Why does the supply chain need to undergo digital transformation?

Why does the supply chain need to undergo digital transformation? The supply chain is a complete one. In the face of the epidemic, the problem of resumption of work has troubled many companies, and funds A series of issues such as chains, supply chains, and personnel arrangements are gradually emerging. China's development has entered a new era. The full coverage of the Internet has brought people's lives into a new form. Let's learn why the supply chain needs to undergo digital transformation and related information. Why the supply chain needs digital transformation 1

Almost all industries are undergoing digital transformation, which has facilitated millions of people and solved the "last mile" problem in the transportation industry. Online ride-hailing is subverting the tradition. the taxi industry; in the banking industry, traditional banks have to bear the pressure of huge challenges from financial technology companies. If you compare a company that is very advanced through data with a company that is still mechanized or even still at a labor-intensive level, it is obvious who has a greater advantage.

Retail companies are now facing a greatly changing business environment. If they cannot find ways to bring a good experience to customers in a timely manner, they will not be able to adapt and integrate into the supply chain as soon as possible, and effective system management will not be implemented. Seriously impact the value output of the supply chain. Therefore, during critical periods, it is particularly important to improve the sophistication of an enterprise's supply chain.

How to carry out digital transformation?

1. In the era of win-win cooperation, it is necessary to drive upstream and downstream partners to open up data information. This is the foundation. Building a digital supply chain requires obtaining different data in the supply chain, otherwise it will not be possible to achieve the goal. Digital supply chain transformation.

2. It is necessary to design a reasonable process. Big data analysis is generally used to improve inventory management, quality management, and employee management. Big data can feed back accurate information to the enterprise, including planned production and order quantity. etc., allowing enterprises to discover their shortcomings more quickly and stimulate their motivation.

3. Consumers should be the center. The advantage and purpose of digitalization is to be fast and accurate. By predicting and sensing consumer needs, this is the primary issue in digital transformation. First, we must collect a large number of consumer data. After detailed analysis of the data, products can be optimized, reclassified, and distributed to sales points. By using big data, you can analyze the global supply chain and gain a broader understanding of customer needs, and you can occupy the position of an industry giant.

Supply chain digitization is the development trend of the modern era. Digital reform is inevitable for every industry. With the rapid development of economy and technology, digital information technology will highly penetrate into our daily lives. Supply chain The road to chain digital transformation is worth looking forward to. Why the supply chain needs to undergo digital transformation 2

1. The environment dictates that transaction and interactive intelligence trigger digital innovation

With the development of mobile Internet, cloud computing, and artificial intelligence technology, society Environmental changes are accelerating, spurring demands for digital innovations such as zero-contact, cloud consumption, unmanned self-service, and intelligent automation. In an intelligent environment, if enterprises want to obtain better development opportunities, they must adapt to the environment of the times and use new tools and technologies. Technology is used to realize the connection with social elements. The so-called natural selection and survival of the fittest, this rule still applies.

2. Technological innovation, digital technology empowers the development of new links and new models

The development of technology, especially the development and improvement of digital technology, provides digital integration, resource flow, and value The shared technology base provides more possibilities and implementation foundations for enterprises’ digital transformation. Even enterprises that do not understand digitalization can partially realize digital transformation by combining existing common technical means and tools, allowing enterprises to Not to fall behind.

Not all enterprises have sufficient technical capabilities and financial strength. Therefore, in an era of digital transformation and relatively high technical requirements, there are many common technical means and enabling technical mechanisms that can be used. to the digital transformation of enterprises.

For example, although the digital empowerment systems of major Internet companies are trapped within their ecosystems, at least companies can appreciate the advantages and efficiency of digitalization, and allow companies to live within the ecosystem. It is more directional and targeted, and is also applicable to manufacturing companies on the supply chain side.

