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Problems arising from (fast-moving consumer goods) FMCG supply chain
There are several characteristics of FMCG: fast inventory turnover, scattered distribution of retail stores, high-frequency consumption at low cost. In the third-tier and below cities, there are two significant problems for the dealers of retails:
1. It is difficult to form a large-scale, standardized business model, mostly because of extensive operations, non-standardize procedures hence low efficiency.
2. Dealers need to distribute their items very frequently to each store, hence a high proportion of the cost is in logistics
These problems are especially true for distributors in third-tier and below cities. This is because, in the first and second tier cities, there are many retail stores and supply chain is efficient, and there is clear access to information. The upper-level distributors or brands are mainly transported on trunk roads, hence the cost is lower.
This article about upgrading supply chain efficiency to tackle the two problems.
Zhou Pu Data has launched SaaS products covering dealers’ management activities and established third-party warehouses and distribution systems to optimize and enhance the efficiency of the retail supply chain of FMCG.
How can Zhou Pu improve the efficiency of the retail supply chain
Zhou Pu data launched three main services: Zhou Pu Cloud Warehouse, Zhou Pu Cloud Housekeeper, and Zhou Pu Cloud Marketplace.
Zhou Pu Cloud Warehouse
Zhou Pu Cloud Warehouse, the core service of ZhouPu Data, solves problems faced in high logistics cost.
In the third-tier cities and below, there are few mature third-party logistics services, and dealers need to build their own warehouses and fleets to distribute their own brands. What Zhou Pu Cloud Warehouse offers is a warehouse and fleet in each area (usually the county), and integrate the original scattered storage and distribution requirements through information management and smart dispatch.
Through this model, Zhou Pu improves resource utilization and warehouse efficiency, thereby significantly reducing dealer logistics costs. Therefore, dealers can focus on product development and expand sales.
Retail stores are also able to benefit. Originally, the delivery time is scattered. With a sharing delivery concept, delivery time can be greatly shortened. In addition, with shared delivery, retail stores are able to order goods in small quantities and saving inventory space.
According to data provided by Zhou Pu, the cloud warehouse service started operations in February 2017 and is now in four regions. The first warehouse has signed agreements with 10 large-scale dealers, with a monthly distribution of 20 million yuan and a monthly income of 600,000 yuan.
Zhou Pu Cloud Housekeeper
Zhou Pu Cloud Housekeeper is a channel distribution management system covering the dealer’s full business process. It digitizes and standardizes the dealer’s business activities, thereby improving management efficiency and achieving staff reduction and efficiency.
Specific functions include sales management, inventory management, salesman performance management, customer management, financial management and so on.
Zhou Pu claimes that since the launch of the cloud housekeeper in September 2016, it has successfully landed in 120 cities, and more than 1,000 dealers are actively using it. The annual revenue per client is nearly 4,000 yuan.
Zhou Pu Cloud Marketplace
Zhou Pu Cloud Marketplace is a trading platform for upstream and downstream parties in the supply chain. Retail stores can view dealers’ products, place orders, view past orders and statistical information through the cloud business app. This way, dealers can realize online transactions, effectively manage and expand the channel network, thus buy at the lowest cost.
Through the above three products, Zhou Pu helps dealers to digest information and enables the digital transformation of their entire operation and management sales process. This reduces storage and logistics costs, and ultimately improving the efficiency of the FMCG supply chain.
Enabling technology to facilitate business operations
Although Zhou Pu currently rents and operates warehouses and fleets on its core business “Zhou Pu Cloud Warehouse” by collecting dealer warehousing and distribution costs, what Zhou Pu really wants to do is provide an overall smart supply chain solution, training, consulting, software services, help other companies to do “warehouse cloud computing.”
ZhouPu is still involved in warehouse operations because they want to really understand the needs of customers and use it as a model for future training and demonstration.
Reasons why ZhouPu wants to be a tech-solution provider and not a traditional logistics company:
- Team. The core team of Zhou Pu has strong strength in IT, big data, AI and other technical fields (see the introduction of the team at the end of the article);
- Speed of expansion. The model for providing SaaS and solutions is relatively light and easy to expand;
- The value of Big data. As a SaaS platform and solution provider for the retail supply chain, Zhou Pu can gain a lot of real business and sales data such as:
- For warehousing: it is possible to optimize the warehouse plan and distribution scheduling model;
- For dealers: it is possible to clearly calculate and analyze the overall operating status, and to optimize the cost, forecast the demand, and formulate marketing strategies.
- For supply chain financial services: ZhouPu can tap on dealer’s business data, including warehousing logistics, capital flow, transaction flow, etc., to solve dealers’ problem of loan difficulties.
Regardless of whether a dealer exists or not, the value of the supply chain efficiency will exist.
We often hear slogans like “eliminating middlemen”. If the brand is directly connected to the retailer and the dealers are greatly reduced in the future, will the service system provided by Zhou Pu be greatly affected?
In response to this question, Zhou Wenbiao, co-founder of Zhou Pu Data, said to KrASIA’s parent company 36Kr:
For FMCG, dealers have three main responsibilities: to promote local transactions; to provide logistics services; to help manufacturers quickly withdraw funds and share risks with manufacturers.
Even if the dealers are replaced one way or another in the future, these functions still exist, the supply chain still needs to operate, and the demand for efficiency will exist.
Zhou Pu data was established in Nanjing in December 2015. In February 2016, it scored a 22-million-yuan of angel fund. In January 2018, it completed a 39-million-yuan Pre-A series. In terms of revenue, Zhou Pu is expected to reach 30 million yuan this year. Currently, there are more than 200 people employees.
Founder and CEO Miao Jiangbo, a former senior technical director at Facebook for 6 years, has led Facebook advertising business with a data-driven approach successfully. Before joining Facebook, Miao Jiangbo had 6 years of research experience at Microsoft. Miao Jiangbo holds a bachelor’s degree and a master’s degree in CMU from Tsinghua University.
CTO Mu Wei is a former Google Cloud AI Staff Engineer (Bachelor/Master of Computer Science of Tsinghua University and PhD in Computer Science of North Carolina State University). Prior to joining Google, he worked at Microsoft, Facebook, and Square, where he worked on the development and management of big data and machine learning.
Co-founder and COO Song Wei, has served as Purchasing Supervisor, Logistics Director, Vice President of Marketing, Vice President of Commerce, Chairman of the Board of Directors of STONE & WEBSTER, SHAW Group, Australia WORLEYPARSONS, Sinochem Group, Shude Investment Group, etc. Assistant, general manager and other positions.
Co-founder and CMO Zou Wenbiao, who participated in the founding of China Dating Center (predecessor of Zhenai Net) in 1999, has served as the deputy editor of CCID. He has worked in Baidu and Shopex. Zou Wenbiao holds a bachelor’s degree from Tsinghua University and an MBA from Peking University.