Author | Dai Runze
Editor | Mai Guangwei
Cainiao has been established for its ninth anniversary.
The recent financial report shows that Cainiao’s external revenue accounts for 69% of the total, mainly from global logistics and domestic supply chains.
Looking back at 2013, Cainiao initially hoped to use technology to improve the efficiency of express delivery companies, thereby enhancing the logistics experience. After years of deep cultivation in the logistics industry, Cainiao has not only become one of Alibaba’s core infrastructures, but also can provide technical support for the global logistics industry in the process of digitalization.
Behind this is the transformation of the logistics industry in the past nine years, and it is also the process of Cainiao’s continuous actual combat, summary, and then deduction and persistence.
Advanced technology accumulated from the source
With the wave of the Internet, Cainiao has undergone many technological innovations from internal capacity building to external capacity output in the past nine years. In 2014, Dr. Ding Hongwei, who has a bachelor’s degree from Tsinghua University and a Ph.D. background from the French National Institute for Computing Machinery (INRIA), joined Cainiao. He led a group of young engineers to promote Cainiao’s underlying big data construction and business analysis applications.
Before joining Cainiao, Dr. Hongwei Ding had nearly ten years of research work in logistics and supply chain algorithms at IBM. During this period, he conducted a very thorough research on the digitization of China’s logistics industry and deeply participated in a number of express logistics projects. During the eight years of being a rookie, Dr. Ding Hongwei and his team have built one by one from the initial big data construction, to business analysis, data products, and network planning. Therefore, they have a deep understanding of the industry, warehousing, distribution and other businesses. It also knows how to apply the adapted technology to actual business scenarios.
The early logistics industry was accompanied by a large number of productive jobs every day. There are a large number of warehouse workers in the warehouse to pick and carry, a large number of truck drivers to transport back and forth, and the courier buddies are busy in all corners of the city…so innovative tools are needed to improve productivity. However, before 2014, the domestic express logistics industry was in chaos, and manual sorting made it impossible for the industry to move towards automation quickly.
The invention of electronic face sheets changed this situation. A small sticker digitized the address and made it possible for the industry to turn to automation. In order to quickly identify parcels, Cainiao has developed single-piece separation equipment and high-speed cross-sorter; in order to identify and locate parcels through mechanical control, automated warehouses, AGVs (robots with autonomous navigation functions), four-way shuttles and other warehouse automation innovations born in succession. Automation can digitize the entire process, requiring data to be recorded to the state of each action.
Virtually every nuanced action in a logistics operation is cost-considered. For the cost-sensitive logistics industry, the biggest difficulty in digitalization is not the implementation path, but cost control. Taking the most common fast parcel tracking process as an example, there are more than 20 scanning links in the actual operation of outbound, distribution, sorting, and delivery, and each scan has costs. If in the cross-border logistics scenario , the scanning cost of overseas terminals will be higher. So how to reduce costs? Technology and equipment related to RFID (Radio Frequency Identification) is one of the options.
At present, Cainiao is optimizing around RFID tags and RFID readers, which not only improves short-distance communication positioning capabilities, but also improves efficiency and reduces costs by replacing manual labor with automatic scanning. For example, after Cainiao deployed the RFID identification system in the logistics networks of Spain and France, the acquisition cost of a single logistics node was reduced to 1 cent, compared to 2-3 RMB when it relied on manual scanning.
With automation capabilities, digital output capabilities are also required. The cooperation between Cainiao and Ouyeel Industrial Products has always been regarded as a typical case. Among them, Cainiao’s OTWB management system and digital supply chain control tower can be centrally implemented in complex industrial product supply chain scenarios. Ouyeel Industrial Products is the supply chain platform of Baowu Iron & Steel, and the annual transaction of industrial products exceeds 150 billion yuan.
This case puts forward three requirements for Cainiao. First, they must have a high degree of awareness of online management of multiple businesses; second, the system can carry out offline operations, warehouse management, and transportation management of industrial products; third, the epidemic situation During this period, whether the system itself can complete the deployment in a short time. These three requirements are the strengths of the rookie. The system construction itself is not difficult. The biggest challenge is communication and collaboration during the epidemic.
The Cainiao team never left Shanghai during the epidemic, but all stayed in the quarantine hotel to stick with customers. Especially in the first few days when the system was launched, the team worked all night and took turns on duty. Even Zhang Jing, chairman of Ouyeel Industrial Products, admitted that the dedication and dedication of the rookie team touched him and the entire company.
