A resilient supply chain is only possible when smart logistics is available to all

Internet and mobile phone penetration have been used as metrics to gauge the development of digital economies and smart cities. We believe the same concept applies with logistics, where the extent of technology adoption in the industry will determine global supply chain resilience. After all, logistics is core to a city’s infrastructure and go hand in hand with the digitalization of other core areas such as transportation, communications, intelligent infrastructure, and so on.

To solve some of today’s greatest supply chain challenges, logistics operators and stakeholders in the ecosystem need to leverage partnerships to identify key opportunities for integration and digitalization to develop and apply smart logistics solutions.

In smart logistics, data-driven intelligence introduces end-to-end visibility to improve the flow, control, and management of goods across, and also within, borders. The application of smart logistics provides businesses the opportunity to not only improve delivery, transport, and warehousing efficiency, but also enable greater connectivity and options for customers across transportation modalities.

Why now?

At a time when the supply chain continues to experience increases in labor, energy, and transport costs, all driving inflation higher into the stratosphere, the logistics sector has an opportunity to take a leading role in partnering with key stakeholders — manufacturers, carriers/operators, procurement and others — to look at how we can collectively partner to reinforce the supply chain.

Not only is there a need for a resilient logistics value chain that is capable of alleviating external disruptions, but it is also necessary to uplift the entire supply chain ecosystem collectively. Afterall, the complexity of logistics means that no single player holds all the cards in the entire ecosystem.

Supply chain and logistics success therefore means empowering our partners, businesses, customers, and other stakeholders in the supply chain ecosystem to do the same with the diverse range of resources we have. The logistics sector will be better empowered to succeed if it is using smarter logistics through the right technology investments and partnerships.

Delivering the world in 72 hours

Cainiao’s eHub in Kuala Lumpur, Malaysia

Through partnerships, smart logistics enable players in the ecosystem to increase delivery efficiency. This may sound simple in theory, but the reality is the scale and complexity of doing this is immense and immeasurably difficult for most logistics firms. For example, more than 26,000 international brands from 84 countries and regions export to China via Cainiao’s global supply chain network, where warehouses in major cities in 12 countries enable the timely shipment of goods from Japan, South Korea, Australia and Spain and elsewhere to reach China.

Through smart logistics, we were able to accelerate our delivery operations, with more than half of the goods exported seeing a 60 percent increase in delivery efficiency, with customers in key European cities such as Madrid and Paris receiving their parcels in as fast as three days.

Furthermore, autonomous delivery and self-service solutions have emerged as the latest innovations in the smart logistics arena. Across communities and university campuses in Chinese cities, including Shanghai and Hangzhou, autonomous logistics robots are deployed at Cainiao Post community stations to perform autonomous last-mile package deliveries.

The secret sauce to smart logistics success — technology and partnerships

Because the supply chain and cross-border logistics are so complex, digital solutions need to be deeply embedded in the entire ecosystem. Smart logistics cannot be applied in silo. Our success is predicated on collaboration and interactions with local partners across the global network. By aggregating partners and resources globally, and establishing greater synergies and integrations using cutting-edge technologies such as artificial intelligence, machine learning, big data and automation, we are collectively arriving at the most optimal efficiencies together. As such, we have partnered with more than 3,000 logistics players globally to create a ripple effect across the entire ecosystem to enable smart logistics to achieve even more collectively.

Flash Express smart warehouse

Having successfully digitalized our own supply chain processes, we strived to bring that knowledge to the rest of the ecosystem to safeguard operational efficiencies. Our partnership with Flash Express, an eCommerce logistics company in Thailand, enabled us to provide smart logistics expertise and technology to help them build the largest smart warehouse in Southeast Asia. A 20,000 square meter host facility was built, with 100 automated guided vehicles (AGV) used within a 5,000 square meter area.

By implementing smart warehouse technology, Flash Express improved their storage and warehouse pick-up efficiency, which led to an overall accuracy of 99 percent in sortation and parcel handling. Furthermore, it enabled a safer and more productive work environment, with lower management costs.

While the feats and speeds of the technologies in play are important, smart logistics cannot be limited to just one organization. Afterall, the supply chain and logistics ecosystem is only strong when every node is equally empowered.

Now, more than ever, we need a whole-of-industry effort to boost supply chain resilience. Even though smart logistics powered by new technologies bring new opportunities to address the plethora of challenges we face, it cannot happen as siloed efforts. Partnerships will continue to be key as the logistics sector inches ever closer to where it should be — the digital-first era.

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The logistics arm of Alibaba Group. Follow us for content on smart logistics and supply chain management

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Cainiao Network

The logistics arm of Alibaba Group. Follow us for content on smart logistics and supply chain management