Opinions
Opinions | Liu Dacheng:Smart Supply Chain Innovation in the 5G Era
2018-01-16 Fablog

5G is far from being considered an industrial revolution, and even lacks revolutionary innovation. It should be called technological improvement; However, 5G still has the potential to cause a significant transformation in the industrial structure of resource production consumer linkage, just like technologies such as the Internet, mobile internet, and the Internet of Things.


Taking the Taobao platform supported by internet technology as an example. The traditional commercial/logistics channels that connect production and consumption directly constrain the personalization of production and consumption. No matter how good personalized creative supply and differentiated customer demand are, they must also comply with the gap selection of commercial/logistics channels for low cost and high efficiency considerations; The e-commerce and logistics supported by the Internet have achieved low-cost, efficient, and precise integration between personalized production and differentiated demand, forming a large-scale market. Alibaba, which sells everything, has a market value of 407 billion US dollars.


Mobile internet technology supports third-party mobile payments, mobile map navigation platforms, and more. The rapid rise of WeChat payment/Alipay, Shunfeng/Meituan take away benefited from this. Traditional credit card payments require user credit as collateral and sacrifice transaction efficiency; WeChat payment and Alipay despised the rare credit of Chinese enterprises and individuals, realized the safe flow of funds between supply and demand with near zero cost efficiency, and sank to the bottom users of society, realizing the data and process control of the whole transaction process; Third party mobile payments have also achieved transaction supervision of operators by capital at nearly zero cost, giving rise to capital entering industries such as catering, road freight, and other traditional "underground black transactions" that are prevalent; Mobile map navigation provides a multi-dimensional integration of time, space, and logical dimensions for production, consumption, and commerce/logistics resources at nearly zero cost, transforming the originally differentiated time, space, and logical resources into standardization and scaling at low cost and high efficiency. Delivery and delivery guys can double their income without significant changes in labor intensity and low technical requirements.


Big data and cloud computing greatly enhance the technical and knowledge content of decision-making through information integrity, achieving precise supply and demand integration and scenario realization with low cost and high efficiency. For example, Amazon has built its "flywheel effect" model using the AWS cloud service platform, which is a multi node profitable supply chain system on the internet where "wool comes from pigs".


The Internet of Things implements an ubiquitous network on top of the Internet, which is an intelligent control platform for decision support and actuators on sensor networks and their connections.


Some people refer to artificial intelligence as the core part of the Fourth Industrial Revolution, believing that the steam engine revolution achieved human physical expansion, while artificial intelligence achieved human intellectual expansion. However, in practical applications, due to the slow development of peripheral support technology, artificial intelligence is still far from reaching a considerable level of human intelligence. However, in the recent display of future multimodal transportation and warehousing operations, unmanned driving, unmanned warehouses, and fully automated sorting equipment will eliminate the widespread phenomenon of terminal power rent-seeking caused by insufficient incentives in central/state-owned enterprises under the constraints of existing institutional mechanisms at nearly zero cost. The fully automated production planning and scheduling of logistics operations/services under artificial intelligence will greatly improve the market competitiveness of central/state-owned enterprises.


From this, it can be seen that although the above-mentioned technological innovations such as the Internet did not show a revolutionary innovation trend at the beginning, and may constantly be revised or even run counter to the trend in technological development, they have explored how to replace traditional paths with "near zero cost" by combining the supply and demand relationship with the resource end, production end, and consumption end, as well as trade/logistics channels, We have found a transformation path from non standardization/scaling to standardization/scaling, which has also driven the rapid development of new industries.


The same applies to 5G technology, which is mostly an improved version of traditional technologies such as 2G-3G-4G in key technologies such as modulation, encoding, multiple access, networking, and ultra multiple antennas. Moreover, one performance improvement is compensated for at the expense of another performance. The NOMA (Non Orthogonal Multiple Access) proposed on top of Orthogonal Multiple Access achieves resource sharing among multiple users, but it reduces system efficiency; The network still adopts a mixture of time division duplex and frequency division duplex to achieve full duplex in the target; Especially, the density of base stations should be combined with cost considerations and actual market demand.


