How did JD.com stay on top of COVID-19 and manage millions of orders per day?

Jiong-Jiong Yu
Senior Retail Analyst
@RetailAnalysis

Date : 16 June 2020

To understand how autonomous warehouses allowed JD.com to respond quickly to uncertainties and fluctuations in product availability and consumer demands during the COVID-19 crisis, IGD conducted a collaborative research project with JD.com. Extracts from the full report are shared here in this article.

Technical advancements that enabled JD.com to respond quickly during COVID-19

JD.com’s autonomous warehouses have the following two key technical advantages that became apparent during the coronavirus outbreak, enabling the company to respond quickly and meet surging demands for online orders and home delivery services:

  • Data-enabled fast decision-making: using data as backbone, the smart warehouses are capable of:
    • Planning new routes
    • Optimising inventories, and
    • Optimsing logistics resources

 

  • Predictive analytics: instead of relying on historical sales data as in the conventional supply chain planning, JD.com’s forecasting system triangulates data from three platforms to predict the shopping patterns and demands ahead of time:
    • In-house inventory forecast
    • Key accounts’ forecast, and
    • Forward-looking scenario planning

Source: IGD Retail Analysis

Autonomous warehousing process that can deal with millions of orders per day

The ultimate goal of autonomous warehouse is to achieve maximum efficiency and accuracy at a large scale. JD.com’s “Asia No.1 logistics park” in Dongguan covers an area of 500,000 sq m and can handle 1.6m delivery per day. The company operates 28 such highly automated logistics parks nationwide.

Source: IGD Retail Analysis

 

The whole warehousing process can be broken down in four different stages, namely inbound, storage, packaging and outbound. JD.com has developed Automated Storage and Retrieval Systems (AS/RS). which has increased storage efficiency by 500%. The outbound process, such as goods picking and sorting, is completely automated. Sorting accuracy can be as high as 99.99%.

Source: IGD Retail Analysis

Detailed discussion can be found in the 25-page full report, which covers the following topics:

  • Overview and background of JD.com’s autonomous warehouses
  • Online grocery order fulfilment through JD.com first party model
  • Top three features of the autonomous warehouses
  • Autonomous warehousing process
  • JD.com’s proprietary software
  • How will 5G bring a revolution to logistics?
  • Sustainability initiatives and Coca Cola case study
  • Five implications for suppliers

 

IGD Retail Analysis subscribers can get the full report here.

For non-subscribers, a free-to-download version of the same report can be accessed here.

 

 

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