Cainiao Group, the logistics arm of Alibaba Group, signed a cooperation agreement with consumer goods company Procter & Gamble (P&G) this week to create an AI-powered supply chain.
The partners aim to reduce transportation costs and carbon emissions. They are deploying a fulfillment algorithm that can predict demand for goods and then consolidates cargo headed for the same address.
Cainiao is leveraging its technology to provide supply chain solutions and will help P&G upgrade its own fulfillment services, Shuai Yong, Vice President of Cainiao Group, noted in a statement.
The delivery service has developed an end-to-end green logistics system from purchase to delivery, including paperless shipping labels, smart route planning, recycling, and solar-powered warehouses.
More companies are examining the environmental impact of their supply chains. Up to 90% of an organization’s greenhouse gas emissions, and 50% to 70% of operating costs, are attributable to supply chains, according to a report by research group CDP.
Cainiao and P&G, owners of household brands like Pampers diapers and Gillette razors, are working together in other ways in interest of sustainability.
Earlier this week, the two companies also announced their first jointly built front warehouse. Located in Zhejiang, the site functions as a halfway point between P&G factories upstream and consumers and retailers downstream.
Using the recently unveiled fulfillment algorithm, the company will be able to pinpoint demand and quickly meet it with Cainiao’s network of cargo vehicles.
The two companies are developing a solid and lasting foundation for cooperation, said Yin Chao, Vice President of P&G Greater China Supply Chain Operations, in a statement.
During recent major shopping festivals like 11.11, they have also collaborated on using parcels and wrapping methods to cut waste.