But 5G networks do mean ultra fast transmission speeds, especially micro base stations and large-scale adaptive arrays set up in densely populated areas, which can achieve low-cost and efficient integration of video streaming, virtual reality/augmented reality (VR/AR) technology, and intelligent devices in multiple scenarios. On the one hand, they support the improvement of flexibility, adaptability, and self consistency of "big cloud mobile intelligence" information technology in the interface of production, consumption, and commerce/logistics, Thus, it has the ability to significantly and extensively improve the transition from non standardization to standardization at near zero cost; On the other hand, based on the real-time transmission capability of larger data volumes, it is possible to deeply develop consumers' sense of smell, touch, taste, and immersive roaming functions to achieve ultra-low cost and more accurate docking of supply/demand relationships, which is easy to scale up.


Despite the lack of revolutionary innovation in 5G technology itself, the potential near zero cost, higher efficiency, and the transition from non-standard interfaces to standardized interfaces in the evolving industrial supply chain will become the fulcrum for leveraging the transformation of the entire social industrial structure. This will also enable various industries and regions to achieve resource allocation optimization across functions, time, space, and logic. From intelligence to intelligence will become the hallmark of the 5G era.


Smart logistics is divided into four levels.


The first generation of intelligent logistics is to optimize the allocation of resource elements within each function. At present, it can fully achieve quantitative optimization, such as the optimization of transportation/distribution path, storage inventory, facility planning and layout, including the "cross dock" of Wal Mart's distribution center, the "milk delivery line" of 7-11 warehouse distribution, and the "re go back" and "node networking" operation modes that many transportation/storage enterprises are striving for.


The second generation of smart logistics optimizes resource element allocation across functions. Amazon's "1-hour delivery" service for gold members is to set inventory next to gold member customers, use the AWS platform to accurately predict customer needs to control costs, and use the "storage instead of transportation" model to achieve real-time response to demand; The Changzhi Lucheng Modern Smart Logistics Park, planned by the author in the context of the "Blue Sky Defense War" in the Beijing Tianjin Hebei region, fully utilizes idle resources within the management of the Beijing Railway Bureau and accurately predicts the production cycle of steel enterprises, achieving the "transportation and storage" of the 35 ton open top box pendulum train, comprehensively meeting environmental protection needs and cost control needs.


The third generation smart logistics should be called the smart supply chain, which directly changes the industrial structure of the entire production, consumption, and trade/logistics industry chain through the comprehensive optimization of logistics and upstream and downstream systems. The well-known "pithead power generation" is a form of smart supply chain application. It can be foreseen that the smart supply chain supported by 5G will deeply change the industrial structure transformation in the future.


The fourth generation smart logistics optimizes the allocation of cross chain factor endowments and resources between parallel homogeneous/heterogeneous supply chains. The traditional single supply chain studies the interest game and win-win situation between different business entities upstream and downstream, and how to shorten the investment cycle from input to output; The parallel smart supply chain should focus on researching how to fully find idle resources in the parallel supply chain and how to achieve "no capital, no profit" output before investment.


In the 5G era, the key to innovation in smart supply chains lies in finding a path from near zero cost and efficient interface non standardization to standardization/scaling.


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Author: Liu Dacheng, Vice President of the Internet Industry Research Institute and Director of the Logistics Industry Research Center at Tsinghua University, Doctoral Supervisor of the Department of Industrial Engineering, Executive Vice Chairman of the Railway Journal, Executive Vice Chairman and Chairman of the Expert Committee of the Dangerous Goods Professional Committee of the China Transportation Association, and Chairman of the Digital Agriculture Committee of the China Association of Agricultural Products Circulation Brokers, Vice Chairman and Chairman of the Smart Supply Chain Special Committee of the Beijing Alliance for Integrated Services of Two Modernizations, and Chief Expert of the Logistics Weekly of Xinhua Economic Reference News Agency.

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