Transforming Industrial Supplies with AI: Insights from ZKH CTO at the WuZhen Dialogue during the World Internet Conference
At the recent 2024 People's Night-WuZhen Dialogue during the World Internet Conference. ZKH CTO, Liu Yang, shared his insights about leveraging AI in industrial supplies through an exclusive interview with People's Daily Online . Here are the key highlights of the conversation:
Q1: What are your key takeaways from attending the World Internet Conference-Wuzhen Summit for the second time?
A: I have two very clear impressions:
First, the trend of large models is becoming increasingly apparent, shifting from foundational development to practical applications.
Second, from the perspective of industrial practice pathways, there is a gradual transition from the consumer internet to the industrial internet.
Last year, discussions mostly revolved around overseas large models, but this year we are seeing more applications of large models across various domestic industries, including our own industrial supplies sector. This has increased the possibility of forming new super apps.
Q2: How has the concept of an industrial supermarket evolved in the digital era?
A: We initially proposed the concept of an industrial supermarket with a core starting point: addressing the unmet needs of China’s vast manufacturing enterprises in their digital procurement processes. The industrial supplies industry has several notable characteristics:
First, the product categories are extremely diverse, especially as China is a major manufacturing powerhouse. Second, it is challenging to compare and select products because of the overwhelming volume of data. Third, traditional procurement methods were primarily offline and rooted in traditional trade.
Based on these insights, we set out to create a one-stop industrial supplies supermarket, aiming to address the shared demands of large, medium, and small manufacturing enterprises through digital and e-commerce solutions.
In the early stages, our operations were primarily demand-driven; we sourced products based on what manufacturing enterprises needed. At that time, our main focus was solving product listing and sales issues.
As the business developed, we realized that the number of products we needed to manage was rapidly increasing, becoming vast in scale. Industrial supplies also have highly specialized attributes—from small items like screws and nuts to large precision instruments, with some requiring hundreds or even thousands of parameters. Managing such a massive inventory necessitated digital tools, as manual efforts were insufficient.
We transitioned from demand-driven operations to intelligence- and supply-chain-driven operations. With the ability to identify and manage vast amounts of products, we began recommending items to customers. Over time, we accumulated significant industry data across various sectors. By leveraging big data analytics, we can recommend more suitable products for specific scenarios to better serve our clients.
Q3: How does AI empower the industrial supplies sector, and what challenges does it address?
A: In the industrial supplies sector, we often break the process into three stages: smart procurement, smart fulfillment and delivery, and smart manufacturing.
For smart procurement, the focus is on solving information flow issues. Smart fulfillment and delivery address logistics challenges. The procurement process has three major pain points, the "Three Highs Challenges":
To tackle these, we introduced three AI-driven tools:
What value does AI bring? Here’s an example: For the same material, different purchasing and supplying enterprises may use entirely different coding and naming conventions. It’s akin to having "a thousand Hamlets in a thousand people’s eyes." The industrial supplies industry faces this very issue.
As a platform-based enterprise, all information flows through us. Using products like the AI Material Manager, we can help businesses better understand varying descriptions and coding conventions, significantly optimizing the procurement process. Many customers have shown strong interest in collaborating on this product.
Q4: What trends and opportunities do you foresee for AI in the industrial sector?
A: Previously, digital applications in the industrial supplies sector primarily focused on improving efficiency in specific areas. Now, there’s an opportunity to redefine workflows through AI, creating a closed loop of smart procurement, smart warehousing, smart fulfillment, and smart manufacturing—forming an intelligent ecosystem.
And what would be the benefits? Achieving zero inventory and on-demand production. Once a factory completes production, packaging, delivery, and fulfillment can be automated. This significantly reduces labor-intensive intermediate processes, greatly enhancing supply chain efficiency.
With the extensive application of AI technology, manufacturing’s circulation and logistics costs are expected to decrease—a highly promising trend.
And how do we seize opportunities behind these trends? Top-level design in digitization and intelligence is particularly crucial. In the AI era, creating a digital product requires balancing product features with market needs.
For enterprises and commercial organizations, strategic evaluation and selecting the right entry points are essential. Here are some key considerations I would recommend:
Check out the full interview to dive deeper: Original Article in Chinese.
About ZKH
ZKH is a digital industrial service platform as well as a product company, providing customers with a one-stop solution of industrial products procurement and management, realizing transparency, efficiency and cost-reduction of industrial supply chain. ZKH provides a wide range of Spare Parts, General Consumables, Office Supplies, Manufacturing Assembly, Chemicals, including 32 dominant product lines with SKUs exceeding 17 million.