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The new initiative, between APICS and JD.com, Inc., has one additional point of interest: it's happening in China.
APICS, formerly known as the American Production and Inventory Control Society, bills itself today as "the association for supply chain management." In 2014, it merged with the Supply Chain Council, creator of the business framework known as SCOR, for Supply Chain Operations Reference model. SCOR, which divides key processes into the categories of Plan, Source, Make, Deliver, Return and Enable, has served as a guide for countless companies looking to optimize their global supply chains.
JD.com is reportedly both the largest e-commerce company in China, and largest Chinese retailer overall by revenue. Its chief rival in that country is Alibaba Group, although both also vie with mighty Amazon.com in some markets.
Over the years, APICS’s role has largely been that of an informational, educational and promotional resource for supply-chain executives. Now, it’s venturing into a partnership with a private entity, with the intention of creating both proprietary and shared intelligence.
JD.com has recently been sharpening its focus on supply-chain management, having created a new unit for logistics services earlier this year. With growth, however, come the key questions that every e-commerce company must confront: How are we really doing against the competition? And how can we improve our ties with suppliers?
Yongli Yu, president of supply chain research and development with JD.com, has said the e-tailer’s goal is to deploy a “smart” supply chain to drive growth. The partnership with APICS “will provide insights derived from real-world surveys, allowing us to deliver a performance-driven measurement and improvement platform for real-world solutions,” he said in a statement.
So where does APICS, ostensibly a neutral trade group, come in? The group already has a benchmark that it calls SCORmark, which is intended to help companies measure and compare their supply-chain performance, as well as assess opportunities for improvement. In 2015, APICS released a model for manufacturers, then added one for distribution this year.
The partnership with JD.com arose from a desire to enter the world of digital supply chains and the omnichannel, says Peter Bolstorff, APICS’s executive vice president of corporate development. It marks the first time that the organization has linked up with a particular company to achieve the aims of SCOR and the SCORmark model.
“There was not really a good benchmarking system in place of retail and omnichannel/e-commerce,” says Bolstorff. Yet all of the e-commerce giants share common challenges related to such tasks as final-mile delivery.
“Our strategy was to identify a large e-commerce company, partner with them, and leverage the data they already have,” explains Bolstorff. “We help them finish the survey with their suppliers.”
In addition, he says, APICS was seeking to establish a strong presence in China. Last year, it set up a corporate advisory team there, of which JD.com is a member. Then it asked participants to identify their interests and key challenges. Discussions with JD.com about the desire to employ its technology platform to solidify relations with suppliers led to the new collaborative effort.
JD.com is developing the platform in two parts: one for collecting data from supplier, the other a control tower built on key performance indicators derived from the SCOR model.
APICS’s own omnichannel efforts are proceeding in three phases. Phase one draws on data from JD.com’s suppliers. Phase two involves working with JD.com and its supply-chain partners to expand the platform to optimize delivery, especially in the last mile. Phase three zeroes in on the consumer. “In our own research,” Bolstorff says, “we think that consumer-driven supply chains are things we need to pay attention to. With this collaboration, we’re finally going to put some metrics and data around that.”
APICS also brings to the table a wealth of data and metrics from other industries, which can be applied to JD.com’s supply base and refashioned for the omnichannel, Bolstorff says.
Currently APICS is gathering data from JD.com’s suppliers and its own corporate members. It was planning to share the preliminary findings at its annual conference in October. The next step is to form a pilot community, and work with JD.com to introduce the data-collection platform globally. At that point, it can begin focusing on e-commerce companies, and retailers with dotcom arms.
In 2018 and 2019, the partners will scale up the initiative to encompass a larger pool of supplier data, expand it to cover last-mile delivery, then use the technology to get a better sense of real-world consumer behavior.
Data related to JD.com’s suppliers is proprietary, and can’t be shared with other companies, even if they’re APICS members. But APICS does intend to offer aggregated results, providing fresh insights into omnichannel performance that can be utilized by all. (SCOR is, after all, an open standard.)
APICS says it’s open to additional partnerships with private companies, as it seeks to develop best-in-class metrics in such areas as A.I., cognitive learning, last-mile technology and even driverless vehicles. Says Bolstorff: “We can never rest.”
