Before the advent of new manufacturing, Nestlé, a century-old giant, has already revolutionized itself twice. When you need to deliver three different products to three consumers as quickly as possible, the shortest path is easy to plan. But when you need to deliver tens of thousands of products to tens of thousands of consumers as quickly as possible, only technology and algorithms can help you plan the most efficient route. As a century-old company, Nestlé has more than 20 brands, thousands of products, multiple online stores, and countless offline stores. Every day, hundreds of millions of products must be delivered to hundreds of millions of consumers through different channels. The challenge arises: how can products be delivered to consumers via the best route? As e-commerce sales continue to rise, the demands on logistics have also increased. In 2016, Cainiao proposed the concept of "one inventory pool." At that time, Jack Ma had just introduced the concept of new retail. Many brand owners faced challenges, but they did not fully understand what new retail would become or how to reconstruct people, goods, and scenes. "If you think from the endgame perspective, it's about placing the products consumers love in the right place at the right time." Zou Yu, Director of E-commerce Supply Chain at Nestlé (China), is responsible for the supply chain of Nestlé's online sales in China. Initially, she had a vague idea of the future of new retail. But when considering it from the endgame perspective, Nestlé and Cainiao began a new exploration—"one inventory pool." They hit it off immediately, both excited. They found a large whiteboard and began sketching a brand-new chain based on the "one inventory pool." Just one month later, a comprehensive online inventory management plan was officially launched. "We collaborated and sparked ideas together." In an interview, Wang Lei, Vice President of E-commerce at Nestlé China, repeatedly mentioned the word "collision." For the new concept of "one inventory pool," the Nestlé team and the Cainiao team continuously brainstormed and iterated. The full integration of the supply chain was an adventure for both the brand and Cainiao. From the moment the whiteboard was laid out, it marked the starting point of their intellectual collision. Today, as more brands see the value of "one inventory pool" and join the Cainiao system, Nestlé and Cainiao have already begun to consider more distant issues. 〈 Yesterday Is it difficult to ensure no stockouts, freshness, and fast reach? 〉 "First, no stockouts. Second, freshness. Third, fast reach. These are consumer demands and the starting point of our entire chain planning." These requirements seem simple, but for the Nestlé e-commerce team two years ago, they were difficult to achieve. With more than 20 brands, thousands of products, and multiple online channels, these goods were scattered across different channels without interconnection. For example, a Tmall flagship store might sell out quickly during a promotion, while a Taobao store still had surplus goods lying idle. The first step Nestlé and Cainiao drew on the whiteboard was to integrate the goods of the four major platforms—brand flagship stores, Tmall Supermarket, Rural Taobao, and Retail Link—and share inventory. This way, Nestlé's goods on Alibaba's online channels would be arranged in one unified plan. Inventory sharing and data integration mean that goods in the channels are not exclusive to a particular store but are uniformly allocated according to market demand at any time to fulfill orders across all platforms. At the same time, the existing supply system also required major surgery: "The chain needs to be fully planned, analyzing which parts to remove, which to restructure, and which to supplement." Better to endure short-term pain than long-term pain. In implementing the one-inventory-pool strategy, Zou Yu and her team made significant adjustments to their suppliers. Previously, Nestlé's products had to pass through different distributors to reach different warehouses. After the one-inventory-pool strategy, Nestlé's central warehouse directly delivers to Cainiao's regional warehouses, eliminating the logistics link of distributors. All information runs within the Cainiao system. The sales situation of various stores on Tmall and Taobao is dynamically reflected on the Cainiao network, eliminating the embarrassment of Tmall being out of stock while Taobao has surplus. Moreover, by predicting sales trends through data, the data can issue stockout warnings and guide replenishment plans, optimizing inventory allocation and making the supply chain agile. Soon, Nestlé's various indicators changed significantly: The order fulfillment rate increased from over 80% to 97%, the cross-warehouse shipment ratio dropped from 60% to 10%, and the online availability rate increased from an average