The project experience that was able to complete the delivery during the epidemic can be traced back to the cooperation case of Thailand Lightning in 2021. At that time, the situation that Cainiao faced was even more difficult – epidemic situation, overseas implementation, cultural differences, and a total project cycle of no more than four months. It is not a small challenge to single out each influencing factor. Finally, Lightning Da launched 168 AGVs, and the equipment runs very smoothly. The system uses Cainiao’s flexible automation technology and warehouse management system WMS, which is also exported overseas based on domestic experience, and the effect is very significant. At present, the warehouse can maintain a high output of 6,000 orders per day, and the daily processing capacity can be increased to 20,000 orders only by increasing the number of AGVs during the big promotion.
Looking back, Dr. Ding Hongwei divided the whole process into automation, digitization, and intelligence. These three directions should not only have their own positioning, research and development of core capabilities, but also the ability to export commercialized products. From the perspective of development stage, Cainiao is currently in the stage of stabilizing the digital chassis and gradually moving towards intelligence. For example, unmanned vehicles at express terminals based on artificial intelligence have formed a relatively mature large-scale application. However, the current application scenarios of unmanned vehicles are relatively narrow, and a richer product layout has begun to be laid out. This is something.
The road to overcoming obstacles has not been smooth sailing
In 2021, Siemens’ “core-lack event” caused anxiety in the entire industry.
Most electrical control equipment requires a logic control module PLC. Siemens basically covers the global market, and many companies cannot upgrade automatically due to lack of cores and out of stock. As a result, Cainiao developed a software-controlled PLC and obtained the CE certification for export to Europe, which solved the urgent need for domestic substitution.
In fact, to a certain extent, software-controlled PLCs have stronger remote deployment capabilities than hardware PLCs, and have stronger control capabilities that can change at any time. There is a lot of room for play. But not every problem can be solved. The logistics development level of Southeast Asia where Lightning is located is relatively low, and Cainiao’s technology has enough advantages to form a “dimension reduction attack”.
But that advantage is sharply compressed against European rivals. At the technical level, after more than half a century of technological iterations in Europe and the United States, a large number of invisible champions have been nurtured, and they have a very high voice in a certain vertical field. European automation capabilities are very high, and Chinese companies must learn and catch up in terms of production quality, manufacturing quality and underlying key components.
Although China’s Internet technology is very developed, many cloud technologies, digitization, IoT, digital and intelligent distribution and other aspects have technical confidence, but it is worth reflecting that many underlying innovations, such as chips and other hard technologies, will undoubtedly challenge Chinese enterprises. is huge. For example, RFID chips, whether tag chips or reader chips, have 70-80% of the market share monopolized by several European and American companies, which deeply touched Dr. Ding Hongwei. Perhaps, one of the future directions of China’s logistics technology is the self-developed core chips, controllers and other key components of automation.
At the conceptual level, the European market is very particular about planning, and has very high requirements for the level of detail and meticulousness of the planning, and also for the final delivery results and the degree of matching of the planning. Dr. Ding Hongwei said frankly: “This is not entirely a pursuit. Fast and cost-effective.”
In terms of development models, European companies have a lot to learn from. Dr. Ding Hongwei summarized three aspects. First of all, many overseas leading companies have a long history of more than 20 to 30 years, and these companies have a very high degree of focus; secondly, the leading invisible champions can systematically classify the entire industry and conduct in-depth operations at a granular level. In-depth research and development in the field of science and technology; finally, European companies have a lot of experience in normalized development, and companies can continue to move forward in an orderly and high-quality manner. The rookie’s advantage is differentiation.
According to public information, in just six months last year, Cainiao completed the planning, construction and commissioning of seven major distribution centers in Europe in one go, realized the digitalization of distribution, and improved warehousing efficiency and e-commerce service experience. The digital-intelligence transformation has more than doubled the sorting efficiency of Cainiao’s European distribution centers. Alvaro Giron, Operations Manager of the Distribution Center in Madrid, Spain, said with emotion that in the future, packages from Spain and Portugal can be sent out from one distribution center. This is unimaginable.
Speaking of the differences, most of the local traditional distribution centers use high-precision automation equipment, while Cainiao adopts the self-developed overseas distribution system (GXMS), the core product function “flow to the engine”, which will send parcels from all over the world. The business attributes are labelled, so that the system can flexibly command the automation equipment to sort the parcels to the bays. The distribution center in the Cainiao eHub in Liege, Belgium is a typical case. In the process, when a cross-border package from China arrives, the flow engine will distribute it according to the flow direction of the destination country, and coordinate with Cainiao’s regional Kaban network to distribute. Destination refinement to truck lines and injection points. The parcels are then transported to the corresponding European and pan-European countries through the logistics fulfillment routes pre-planned by the system.