3. Consumption upgrade: Upgrading of consumption awareness and behavior stimulates the value of data

The rapid development of China’s economy has brought about the acceleration of consumption upgrade. Consumption upgrade It will bring changes in consumption personalization and fully release personality. In the future, consumers will be more willing to pay for experience, environment, emotion and services; consumption upgrades will also make consumers pay more attention to consumption of spiritual attributes, based on the construction of emotional content and the production of goods. Created to better meet emotionally driven consumption;

With the increase in product richness, consumers are pursuing higher cost performance, live streaming, Xiaohongshu, Pinduoduo and other new consumption The rise of the model further requires enterprises to have an in-depth understanding of consumers. Consumption personalization, demand upgrading, and demand mining accelerate the deepening of data value.

4. Development Concept: Value Orientation Triggers Enterprise Digital Transformation and Innovation

Changes lead to generalization, and generalizations lead to survival. Today, many enterprises actively require digital means to break through development bottlenecks and difficulties, "Anti-Fragile" There is a saying in a book, "Glass is a dead thing, and living things like volatility. The best way to verify whether you are alive is to verify whether you like change. Remember, if you don't feel hungry. < /p>

If you don’t work hard, the results will be meaningless. In the same way, if you don’t experience pain, you won’t know joy, and if you don’t experience hardship, your faith will not be strong. Deprived of personal risk, the nourishment of an ethical life is meaningless.”

When we accept the values ????of this passage, we understand that the corporate and personal environment will always be full of challenges. Whether it is good or bad, only by actively embracing changes and adapting to them can we better adapt to this era. The current digital transformation of enterprises is a manifestation of their anti-fragile capabilities. Why supply chain needs digital transformation 3

Digital era! The Importance of FMCG Omni-Channel Supply Chain Transformation

1. Informatization vs. digitalization, do we understand it clearly?

I believe that many of my friends have come from other places. It is not easy for everyone to be able to gather at today’s venue.

I would like to talk to you about the definition of "digitalization" first, because many times, we confuse "digitalization" and "informationization" together.

Let me take fireworks and typhoons as an example. As a public transport user, my customer experience when I came to Shanghai for a meeting this time was not very good. I was particularly anxious because The organizing committee arranged for my speech to be relatively early. I felt that I had a heavy responsibility and must not delay this matter, so I started to pay attention to my flight status a few days ago.

How far have I come? Yesterday I asked the organizing committee to book a high-speed rail ticket for me as an alternative. This morning I felt it was still not safe, so I contacted one of my representatives from China Eastern Airlines. My friend, he is a captain of China Eastern Airlines. I sent him a WeChat message and asked him how the weather is in Shanghai. By chance, the plane he flew was exactly the one I was going to take. I started asking him since the morning. Did it take off normally? How is the weather? Can it be on time?

What is the problem I want to illustrate with this example? I want to say that knowing an airline captain is really something worth showing off at a critical moment. I would also like to say that today we have achieved a large degree of informatization, but in many scenarios, information flow still lags behind logistics, and we still have a lot of room for improvement.

Okay, let’s continue talking about typhoons. Now let’s switch the camera to the Meteorological Bureau. On the big screen of the Meteorological Bureau, various typhoon trends monitored by satellites are projected, including wind strength and wind direction. , these factors of wind speed.

Then it is recorded in the system through a series of manual or automatic transmission methods. There is a lot of key information on this large screen, which is what the Meteorological Bureau is most concerned about. Then the staff sitting in front of the computer screen, After seeing these core information, such as how strong the wind force is, what level of response should be activated, and the relevant departments need to be notified to activate emergency plans, etc.

For us logistics people, do we often see the digital large screens that are particularly popular nowadays? Me too, when I visit suppliers on-site, I am often taken to their digital screens to see various KPIs, such as the number of vehicles in transit, vehicle distribution, abnormal numbers, etc. Our company also has such a digital screen , later I discovered that this large screen, except for the boss, didn’t really look at much. Everyone’s daily focus was on daily vehicle grouping, dispatching, scheduling, reconciliation, and settlement.

Everyone can feel immersed in the situation. With information technology alone, as an end user, is our experience good enough?

So what is digitalization? Digitalization is upgraded informatization, which is higher than informatization. Where is the height? Digitalization has added algorithms, models, game rules, and the Internet of Everything. Digitalization has involved more people and equipment.