of 87% to 95%. It's worth noting that the general e-commerce requirement for brand owners is a 90% availability rate, and Nestlé now far exceeds this level. Setting aside the dry data changes, from the consumer perspective, consumers can get the products they need at any time and in any way. From the enterprise perspective, not only has supply chain efficiency greatly improved, but costs have also significantly decreased, and inventory cycles have been reduced. Even the company's operating model is quietly changing. This is the magic of the new supply chain. The biggest difference between the new retail supply chain and the traditional supply chain lies in data: starting from the brand and ending at the consumer, letting data run first. After data finds the optimal path, it dispatches products to reach consumers via the best route, with the fastest speed, highest efficiency, and best experience. Using data to command goods makes the entire supply chain agile. 〈 Today Old brands in the new retail era: Don't be afraid! 〉 Zou Yu, Director of E-commerce Supply Chain at Nestlé (China) "Some old brands are very afraid, but I think they shouldn't be. They must identify their own capabilities." After more than a year of operating the one-inventory-pool strategy, Wang Lei and Zou Yu have deepened their understanding of new retail. When new retail was first proposed, old brands felt it was impressive but incomprehensible. After cooperating with Cainiao, they have become increasingly clear about the value of both parties: Nestlé, as a brand company, has its core capability in products; Cainiao, as a technology company, has its core capability in data. Both parties must build their core capabilities to the strongest, while also achieving greater energy through comprehensive integration. "Old brands should leverage data capabilities to maximize all their strengths," Wang Lei said. This year's Tmall Double 11 is approaching. Nestlé's supply chain team has already engaged in deeper cooperation with Alibaba, aiming to further expand the results of the one-inventory-pool strategy and to fight a beautiful battle on the tenth Double 11. For example, RT-Mart is part of Alibaba's new retail ecosystem. The warehouses of Tmall and RT-Mart have also been integrated. As it enters the one-inventory-pool system, "the integration of RT-Mart's East China warehouse has significantly relieved pressure for our Double 11," Zou Yu said. Another example is Anxian Da's one-hour delivery service. Through cooperation with Tmall Supermarket and Anxian Da, Nestlé will achieve one-hour delivery during Double 11. This old brand is also embracing new trends. One-hour delivery brings customer delight and satisfaction, which will also be part of the consumer experience. In addition, there is another important upgrade: cross-border e-commerce. This year, Cainiao will provide global supply chain services during Double 11. Imported goods will be picked up directly from overseas sources instead of at warehouses or ports upon arrival, reducing supply chain costs for merchants and improving logistics efficiency and consumer experience. After this service upgrade, merchants' production or warehousing bases will become the starting points of Cainiao's global supply chain. Cainiao will pick up goods directly from the merchants' places of origin, then transport them to ports and airports, and complete export customs clearance. For multinational companies like Nestlé, cross-border logistics was once a major pain point, as good products could not flow globally efficiently due to complex logistics. Cainiao's service allows Nestlé, as a brand, to focus on products and marketing, while all the "troubles" in between are handled by the more professional Cainiao. "Cainiao's significance to us is not just as a supply chain company, but more as a supply chain system of data and technology. We also have many logistics supply chain companies. In our view, the biggest difference with Cainiao is that it pursues the same thing as we do: to reconstruct the entire supply chain model through digital and technological means. " Wang Lei said. This year, Nestlé's one-inventory-pool strategy is fully integrating into the broader Alibaba ecosystem. In addition to the aforementioned RT-Mart, Anxian Da, and cross-border e-commerce, other new retail formats under the Alibaba system, such as Retail Link, offline small stores, Hema Fresh, and smart vending machines, are all under Nestlé's consideration. "In this integration, Cainiao plays a leading and core role, like an engine turning in the middle, driving other supply chain infrastructure designs under Alibaba to collaborate." "After more than a year of operation, the foundation of this one-inventory-pool strategy is very solid and scalable. Next, we need to see how large we can expand it." Wang Lei's expansion includes two aspects: horizontally, connecting more platforms; vertically, deeply mining the wisdom of data. 