Proving the Business Case for the Internet of Things

Kuehne + Nagel brings technology to Chinese retailer JD.com

Steve Rogerson
November 8, 2017



Drawing on its e-commerce fulfilment expertise, Switzerland-based Kuehne + Nagel has partnered with JD.com, China’s largest retailer, to design a supply chain system including quality control checks at origin.
 
The technology-driven system provides JD.com with stock keeping unit (SKU) visibility over its in-bound supply chain before products are imported to China. This has been implemented within twelve months in an origin warehouse in Japan.
 
“We are pleased with the new transfer centre Kuehne + Nagel has designed for JD.com and the successful implementation of the project in Japan,” said Han Liu, general manager of international supply chain at JD Logistics. “We are confident that the improved supply chain will provide our brand partners with an even more reliable e-commerce channel to market while further assuring that our users always receive goods of the highest quality when shopping on JD.com.”
 
JD.com procures goods from global brands to support the growing demand from Chinese consumers for overseas products. Previously, goods were shipped directly from the brand manufacturers and inspected at destination warehouses in mainland China, but often products arrive damaged, expired or in incorrect quantities.
 
To address these problems, Kuehne + Nagel collaborated with JD.com to design a transfer-centre approach – a global supply chain incorporating quality control checks at the consolidation warehouse at origin, prior to shipment to China.
 
The transfer centre covers various activities, including cargo inspection, inventory count and pallet packaging check, all supported by information systems integrated with JD.com’s warehouse management system. SKU level capture of inventory at origin gives JD.com greater end-to-end control over supply chain inventory.
 
The transfer centre at origin setup also allowed JD.com to maintain closer relationships with brands, benefiting JD.com’s consumers with improved product availability and guaranteed quality.
 
“Kuehne + Nagel partnered with JD.com to set up a solution improving the integrity of their end-to-end supply chain,” said Wong Siew Loong, Kuehne + Nagel’s president for north Asia Pacific. “Within a challenging environment we were able to develop a blueprint for JD.com’s transfer centre approach and implement this project in Japan. This collaboration is in line with Kuehne + Nagel’s focus on supporting the supply chain needs of China’s e-commerce leaders. We look forward to working on the establishment of other transfer centres across the globe in the near future.”