Question: what implementation plan can be gotten from these solutions? JD's goals are to lower costs, increase efficiency and increase profits by optimizing the supply chain

what implementation plan can be gotten from these solutions?

JD's goals are to lower costs, increase efficiency and increase profits by optimizing the supply chain while ensuring the availability rate and sales. Therefore, in order to achieve that, JD needs to build a supplier evaluation plan to find the correct suppliers to collaborate with and determine the correct level of collaboration. JD currently has around 30,000 registered suppliers consisting of 2 types of suppliers: SMEs and strategic suppliers based on the purchase amount. With the big number of suppliers, the process of choosing suppliers should be divided into several steps. JD can evaluate and choose suppliers based on Carter's 10Cs model which consists of 10 criteria: Competency, Capacity, Control, Cash, Cost, Commitment, Consistency, Culture, Clean and Communication. Firstly, JD starts with a round of elimination, as 80% of suppliers are SMEs but only contributed 20% to the total purchase volume while 20% left are strategic suppliers but accounted for 80% of the total purchase, JD should focus more on strategic suppliers. The criteria for the first round are as follow: Competency: Determine whether the suppliers are capable of meeting the needs of JD's business operation based on reviewing their contribution to the total sales of JD. Capacity: Determine whether the suppliers have the capacity for JD's orders requirement Control: Determine whether the suppliers can control their internal processes such as product quality, supply chain process, etc. Cash: Determine whether the suppliers are creditable or not. Cost: Determine whether the cost of sourcing is reasonable or not. Then, after eliminating unqualified suppliers, JD can start focusing on more criteria as follow to make a more careful decision on choosing accurate suppliers: Commitment: Determine whether the suppliers are committed to quality, service, and continuous improvement of quality. This is important because suppliers who are committed to continuous improvement prove that they are not afraid of obstacles and willing to strive harder to overcome those. Consistency: Determine whether the suppliers are consistent in the performance and quality of their products. Suppliers that are consistent with their processes prove that they have a firm and consistent business structure as well as well-trained employees. Culture: Determine whether the suppliers' cultures and values align with JD. Companies with the same cultures and values tend to build stronger relationships with each other. Clean: Determine whether the suppliers adhere to Corporate Social Responsibility (CSR). Today, the importance of CSR is undeniable and essential, therefore, suppliers with strong CSR show that they are ethical. Communication: Determine whether the suppliers are responsive and willing to discuss during emergencies. Suppliers that are responsive help JD achieve mutual understanding faster and much better. However, in order to carry on an accurate supplier evaluation plan and convince suppliers that are hesitant about the collaboration, JD firstly has to fix and maintain a consistent structure within the company. Currently, JD is facing multiple issues internally such as continually changing contact person that forces supplier's business specialists to explain the same things multiple times leading to frustration. Moreover, JD's purchasing and sales employees sometimes manually modify the standard system to meet business needs without discussing with the suppliers and this has led to suppliers feeling annoyed and making it impossible for them to optimize the system. Therefore, in order to correctly evaluate suppliers, JD needs to provide their employees with clear and consistent procedures and train them accordingly and avoid making too many changes within a short period of time. By doing this, suppliers can adjust their operation to align with the expectations of JD and reduce miscommunication as well as fortify the relationship. Then, after JD's internal operation is consistent and firm, they need to help suppliers visualize how effective collaboration can lead to mutual improvements by holding a press conference or releasing a statement informing about the collaboration and offering incentives to encourage participation such as contract awards, certifications, and so on. With 30,000 suppliers, JD handles a number of products in various categories having their own set of characteristics. Product classification is key to any e-commerce business and with the scale at which JD operates, it is of utmost importance. Achieve a smooth flow of the supply chain, it requires a healthy collaboration with the suppliers from the get-go. The first step is to achieve data collection and real-time data sharing between JD and the suppliers. This helps us understand the current classification methods and identify the potential tweaks required to the current system. With the necessary data available, it is important to identify the sales contribution of different product categories. According to Pareto's rule, products are recognized based on their volume and by doing so, we can separate the high-value products from the rest. As the goal is to achieve a lean supply chain, this would identify the products that require the most attention and will help us narrow down and control problems that would arise in terms of holding excess inventory of low-value products, overproduction, running out of stock of high-value materials or unexpected interruptions. This information must be passed on to all the teams involved in the supply chain and there needs to be a transparent flow of relevant data exchange among the teams. Furthermore, JD and the supplier involved must work on a collaborative forecast and planning based on the past and future sales records of the product categories and have the option to factor in real-time changes to modify the forecasts. Another important element is to have good communication between the suppliers and JD executives. There must be regular updates and reports between the upstream and downstream members to achieve better collaboration

The COVID-19 pandemic has clearly indicated the vulnerability of complex supply chain networks around the world thereby causing huge financial losses for companies around the world. The pandemic has been an eye-opener for companies across the world to better manage and integrate their supply chain system to improve their performance in the markets they serve. Though the financial performance can be improved by filling the underlying gaps with digital or technological advancement, supplier collaboration plays a major role in improving profitability. Efficient partnerships with the right suppliers are effective both ways and companies are starting to care about having an efficient and profitable supply chain. Having identified the right supplier to collaborate with, the first step for JD would be to make the supplier interested in what we do. Companies are focused on results, and the initial step to garner the interest of these companies would be by showing them the actual results JD has generated in the past. Companies have struggled consistently to collaborate in the past, but JD has a reputation of never jumping ship despite the complexities that may arise throughout the collaboration. One such example is the collaboration with Meda. Being one of the very first companies that benefited from the collaboration with JD, the success was not achieved overnight. Building logistics infrastructure takes time and despite JD's expertise in managing the fast-moving consumer goods (FMCG), the long-term commitment in altering the course path to suit the requirements of Meda eventually bore fruit by improving their forecasting accuracy and financial turnover period significantly. Hence, testimonials are a key factor to gain the confidence of new suppliers to make them see the collaboration with JD would eventually lead to higher profitability. They need to be given quantifiable evidence of cost-optimization over a longer period of time and how it helps benefit their own supply chains. Such contractual negotiations will also benefit from the addition of clauses for future supply chain investments by JD towards suppliers if they are able to consistently meet targets over the contract period. A digital supply chain is essential for companies irrespective of the size or market they serve and making use of the tried and tested platform held by JD, companies can ultimately improve their efficiency by minimizing lead time, establishing a just-it-time process, easily accessing supply chain data for optimization, and avoiding any glitches. All these would eventually help the companies collaborating with JB achieve higher profitability.

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