The road ahead is long and full of opportunities
The logistics industry is showing some new era characteristics and industry trends. From the perspective of the external environment, logistics technology itself is affected by the rapid changes in industry and supply chain demand.
The logistics delivery time has changed from a few days to every other day, the same day to an hour, completely changing the logistics scene; aging has changed the workforce structure; the epidemic has unprecedented requirements for logistics emergency response capabilities, real-time scheduling capabilities, and real-time perception capabilities.
From the perspective of the technological development of the industry itself, the pace of innovation in the production tools of logistics technology is accelerating, and the technological dividends brought by the Internet are also being integrated into the logistics industry on a large scale. The reason is that in addition to the changes in logistics technology itself, the blessing of capital has also accelerated the speed of research and development and application. Once a certain technology was born, there was two or three years of incubation time before testing and application, but now there is only one year or even half a year of reaction time.
As an Internet company in the logistics industry, Cainiao’s development path will always revolve around the industry and the Internet. This includes applied and disruptive technologies. The research and development cycle of applied technology is not long, and it can be applied quickly after production, while disruptive technology has a high threshold for research and development and innovation, and the time of the research and development cycle needs to be judged comprehensively. For example, it is very fast to find a few software engineers to develop an industrialized software. However, it takes three to five years of iteration to really make a complete set of industrialized advanced software.
Any improvement of technological capabilities, applied to enterprises, industries, or even different stages of different enterprises, will focus on the difficulty of technological delivery and implementation. For Cainiao, it is necessary to have a deep enough understanding of the industry and business scenarios. Dr. Ding Hongwei found that some deployments with obvious effects, such as automated systems, are easy for enterprises to digest and absorb. From digital to intelligent construction, it is a test of the company’s philosophy and operational adaptation capabilities.
How should the rookie grasp the future? To sum up, there are mainly two layouts. In the field of distribution automation, Cainiao has developed a soft PLC to deal with the problem of “lack of cores” and realize the autonomy of the core control software, but this only solves the problem of the first generation automatic distribution system, in order to be able to tightly Follow in the footsteps of your predecessors.
Obviously, being a follower is not enough. Dr. Ding Hongwei’s judgment on the industry is that, with the development of the industry in the past two or three years, the first generation of automatic sorting only solved the problem of parcel sorting, and there is a lot of room for development. Cainiao is trying to develop a “second-generation digital intelligent sorting system”. In addition to the cross-belt distribution capability, it integrates logistics elements and links such as labor management, yard scheduling, and trunk line operations into the distribution center. own ability to achieve leap.
Another level is autonomous driving. At the level of technological application, the underlying technological strength of self-developed is the basic disk, and those with disruptive technological capabilities should also persist for a long time. Take autonomous driving as an example. This is a project that requires a considerable amount of investment for a long time to have results. Cainiao began to develop autonomous driving as early as 2015, and the unmanned fleet used in express delivery terminals has been put into production.
Today, nearly 500 unmanned vehicles form the world’s largest express unmanned fleet. Therefore, as a continuation of the technology, the research and development of a series of unmanned products in the scenarios of trunk transportation and urban distribution is logical. In the above two examples, readers can feel that Cainiao always maintains the technological attitude of core technology construction. As Dr. Ding Hongwei has always emphasized: “Cainiao is a large-scale logistics industry Internet company. It needs its own core technology capabilities to go a long way.”
write at the end
To sum up, the development of Cainiao over the past nine years has witnessed the gradual accumulation in the logistics industry, from the innovation of production tools, to the optimization of production relations, to the development of subversive core capabilities.
Since its establishment in 2013, Cainiao has relied on the Internet gene, used technological means and data methods to do solid logistics on the one hand, and provide services for the logistics supply chain on the other hand. As an industrial Internet company, Cainiao currently has relatively complete domestic warehousing, domestic distribution, international warehousing, international distribution, and self-operated capabilities, as well as some consumer businesses such as Cainiao Station. In overseas business, there are not only logistics infrastructure with heavy asset investment, but also innovations such as smart contracting, which can reduce costs and improve timeliness for customers through technical means.
For Cainiao, whether it is the use of heavy-asset investment or lightweight innovation, it is just a difference in the way of implementation. The ultimate goal is the same, and it is necessary to allow itself, customers, and industry partners to achieve high-quality development.
Today, Cainiao’s logistics capabilities are “spillover”. For example, the smart production warehouse of rural innovation helps farmers increase their income through automation, and it is also an example of logistics technology participating in rural revitalization. This is the inclusive side of technology, and it is also a natural side.
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