of the equipment, our mechanical engineers designed a lightweight body that attracted the attention of the industry. In order to improve efficiency, we optimized the operation rhythm of the equipment second by second. In order to pursue the ultimate storage density, we developed the dynamic storage management function; in order to further improve the maintainability and flexibility of the equipment, We have independently developed the main controller of the shuttle and the third generation communication protocol. ” Venus recalled, “these are the tip of the iceberg we have worked for many years, but none of them reflects the craftsmanship spirit of Jingdong technicians.”
Jingdong’s technological transformation is a microcosm of China in transition. The Xiongguan pass is really like iron. Now I’m stepping over from the beginning. The digital upgrading of the real economy is destined to be a marathon without shortcuts. It is precisely because of such a group of new entity enterprises dedicated to innovation and a group of assiduous “technical craftsmen” that China is firmly embarking on a long journey of transformation and upgrading.
(21st Century Business Herald)
