Cainiao, the logistics arm of Alibaba Group Holding Limited, has announced that it has entered a strategic partnership with Nestlé China. The partnership will deepen collaboration across Nestlé’s smart supply chain and its brands, such as Starbucks at Home, Hsu Fu Chi, Wyeth and Totole. Key areas include Nestlé’s B2C and B2B fulfilment businesses, digitalized supply chain and sustainability, improvements to direct-to-consumer (DTC) fulfilment, logistics automation, and Internet of Things (IoT) technology, among others.
As part of this partnership, Cainiao and Nestlé have jointly established an automated DTC fulfilment centre in Jiangsu, China. Leveraging its expertise and experience in supply chain management and smart logistics technology, Cainiao has provided tailored logistics solutions and introduced automated systems to enhance productivity and reduce manual operations in the facility.
For example, the implementation of AGV robots in the facility has enabled the shift from a manual picking model to automated sortation and picking. Compared to the previous labour- and time-intensive manual picking model, the automated sortation and picking process has helped to increase productivity by approximately three times and reduced the number of steps taken per staff by over 20,000 steps daily.
Cainiao’s new digital supply chain control tower will serve as the backbone of supply chain management to further streamline business processes and drive operational efficiency across the supply chain. The control tower can integrate numerous systems to achieve human-machine collaboration and full-process automation. It can also detect anomalies and deliver intelligent diagnoses that guide strategic and data-driven decision-making. In addition, it acts as a consolidation tool by providing a myriad of situational analyses across each operational aspect in the value chain, from planning, procurement, production, and storage to logistics, to optimize inventory turnover and warehousing. This increases the overall competency and resilience of the entire supply chain.
In addition, Cainiao’s smart and digitalized supply chain will offer Nestlé greater visibility to manage market changes effectively. For example, smart warehousing and inventory management can better facilitate real-time data exchange to support fluctuating consumer demand. This will contribute towards Nestlé’s increasing focus on establishing a consumer-centric supply chain network.
Going forward, this fulfilment centre will play a pivotal role in supporting Nestlé’s core brand expansion into the DTC model. With a dedicated DTC channel, Nestlé can offer Chinese consumers superior logistics service for its food and beverage category products. In the future, the DTC fulfilment centre will also serve as the central fulfilment center to support the expansion of its social commerce business on platforms such as WeChat, Douyin etc.
“The launch of Nestlé’s DTC fulfilment centre marks a new milestone in our longstanding partnership. With a focus on ‘long-termism’, we strive to support Nestlé with holistic and sustainable supply chain services,” said Wan Lin, CEO of Cainiao Network.
“Upholding a consumer-centric operation and business philosophy, we strive to provide consumers with ‘farm-to-table’ product offerings. Together with Cainiao, we believe we can establish an efficient, responsive and resilient supply chain with a human touch,” said Tony Domingo, Senior Vice President of Supply Chain and Procurement, Nestlé Zone Greater China.
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