Alibaba’s Cainiao launches enterprise smart warehouse solution

•  80% of warehouses today have no automation capabilities
• Cainiao partnered Thailand’s Flash Express to launch the largest smart warehouse in Southeast Asia spanning 20,000 sqm, and equipped with over 100 AGVs to boost automation capabilities
• Cainiao’s technology helps warehouse employees to reduce distance travelled by 90%, and achieve an overall accuracy of 99% in the areas of sortation and parcel handling

Smart warehouse solutions have been a lifesaver for the logistics industry in recent times. With pandemic-induced supply chain disruptions already impacting the output of most industries, smart warehouse solutions are able to accelerate the digitalization momentum.

In the last two years alone, the demand for smart warehouse solutions has soared to an all-time high. In fact, the smart warehousing market size is expected to almost double, growing from US$ 14.8 billion in 2021 to US$ 25.4 billion by 2026.

Despite this, more than 80% of warehouses today have no automation capabilities. With the e-Commerce boom in Southeast Asia, forecasted to reach US$ 254 billion gross merchandise value in five years, logistics firms that can successfully digitalize to seize these opportunities will be able to reap the benefits from the growth.

According to Dr. Ding Hongwei, General Manager of Cainiao Technology, the global supply chain disruptions in the past year have shed new light on the necessity of an efficient logistics value chain that is also capable of alleviating external disruptions and highlighted the urgent need to accelerate innovation within the logistics industry.

“At Cainiao, we constantly invest in technologies that enhance our operations and facilitate the overall transformation of the sector. With the successful digitalization of our supply chain processes, we want to bring that know-how to the rest of the world to safeguard operational efficiencies of cross-border eCommerce logistics,” added Dr. Ding.

Cainiao, which is also Alibaba Group’s logistic arm, will be adopting a consultative approach to implementing new technologies, from solution design and hardware installation to the establishment of an intelligent operation platform, to ensure that legacy workflows are integrated with a warehousing solution that is tailor-made to their specific operations.

The planning can be segmented into three key components, namely:

• The digital space-spatial modeling in the form of two- and three-dimensional spatial visualization provides a panoramic view of equipment and manpower distribution, operation status, etc. to facilitate equipment planning and sourcing;
• The digital space-employee effectiveness display and management, which together with AI vision technology, further achieves intelligent scheduling, resource monitoring, and accurate stocktaking of parcel volume;
• The digital space-device management tracks sorting efficiency in real-time, control the sorting quality, monitor the status of the equipment, and build the procurement and operation ecology of the automation field.

Cainiao believes that having a tailored and layered approach is exceptionally critical in the logistics sector where technology applications must be adapted specifically for each use case in order to address unique business needs. As such, businesses will be able to leverage Cainiao’s automation technology to increase logistics efficiencies, streamline warehouse processes and overcome manpower shortages.

Cainiao’s smart warehouse solution and capabilities

Cainiao’s proprietary warehouse management system leverages artificial intelligence (AI), cloud, and automation in smart warehouses to support the exponential rise in demand and parcel volume during global shopping festivals such as Double 11. This is supported by smart logistics resources such as autonomous mobile robots (AMRs), automatic guided vehicles (AGVs), a central warehouse management system (WMS), and more.

Most recently, Cainiao’s logistics innovation efforts culminated in the establishment of a new-generation, fully automated bonded warehouse in Xiasha, Hangzhou, the largest smart bonded warehouse in China. The stereoscopic warehouse adopts a fully automated parcel sorting model and can store up to 30,000 parcels.

Given the complex setup of the bonded warehouse, which encompasses numerous merchants and product categories, the automated facility leverages an algorithm to schedule warehouse pick-ups and facilitate manual parcel sorting. There, the feed boxes carrying goods will be automatically moved to the sorting area in response to real-time orders, resulting in a 50% improvement in productivity.

In Southeast Asia, Cainiao also announced its first overseas partnership with Flash Express, an eCommerce logistics company in Thailand. The 20,000 square meters host facility is the largest smart warehouse in the region with 100 AGVs used within a 5,000 square meters area.

The warehouse is built with Cainiao’s technology to improve its storage accuracy and warehouse pick-up efficiency. Cainiao’s technology helped warehouse employees reduce the distance traveled by 90%, and achieved an overall accuracy of 99% in the areas of sortation and parcel handling.

The improvement in overall efficiency will help to mitigate mounting pressure to meet business and consumer expectations during mega shopping festivals, which could see demand rise to ten times its usual volume. In this aspect, the implementation of smart warehouse technology has enabled a safer and more productive work environment, with lower management costs and increased efficiency.

“Besides enhancing the solutions available within the global logistics industry, it’s crucial for us to leverage present opportunities to raise the visibility and value of supply chain strategies and operations. By democratizing our smart warehousing solutions, we hope to boost supply chain resilience to withstand further potential supply chain disruptions, and become a key player in supporting the global eCommerce boom,” commented Dr. Ding.

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