Following our typhoon example, let’s do a thought experiment. For example, “Honglu Zongheng” was upgraded to “Wanlv Zongheng”, which combines sea, land and air multimodal transport. All network information is linked in full volume and in all elements.

It is connected and can give "travel suggestions" in real time according to the different parameters of each person's needs. For example, if the flight is delayed due to weather reasons, if you change to other modes of transportation such as railways, cars, etc., which band is most suitable? , how long it takes, etc. Finally, the user can change the itinerary with one click in the "solution" given by the system.

To summarize, the end point of informatization is actually the decision-maker, which provides the necessary materials for the decision-maker. The decision-maker looks at these materials to make the next strategic decision.

The end point of digitalization is direct action, not directed at one or two decision-makers.

2. How does digitalization confront or crack the "impossible triangle" of the industrial age?

First of all, what is the "impossible triangle" of the industrial age? The greatest benefit that the industrial age has brought us is mechanization and large-scale production. If there is no difference between two companies in other aspects, then the core of everyone's competition is productivity. Whoever can produce more products per unit time and have more stable quality will win. Have stronger corporate competitiveness, right?

In the past many years, we have been studying the Six Sigema and lean production methodologies introduced from abroad to China, in order to further improve the efficiency of mass production and eliminate waste in the production process and technology.

But this kind of excellence is just like running. Athletes focus on every movement. The speed keeps accelerating, and it reaches a limit, a ceiling. In the process of continuous improvement of production efficiency in the industrial age, Gradually, an impossible triangle was formed, that is, the product is good, the service is good, and the cost is even lower.

In the industrial age, the formula of corporate profits is not difficult to understand. We always hope that sales prices will continue to increase. The lower the cost, the better, and the more products we produce and sell, the better.

I guess all my friends in the audience felt the same after hearing this. Our company is actually both Party A and Party B. In recent years, we have often asked our suppliers to reduce prices while ensuring service quality. We found that in the past few years, through bidding, the price still had room to go down. The further back, the water was squeezed out, the price could not go down, the business became more and more painful, and the service was sacrificed, which brought about greater internal and external management costs.

So can digitalization solve this problem?

As far as the formula of corporate profit just now is concerned, everything else remains unchanged. Digitalization adds one more factor for us, which is the number of turnovers.

To give a simple example, for our logistics company, isn’t it just how many trips a car can make in a day?

I will further give two examples of our company’s digitalization to illustrate how digitalization can break the impossible triangle of the industrial era. In fact, we finally answered a question about how important digital transformation is to enterprises.

Our warehouse in Shanghai is the largest warehouse in China, with more than 30,000 pallet spaces. We have carried out various optimizations in the past few years and found that the cost has been reduced to the point where it can no longer be reduced, and the efficiency The improvement mainly depends on increasing the number of people, from the original 40 to 60 people, and to 90 people in the peak season. The efficiency of people entering and exiting the warehouse can only reach the demand when the business peaks.

We began to design and build a B2B fully automated warehouse in 2017 with our three logistics parties. With a 24-meter high storage space, the space utilization rate increased by 4 times, and the operating efficiency was 1.3 times that of the traditional warehouse. , and built a new first-floor e-commerce and special channel modification workshop, reducing the total cost by 30%, laying the foundation for the growth needs of our business.

If we don’t make this kind of structural change and don’t do digital transformation, it will be difficult to rely on the original model to further improve. From shelf picking, sorting, to loading, operations are realized through WMS algorithms and human-machine integration, ultimately improving efficiency and reducing costs.

In the implementation of automated warehouses, we also designed the MTO model, which is to produce according to orders from e-commerce and special channels. This is a 2B+2C Omi Channel creation. We can combine SKUs according to customer order requirements and then package them, so there is no need to prepare goods in advance and accumulate inventory. We can meet and stimulate this part of consumers' needs in a targeted manner. This is actually a process of creating value.

Today’s world benefits from the large-scale production capabilities brought to us by the industrial era. In the digital era, we tailor products for each customer on an industrial scale.

