May 17, 2020

JD Logistics: enabling smart supply chain solutions

Logistics
Supply Chain
Sean Galea-Pace
2 min
Following JD.com’s launch of China’s first 5G-powered smart logistics park in the country, Supply Chain Digital takes a closer look at the company.
Following JD.com’s launch of China’s first 5G-powered smart logistics park in the country, Supply Chain Digital takes a closer look at the company...

Following JD.com’s launch of China’s first 5G-powered smart logistics park in the country, Supply Chain Digital takes a closer look at the company.

As China’s largest online retailer, JD.com is considered the one-stop e-commerce platform in the country. Providing more than 320mn active customers with direct access to an unrivalled number of authentic, high-quality products that help leading local and international brands delve into China’s fast-growing e-commerce market.

Its logistics division, JD Logistics, leverages the firm’s advanced technology and logistics expertise to provide smart supply chain and logistics services to businesses across a range of industries. Operating the largest fulfillment infrastructure of any e-commerce company worldwide, JD.com operated “23 Asia No.1” logistics parks, which are among the largest and most automated smart fulfillment centres in Asia. The firm operates a network of around 600 warehouses, with a total of 15mn sq.m. 

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JD Logistics is focused on developing the smartest, most efficient logistics systems possible, and is leveraging its Big Data resources, information systems and know-how in the Chinese market. The company values innovation and believes that technology can drive the future of smart logistics. Having built its first fully-automated warehouse in Shanghai, the company is currently in development of automatic delivery robots.

Following the launch of China’s first 5G-powered smart logistics park in Beijing, the bandwidth offered by 5G will significantly increase the efficiency of its IIoT fulfillment capabilities on a large scale, while also allowing instant communication between human employees and smart machines. “The launch of JD’s 5G-powered smart logistics park - the first of its kind - is an exciting step in the realisation of the Industrial Internet of Things at scale,” commented Wenming Zhe, chief architect of logistics R&D, head of 5G-powered smart logistics park projects at JD Logistics. “The low latency, high speed and ability to support a broad spectrum of simultaneous connections provided by 5G network creates an unprecedented level of real-time connectivity, significantly improving the efficiency of JD’s fulfilment operations, which is key to providing the best customer service in the business.”

For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.

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Jun 19, 2021

Driver shortages: Why the industry needs to be worried

Logistics
SCALA
supplychain
Brexit
Rob Wright, Executive Director...
4 min
Logistics professionals need urgent solutions to a shortage in drivers caused by a perfect storm of Brexit, COVID-19 and compounding economic factors

While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks. 

A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so. 

What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.

"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"


That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.

But where has this skills shortage stemmed from? 

Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.

COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.

It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing. 

So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done? 

Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change. 

Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.

Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line. 

On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains. 

Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months. 
 

Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector

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