Cainiao CEO Wan Lin walked into the fulfillment center with Tony Domingo, Senior VP of Nestlé Zone Greater China Supply Chain & Procurement. Photo credit: Alibaba Group

Swiss food and beverage conglomerate Nestlé has opened its first smart direct-to-consumer (DTC) fulfillment center in China in collaboration with Alibaba Group’s logistics arm Cainiao Network.

Cainiao said its logistics and automated systems would maximize productivity and reduce manual labor at Nestlé’s automated DTC fulfillment center in east China’s Suzhou city.

“Together with Cainiao, we believe we can establish an efficient, responsive, and resilient supply chain with a human touch,” said Tony Domingo, Senior Vice President of Nestlé Zone Greater China Supply Chain and Procurement, at the launch of the fulfillment center on Nov. 21.

Cainiao supplied 40 AGV robots to replace manual product picking in sorting facilities, which is estimated to quadruple fulfillment center efficiency compared to Nestlé’s other warehouses with human workers only.

The robots carry products to packing lines to save time and effort for the 20-odd staff working at the 2,000-square-meter fulfillment center during off-peak seasons.

“Some 6,000 orders are picked and packed at the center during off-peak seasons. The robots have saved our staff an average of 20,000 steps every day from walking around trying to find the products,” said Yura Zou, Head of eBusiness Supply Chain at Nestlé Greater China, in a Mandarin interview with Alizila.

Cainiao said its smart supply chain would also help Nestlé manage market changes effectively.

Pandemic-related limitations imposed by local governments in China have prompted many warehouses to shut down across China this year. Going forward, Nestlé can shift order fulfillment to its DTC center to support the rise in customer demand in some regions.

“This brings us the elasticity and stability that we value the most, especially when facing external uncertainty,” Zou told Alizila from Beijing.

The fulfillment center will support Nestlé’s expansion into the DTC sector while supporting order fulfillment across all of Nestlé’s e-commerce operations in China, including the Starbucks At Home line from the Seattle coffee chain.

“With an eye on the long-term, we strive to support Nestlé with holistic and sustainable supply chain services,” said Wan Lin, CEO of Cainiao Network, at the center’s launch in Mandarin.