The logistics arm of Chinese e-commerce giant JD.com has teamed up with a US artificial intelligence (AI) developer to ramp up efficiency for merchants in China, amid the COVID-19 pandemic which has hit the country’s manufacturing sector hard.
Under JD Logistics’s partnership with Arizona-based digital solution provider Blue Yonder, both parties will work together to “provide supply chain transformation solutions for merchants in China to solve a series of business pain points in order to improve efficiency and end-to-end supply chain collaborative management,” JD.com’s logistics unit said in a statement on Wednesday.
The US company can create simulations based on forecast data using AI and machine learning (ML), JD logistics said in the statement. JD Logistics, for its part, can complement this predictive data with real experience and insights relating to front-line execution, the Chinese retailer added.
“By integrating Blue Yonder’s capabilities, JD Logistics will be able to help its partners and merchants increase their ability to monitor and respond to ever-changing customer needs while predicting and preventing potential supply chain disruptions,” it said.
China, the world’s largest manufacturing economy, has been urging factories to digitalize their operations to more efficiently make use of resources as businesses work to recover from disruptions caused by lockdowns, travel restrictions, and the temporary closure of factories due to the coronavirus outbreak. Beijing is also pushing digital infrastructure and industrial upgrading to retool its economy for the future.
Xie Shaofeng, a spokesman for China’s Ministry of Industry and Information Technology, said last month that there is huge demand in “digital infrastructure,” including the use of 5G, data centres, and the industrial Internet of Things.
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China’s leading e-commerce firms, including Alibaba, Pinduoduo, and JD.com, recently announced measures to support small-and-medium enterprises (SMEs), which make up many of the merchants on their platforms and account for more than 90 per cent of all enterprises in the country.
Aside from helping SMEs increase their efficiency, the partnership between JD Logistics and Blue Yonder will also help reduce resource wastage and environmental pollution, according to the companies.
“Supply chain optimization, more so with AI and ML, reduces waste, increases utilization, and improves margins,” Blue Yonder’s president for the Asia-Pacific region Antonio Boccalandro said. “Consumers now more than ever are requiring companies to take up more social responsibilities, leadership, sustainability, company culture, vision, innovation, customer relationship, and community participation,” he added.
Taobao, another leading Chinese e-commerce platform owned by Alibaba Group Holding, also launched a platform last month to help traditional factories more efficiently use their resources.
This story was originally published in the South China Morning Post.