The Digitalization Way Of Dingdong Fresh (NYSE: DDL)
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Data & Algorithms Ensure Fast Deliveries to Keep Food Safe and Fresh
The Digitalization Way Of Dingdong Fresh (NYSE: DDL)
- 2. Data Algorithms Ensure Fast Deliveries to Keep Food Safe and Fresh
- 3. = Robust supply chains Extraordinary services Premium products + + Leading real-time online fulfillment service system Efficient supply chain management High-quality and cost-effective products Highly loyal members Products delivered within 29 minutes + DingDongFresh Provides a One-stop Online Shopping Platform with Excellent User Experience Unique self-operated distributed mini warehouses Closer to consumers Stellar user experience Efficient operations Super scalability Flexible site selection for offline stores SOP-based management
- 4. Modern procurement and fulfillment system Digital upgrade Production specifications & D-G.A.P standards The upstream production is more transparent. Based on insights into consumption habits, the suppliers are able to ensure stable supplies that meet users requirements. WMS system & automation equipment Higher efficiency Lower product loss rate Foundation backend backed by the big data Data algorithm-powered E2E process Personalized recommendations Enhanced user loyalty + + Self-built municipal sorting centers Distributed mini warehouses Dining tables Procurement from farm bases Procurement from brands and agents Real-time AI-powered inventory management system Faster turnover Lower shortages, less loss Intelligent order dispatching system Effective route design and planning and high order density Faster delivery and higher efficiency Upstream procurement Different sources Distribution center Sorting and packaging into standard products Distributed mini warehouses Products stored at the right temperature and intelligently matched with corresponding orders User experience and feedback Products delivered within 29 minutes An E2E Self-operated Digital Supply System 7+1 quality control process New product review Inspection and acceptance at warehouses Quality inspections at the source Sorting, packaging, and transferring Inspection and storage Delivery Order sorting User evaluation and services Finest quality Full categories Faster delivery
- 5. The Challenges of Digitalizing a Fresh Food Supply Chain DingDongFresh digital strategy From the very beginning, Liang Changlin, the founder of DingDongFresh, settled on a strategy of E2E Digitalization + Data & Algorithms Driven, to make their services digital. The fresh food retail supply chain is vastly complex. Each product takes a long voyage, from the field, through a transportation network, to your grocery cart. Fresh foods have great category differences, and they are easily damaged in transit. Making the supply chain digitalization is hard. Challenge 1 How can we efficiently implement digital transformation? Challenge 2 How can we get the entire digital system to respond to problems?
- 6. Manufacturing & Packaging Manufacturing execution system (MES) Quality management system (QMS) Delivery (FDC -> User) Scheduling/Dispatch System Delivery App Users User Growth Membership Management Custom Service Forecasting system Objective Management Forecasting Replenishment plan Capacity Management Inventory management Sales and Operations Planning (S&OP) Planning Purchase management system (PMS) Vendor management system (VMS) Procurement Warehouse management system (WMS) Warehouse control system (WCS) Warehouse (RDC) Food Manufacturing System (ERP) Agricultural Operational System (AOS) Suppliers Transportation management system (TMS) Transportation (RDC -> FDC) Frontline Fulfillment Stations Management System Assorting/Packaging App Frontline Fulfillment Stations (FDC) Inventory Allocation Management Inventory Allocation Merchandising Management System Pricing Management System Event Management System Sales Personalized Search & Recommendation E-commerce System (User/Product/Order/Marketing/Shop ping/…) Apps E2E Digitalization
- 7. Digital Transformation: Top-down Construction and Closed-loop Iteration Traditional retail: bottom-up • Process: process-based - > online/systematic - > data-driven/AI-powered • System: procured or self-built independent systems + later integration • Advantages and disadvantages: lightweight startup and fast rollout, but not good for subsequent integration and reconstruction DingDongFresh: top-down • Process: online closed-loop operation on key business processes → global decision-making driven by data & algorithms → system and algorithm iterations based on accumulated data • System: integrated application + data + model (self-built), and continuous iterations and optimization • Advantages and disadvantages: costly and slow rollout, but works well for follow-up optimization • Quantitative decision-making for a 3 million product portfolio in the distributed mini warehouses • Decision-making based on data & algorithms • Automation systems • Human-machine collaboration Case Study Three key points
- 8. Logistics Products Users Management By Objective Traffic planning Assortment planning Delivery capacity planning Search/recommendation User growth Forecasts/Allocation Promotion/Pricing Delivery Scheduling/Dispatch Pressure Balance Short-term execution (by day) Orders Longer-term planning (by month) Month April GMV Warehouse Warehouse network planning Transportation Routing Slot Recommendation Assorting Dispatch Operational Brain Data & Algorithm Driven
- 9. Quick Response to Problems: Digitalization Allows Mistakes Identifying problems and locating root causes • Build a comprehensive system of business metrics • Design anomaly attribution analysis for key metrics • Attributed abnormalities to the right people or team Improving supply chain robustness • Optimize based on theory of constraints (TOC) • Optimize the forecasting model • Improve data quality • Optimize the warehouse network • Use robotic process automation (RPA) for emergency operations Correcting by trial and error • Iterative close-loop of Trail-Correction-Feedback • Collect data when troubleshooting data errors • Case 1: Master Data Inaccuracy Problem • Case 2: Fresh Food Loss Problem
- 10. Better and Fresher Food with Technology 25% Service performance 30% Overall costs 40% Resource utilization Serving 20 cities, including Shanghai, Beijing, Shenzhen, Guangzhou, and Hangzhou 1000 distributed mini warehouses * 3,000 SKUs per warehouse 3+ million product combinations DingDongFresh & Huawei Cloud Decoupled storage and compute for big data OBS: unified data lake storage Kunpeng & X86 Cloud heterogeneous computing capabilities Upgrading Kernel engines such as Hive and Spark Cloud native CCE, CCI, and ECS Task optimization Platform optimization Performance optimization Service optimization Data table optimization Assortmen t planning Intelligent pricing Demand forecasts Inventory planning Category promotion Supply-demand coordination Search and recommendation Digital Merchandising Operations 。。。
- 11. Thank you. Bring digital to every person, home and organization for a fully connected ， intelligent world. Copyright © 2023 Huawei Technologies Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.