〈 Tomorrow Using data to change the entire business operation model 〉 "Cainiao's significance to us is not just as a supply chain company, but more as a provider of data and technology. We hope to use data and technology to change the entire business operation model." When the new opportunity of digitalization arrives, successful companies in the past may not have realized the turning point. "Companies that haven't done so well in the traditional field are more resolute in their determination to change, possibly because the pain of traditional methods is more intense, so the urgency for transformation is higher," Wang Lei said. This determination and urgency have allowed Nestlé to go further and earlier on the path of digitalization. The changes brought by the one-inventory-pool strategy have further amplified Nestlé's ambitions for digital transformation. Using digitalization to drive Nestlé's overall transformation is the future that Wang Lei and Zou Yu are considering. Currently, Nestlé is conducting more experiments with Cainiao in digital supply chain, which will be the first large-scale digital supply chain project across companies in the industry. Here, Dongdong (the author) would like to add a note: in the past, data could not synergize to achieve greater effects due to data barriers between enterprises. Nestlé and Cainiao's approach may serve as a reference for other companies. Data integration is an unavoidable trend. Instead of being overly worried and stagnant, it's better to actively find ways to ensure data security through technology and systems. Let's return to this future exploration. Nestlé plans to cover the entire chain with data, from Nestlé's factories to Cainiao's large warehouses to consumers, making the entire chain transparent and visible. In the future, through the integration of data between the two parties, big data will drive the intelligent upgrade of warehousing and distribution, further influencing the upstream of the supply chain. For example, in product development, previously R&D personnel conducted market surveys, then developed new products, and tested them in the market. In the future, big data can provide insights into the preferences of different consumer groups in different regions, guiding R&D in reverse. Another example is production. Previously, production plans were made and then batch production was carried out. In the future, C2B customized production can be implemented on a larger scale to meet consumers' personalized needs. After the chain from Nestlé to consumers is fully connected, Nestlé will transform its upstream suppliers in the future, so that from the source suppliers to consumers, the entire chain will be fully connected. What do you feel when you see these future plans of Nestlé? That's right, this is a transformation driven by data and technology, from new retail to new manufacturing. With consumer demand at the core, digital and technological forces drive the reconstruction of retail scenarios, and will further push upward, gradually realizing the transformation of new manufacturing in the future. Those with a keen eye may remember that more than two years ago, Jack Ma proposed new retail, and this year he proposed new manufacturing. At that time, some people were confused about new retail, either ignoring it or waiting to see. Companies that dared to change are now already enjoying the dividends of new retail, like Nestlé. Perhaps today, many people still do not fully understand new manufacturing, but they cannot hesitate any longer. Just like more than two years ago, when Nestlé and Cainiao had no specific path for implementing the one-inventory-pool strategy, they took a whiteboard and drew, collided, and collaborated to achieve today's results. 【Closing Remarks】 "Previously, we focused on KPIs, efficiency, and costs. Now we see more of what customers and consumers need. The shift in core values will drive the iteration of mindsets and behaviors." When the core changes, the boundaries also change. Previously, supply chain was supply chain, business was business, and they were different departments within the enterprise. Now, to realize the consumer-centric new retail scenario, these departmental boundaries disappear. All departments must collaborate, and even the organizational structure may be restructured in the future. At the same time, the boundaries of enterprises are also blurring. Nestlé and Cainiao collaborate and integrate in a special way, thereby creating greater value through the new supply chain. What exactly is new retail? What changes will new manufacturing bring? The future has never been predicted; it is created through practice. Change has no end. The whiteboard that Nestlé and Cainiao drew together will continue to produce even more magical "pictures." -END-