Cainiao launches enterprise smart warehouse solution to tap on the US$25 billion market

80 per cent 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 per cent, and achieve an overall accuracy of 99 per cent in the areas of sortation and parcel handling

Cainiao Network, (“Cainiao”), the logistics arm of Alibaba Group, today announced the launch of its enterprise smart warehouse solution to accelerate digitalization momentum for the industry and contribute to mitigating the pandemic-induced supply chain disruptions, which is expected to last through 2022.

Here, the Cainiao team 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 modelling in the form of two- and three-dimensional spatial visualization which 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 to track 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.

This 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. With the commercialization of Cainiao’s smart warehouse technology, businesses will be able to leverage Cainiao’s automation technology to increase logistics efficiencies, streamline warehouse processes and overcome manpower shortages.

Globally, 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, at a Compound Annual Growth Rate (CAGR) of 11.5 per cent. However, it was found that more than 80 per cent of warehouses today have no automation capabilities. With the eCommerce 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.

“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 knowhow to the rest of the world to safeguard operational efficiencies of cross-border eCommerce logistics,” said Dr. Ding Hongwei, General Manager, Cainiao Technology.

Launching the largest smart warehouse in Southeast Asia to accelerate warehouse digitalization

In Cainiao’s first overseas partnership with Flash Express, an eCommerce logistics company in Thailand, a 20,000 square meters host facility was built, with 100 AGVs used within a 5,000 square meters area. This is the largest smart warehouse in Southeast Asia, built with Cainiao’s technology to improve their storage accuracy and warehouse pick-up efficiency. Here, Cainiao’s technology helped warehouse employees to reduce distance travelled by 90 per cent, and achieving an overall accuracy of 99 per cent 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 up to ten times of 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,” added Ding.

Cainiao’s smart warehouse technology and capabilities

The smart warehouse solution builds on Cainiao’s years of logistics innovation. Over the past eight years, Cainiao has been prioritizing its innovation efforts to develop new solutions that can digitalize the entire value chain. Its 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 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 per cent improvement in productivity. During Double 11 last year, the Xiasha warehouse processed a third of all parcels designated for Hangzhou’s bonded warehouses.