Designed for mass customization, Inspur Information’s supply chain was highly regarded for its sophistication, efficiency, flexibility and resilience
Inspur Information, a leading IT infrastructure solutions provider, is recognized as part of the IDC Supply Chain Technology Leaders Program for its “Digital Supply Chain Enabled by the JDM (Joint Design Manufacture) Business Model” project.
The IDC Supply Chain Technology Leaders Program recognized organizations in the Asia/Pacific region excluding Japan, for their outstanding achievements in the digital transformation of supply chains. A total of 10 projects, including from Inspur Information, were selected by the jury consisting of global IDC analysts, academic experts, experts from research institutions, and representatives of end-users.
Inspur Information continues to refine the JDM model and supply chains by leveraging new technologies such as AI, 5G, edge computing, and cloud computing. This innovation has transformed the traditional cost-cutting supply chain into a new customer-centric supply chain, which was highly regarded by the jury for its sophistication, efficiency, flexibility, and resilience.
Reshaping the supply chain through digital transformation, and customization with higher agility and efficiency
Inspur Information’s JDM model is a customization-oriented business model driven by customer needs. Riding the wave of integration of the cloud, big data and AI, cloud computing service providers are committed to developing innovative applications such as cloud, AI and edge computing, while seeking ways to disrupt the traditional business model for standardized server production. The customers need server manufacturers to provide customized products, solutions and services to adapt to new business lines and scenarios. Inspur Information created the JDM model to better support cloud computing service providers, and popularized customized products and services across the IT market, ushering in a new era of customization in the IT industry.
An agile, flexible and resilient new supply chain is the cornerstone of the JDM model. Inspur Information is making an ongoing effort in the digital transformation of the supply chain, establishing an intelligent, end-to-end supply chain system connecting upstream suppliers and downstream partners.
Inspur Information’s supply chain was designed for sophisticated mass customization far above the industry level. Personalized product orders account for more than 80% of Inspur Information’s business, involving nearly 200 products in 115,000 configurations. Despite this complexity, Inspur Information remains a global leader in supply chain agility and continues to reduce costs. The company has shortened the development cycle for new products from 1.5 years to 9 months and can go from development to delivery in less than 3 months. 97% of production orders can be confirmed within 24 hours and delivered in 5-7 days. Although the prices for key components increased by 5.5% overall in 2021, Inspur Information was able to reduce the cost of key components by 3%, a total cost savings of nearly 150 million USD for its customers.
A resilient, intelligent supply chain for on demand-delivery in the global supply crunch
Despite worldwide component shortages, Inspur Information’s components supply remains stable, even with increasing sales. In the first quarter of 2022, the company’s revenue increased by over 48% year-on-year.
The resilience of Inspur Information’s supply chain is the result of years of effort in improving supply chain process and digital transformation. Inspur Information requires that every component has a substitution rate of over 100%, and has defined exact requirements for the geographic distribution of suppliers. The highly fault-tolerant supply chain allows Inspur Information to deal with the component supply issues with ease through component substitution. In 2021, Inspur Information completed the substitution verification for more than 1,500 key components, eliminating delivery risks for 150,000 servers.
Inspur Information has deployed dozens of information systems such as ERP, MES, WMS and PLM, and built a global supply chain control tower, a panoramic customer ecosystem platform, a supplier ecosystem collaboration platform, a digital factory, and other core platforms. All business processes are highly automated, with 96% of production orders generated and 98% of material plans executed automatically. The supply chain control tower enables the formulation of both forecast-based demand and material procurement plans and order-driven production and material plans. This forms a dual management model for linking supply and demand to support the planning and coordination, production capacity planning, and 52-week rolling forecast for Inspur Information’s 10 manufacturing facilities strategically placed around the world. Meanwhile, Inspur Information has established 6 cross-organizational supply guarantee teams, which work to empower key suppliers, strengthen the management of tier-2 and tier-3 suppliers, enhance supply sharing policies and ensure the stable supply of components and materials. As a result, the company’s on-time fulfillment rate for orders has remained above 98%.
Setting a model for IT companies seeking digital transformation
Inspur Information has become the world’s second server supplier and the world’s largest AI server supplier, thanks to its initiatives including the JDM model, supply chain reconstruction and digital transformation. The company’s success is about more than providing digital and intelligent products and solutions for various sectors. It also sets a path for the industry to follow with its innovative business model and supply chain enabled by digital and AI technologies.