AI + Optimization = Retail Excellence
The diverse customer base, expanding product variety, and higher service expectations present new inventory management challenges for JD.com, China’s largest retailer and leading supply chain-based technology and service provider.
To address these challenges, Prof. Max Shen, Chief Scientist of Supply Chain Management of JD.com, led a team of researchers from JD.com and UC Berkeley to develop an end-to-end inventory management system (in short, E2E system) to reduce operational costs, enhance efficiency, promote customer satisfaction, and ensure supply chain resilience.
The E2E system avoids error accumulation over the middle stages and simultaneously outputs the predictions and inventory ordering decisions, and thus significantly improves the accuracy and efficiency of all inventory decisions. After implementing the E2E system online, JD.com has achieved an automated procurement rate of 85 percent, product availability of 95 percent, and 31.5-day turnover rate, and has saved over 94.7 million dollars in 2022.