As enterprises continue their journeys of digital transformation, they are experiencing better efficiency in their supply systems supported by the evolving technologies. In a world filled with advanced analytics via IoT and AI, a transparent and well-developed information system for supply chain would be necessary.
Various researches have suggested that companies can achieve certain degree of financial gains with robust digitalized supply chain, while eliminating commonly seen challenges such as ordering errors, high operational costs, lack of communication and accountability, limited visibility, and low customer satisfaction, etc.
Many firms are turning to self-service in some parts of the supply chain. For instance, Huawei released a policy in 2018, encouraging distributors to organize the collection of goods themselves, rather than rely on inefficient delivery services. Such move was meant to improve the logistics capabilities of distributors and deliver a better warehouse service experience. This requires a comprehensive system for information available to all parties along the supply chain.
By 2019, Huawei's distributors had adopted this ‘self-pickup' mode in more than 80 percent of orders. However, another challenge emerged as logistics service volume surged: Tier-2 resellers and customers requested better logistics services. To achieve this, distributors began looking into how to improve their warehouse management efficiency.
Supply Efficiency and Perception Improvement Become Priorities
Yet, there have been discrepancies among logistics systems. Huawei's customers and Tier-2 resellers, meanwhile, had been accustomed to this already well-established system with observable supply information display, providing real-time information about goods production, outbound status, and shipment.
Some distributors, however, operated on systems that couldn't be visually displayed. There were problems ranging from limited information of locations and expected delivery time, to late notifications of goods arrivals, delayed responses to urgent requests, which have made some customers dissatisfied.
These distributors had their own problems. Although certain manpower had been dedicated for the manual order processing, tedious management process easily led to work overload during peak seasons. Certain systems had not been connected with each other, making it different for effective resource management. And there were sometimes to many individuals handling same cases, resulting in communication breakdown.
In 2019, to address these business development challenges, our distributors joined us to kickstart the supply information sharing and alignment set-up based on digital collaboration. Huawei has developed an interconnection model for the channel supply collaboration system, which was used to streamline business processes, and establish unified data standards. It has finally resulted in visible collaboration mechanisms that interconnected Huawei's supply chain with the packing list and logistics systems of partners.
Digital Collaboration Enables Supply Information Sharing and Alignment
This is based on Huawei's belief in the philosophy that information sharing can lead to shared success amid digitalization. In May 2019, we shared and aligned its digital collaboration strategy with our distributors, who followed up by increasing their investment in digital system collaboration and interconnection, to carry out joint digital supply information interconnection with Huawei.
We have been working closely with the distributors to deliver feasible solutions to connect the systems and align business and IT requirements. All parties agreed for Huawei to transfer distributors' key packing list information and distributor transfer logistics information, with data interconnection to be completed in 2019.
Works has also been done in boosting the security control for the logistics information interconnection to protect back-end services and data transmission during Application Programming Interface (API) opening. Huawei Customer Network Cooperation (CNC) served as the packing list information bridge, interconnecting partner systems with Huawei's internal systems.
By sharing and aligning information according to industry standards and regulations, Huawei enabled the "order placement by distributors and goods delivery to Tier-2 resellers/end customers" process while ensuring end-to-end logistics information visibility. The online transaction experience and supply efficiency for partners improved significantly.
Following the success of the IT system interconnection, further efforts were made to optimize user experiences following, by making solutions more comprehensive and improving Time-To-Market (TTM) deliverables, as well as the completeness and timeliness of data.
System Interconnection Supports Multiple Delivery Scenarios
The systems can now identify one-off delivery and multiple delivery scenarios. The logistics information of each individual journey during multiple deliveries is visible and searchable by using channel orders.
By deploying big data analytics, the logistics service quality of distributors can be supervised and evaluated on visualized dashboards, and analysis capabilities help Huawei collaborate with partners to improve end-customer service quality, with clearer targets, and optimized logistics capabilities.
System interconnection and information visibility have improved monthly distributor delivery efficiency by an average of five percent, and the visibility and completeness of logistics node information has improved by over 20 percent on average.
Since August 2019, six distributors — VSTECS, Digital China, Kinghighway, Founder Century, Synnex, and CNBM — have collaborated with Huawei to implement system interconnection and information visibility, making logistics information visible to more than 6,000 Tier-2 resellers.
Digital Ecosystems Has Been Recognized by Customers and Partners
Customers like the arrangements. Information can be obtained without any delayed logistics query, and clients can now view the real-time logistics status of some distributors on Huawei's platform, which enables them to arrange personnel in advance for the reception of goods.
Channel partners also enjoy the benefits from the packing list information alignment. With the system interconnected, Huawei's packing list information can be transparently transferred in real-time and directly accessed, which can vastly reduce manual operations and improve efficiency. They expected more features, such as integration of order and invoicing information to further boost operations efficiency.
Huawei is always a firm believer in partnership. Over the past decades, the Enterprise Business Group (EBG) has been working with partners from all directions and established an ecosystem for the future. As a customer-centric company, Huawei will ensure that such ecosystem does not only help partnering organizations evolve, but also continuously elevate the standards of products and services for clients.
Sun Deqiang now serves as Vice President of Global Customer & Region Service Department, Supply Chain Management, Huawei Technologies, Co., Ltd., overseeing the supply chain business management of global Carrier customer, Enterprise customer and partner. Mr. Sun joined Huawei in 1999, and He's good at supply management, project management, business transformation, process and business operation, with 21 years of experience in delivery service and supply chain in headquarter and region. He has served as director of customer order department, director of project management and field office director of technical service. He has also received Operational Excellence Award and Presidential Commendation.