Therefore, digital transformation can bring efficiency improvements, cost reductions, and create new value to enterprises. The sum of these three things is the competitiveness of enterprises. You can think about it, our Upstream suppliers and downstream customers are actually no different.

The difference lies in how to use digitalization to link everyone together more efficiently, making it easier, happier and safer for your upstream and downstream parties to do business. So, digitalization is no longer Relative competitiveness, but absolute competitiveness, will determine the ecological niche of an enterprise in an ecosystem.

Just imagine if your company has a revenue of 10 billion and 1,000 people. Revenue has doubled to 20 billion yuan, but the number of employees has not increased significantly. Has your company's competitiveness in the industry improved?

Mr. Ren of Huawei said something: three people do the work of five people and get paid by four people. I think this sums up this point very vividly.

3. How do we practice digital transformation from "skin" to "soul"?

Now let’s take a look at the aspects of digital transformation from the surface to the deep. The content of digital transformation can be interpreted from many dimensions. I refer to the "Huawei Digital Transformation Compulsory Course" content, I found one that is closest to our actual operation and would like to share it with you.

It is recommended that you scan what you can start doing based on your own company's situation to solve current pain points and improve customer experience.

Next, I will use an actual case of our logistics as an example.

Everyone knows the airport control tower. The control tower’s responsibility is to arrange the takeoff and landing of aircraft, reduce congestion, and maximize the use of runways, shuttle buses and corridor bridges.

In the past two years, we have been working on the "control tower of land transportation business". Let's take a look at what we have done in digital transformation for this land transportation control tower.

The first level is the superficial layer, called transaction mode (Transaction), which can be understood as our skin, the shallowest step.

It can be understood as a step as simple as "paying one hand and delivering the goods". Maybe before this step, we have done a lot of offline preparation work, communication, copywriting, But for the transaction step, we can implement it online, making the experience of both parties to the transaction better, more convenient, easier, and more efficient. Regarding the digitization of transaction models, I will list some examples related to our current project for your reference, such as bidding, goods handover, contract signing, and invoice processing.

After the superficial digitization, we will go deeper into the meat. The meat represents the operation model (Operation), which is the behavior that truly affects the operating efficiency of the enterprise. For our land transportation control tower, the digitization of this operation model includes formulating Transportation planning, route combination, customer appointment management, platform management, etc.

Taking a step deeper, we come to the skeleton. The so-called skeleton is the organizational model (Organization) of the enterprise.

For example, in our own logistics department, the previous organizational model was a bit like a vassal system. A factory or a warehouse was a vassal state, each of which had its own small team. When we After realizing the digitization of operations, we followed the end-to-end process of the entire logistics chain, from procurement, sourcing, and supplier selection to reconciliation and payment with suppliers. We cut the entire process into different paragraphs, or modules, and the plan was In charge of planning, vehicle assembly is in charge of vehicle assembly, and dispatching is in charge of dispatching. Each module is only responsible for its own part of the work and responsibilities, which is to transform the original logistics generalist into a detailed specialist.

Then each module works together on the same platform to complete one thing, which is "order delivery". So, everyone has discovered that the original vassal system has been broken and turned into a team collaboration system, and each module will gradually accumulate capabilities.

Then just like Transformers, whatever the organization needs to look like, it will be combined into what it looks like. Of course, a first sharing mechanism and a first sharing platform are needed as necessary support. For example, our transportation console is the only platform. People in every module can see the data on the platform and interact with it.

Finally, we have reached the ultimate end of digitalization, which is the soul. You will find that after digitalization, the corporate governance culture (Structure) has also changed. I have included a picture of the Chinese mortise and tenon structure. , let’s feel it.

Digitalization is a process that can rebuild an enterprise’s structure and capabilities from skin to flesh and bones. When digitization can open up all elements and all data in various business scenarios, both internally and externally, Okay, these components fit together like mortise and tenon joints. Are they stronger?

Here I put a quote from Li Xigui, the principal of Beijing No. 11 School, so that everyone can understand it: problems that can be solved with structures do not need systems; problems that can be solved with systems do not rely on meetings. Structure is the most reliable mechanism compared to inefficient daily meetings and daily communication.