On November 30, the "Smart Change, Co-shaping Digital New Ecology 2023 Kaisi Business Conference" was held in Shanghai. With the wave of digitalization and intelligence, China's automotive aftermarket has also ushered in a period of historical opportunities for innovation and breakthroughs.The following is a transcript of the speech:Hello everyone, it's time to report to you about the achievements in another year, and every year I take the opportunity of the business conference to talk to you about the progress of Kaisi's digital construction in the past year, and also talk to you about our thoughts and plans for the future.Yang Shangfu, co-founder & CTO of Kaisi, said that Kaisi has been committed to building an efficient and convenient one-stop auto parts trading infrastructure for the industry, improving the efficiency of the industrial chain, helping industry partners expand revenue, and achieving symbiosis, co-creation and win-win together.
As I have mentioned in previous business conferences, Kaisi has been committed to building an industrial Internet for the automotive aftermarket, and building an efficient and convenient one-stop auto parts trading infrastructure for the industry. The core of this infrastructure is efficiency, and with the shrinking gross profit space in the industry and increasingly fierce competition, how to improve efficiency is the key to the success or failure of this infrastructure. As the head of production and research at Kaisi, we have been doing research and development of various solutions and technologies around efficiency.
Coming back to this diagram, we are all building the digital foundation of the entire industry around this diagram, and continue to invest in R&D. In the past year, we have sorted out the architecture, strengthened the common and underlying applications, and made it more general, so that we can develop corresponding applications more quickly when new services and new scenarios come.
Focusing on the construction of digitalization, first of all, through big data analysis, we will do an overall diagnosis and develop a digital operation platform, which can gain real-time insight into the relationship between demand and quality, and more importantly, to gain insight into the contradictions between them, so that our business departments can make corresponding improvements. Of course, we will also continue to improve the market, including risk control.
Let's take a look at what specific things have been done at the upstream and downstream ends this yearFirst of all, on the maintenance plant side, we noticed that when the maintenance plant is faced with a large order procurement, the clarification and input of the demand is a cumbersome work, and what is more troublesome is that some maintenance plants also need to communicate with the maintenance master and the purchaser many times, with a high error rate and a large workload, which is particularly costly. To this end, we have developed a system based on OCR handwritten work order intelligent recognition, OCR is not a new technology, but specific to the auto parts ** chain, it has always had a problem, that is, the recognition rate is very low. Our team has done in-depth research and found that the industry is unique, because the accessories are essentially standardized, and the corresponding names are actually limited, so we have developed a handwritten work order recognition technology suitable for the maintenance industry through big data analysis, combined with OCR technology, and the commonly known data of maintenance plant inquiries accumulated by the platform for many years, and solved the stubborn problems of this industry in one fell swoop.
This system can achieve a 95% recognition rate, even if the writing is very sloppy, and even if there is a lot of oil stains on the paper, it can be identified, which greatly reduces the input workload, and more importantly, in this process, its error rate is far reduced.
In addition, we have spent a lot of time, including the business team, has been promoting merchants and friends to do inventory docking, by the beginning of this year, the platform inventory docking rate has been relatively high, but we have found that new problems have arisen, after the inventory docking up, does not mean that merchants can report and sell. We have done another thing, based on the diversion and procurement recommendation of merchant inventory, reduce traffic mismatch, improve traffic efficiency by 30%+, shorten customer waiting time, and greatly reduce the burden of merchants and improve the conversion rate.
After the automatic reporting system, we were thinking about whether it could help merchants and friends to sell better and reduce greater workload, so we went to recommend the system's procurement plan.
When the maintenance plant purchases accessories, it is actually quite complicated, especially in the face of the current market sinking, including the sinking of quality, you will find that in fact, for a whole order, under the premise of reliability, the maintenance plant must ensure gross profit, and at the same time ensure that the car is repaired, on such a basis, in fact, the procurement is no longer as simple as the original, this time you need to use a combination of multiple qualities.
In response to this kind of problem, for specific procurement products, we have recommended procurement plans, which also need to be continuously optimized, in this process, the more we do, the better the accuracy rate or applicability of the recommended solutions, which is a continuous work.
There are many things that cannot be sold after the digitization of commodities and the docking of inventory, which is essentially the relationship between data, such as the relationship between matching and substitution. We have developed an intelligent commodity and inventory diagnosis model, through this system, merchants can automatically identify why the goods or inventory are not reported, why they are not sold, in which process the problem appears, and how should it be adjustedThe system will give automated recommendations. From the perspective of effect, the reporting rate of commodity automation has increased from about 50% in 2021 to 94 in one fell swoop5%, this aspect of the work, I believe that dealer friends should be deeply experienced, the original work through manual work, not only time-consuming, more important is the requirements for personnel is quite high, I ran so many businessmen, found that each of the first business can really do this work of people, very few, so this is indeed a very good thing.
With the sinking of the market, including the sinking of services, opening a store in Guangzhou, you can radiate to the scene all over the country or such a state is gradually disappearing, at this time you want to sell more, you have to open more stores, of course, you can now follow us to open more shared warehouses. No matter which model, the management requirements for you are going up, if you still follow the original way, basically rely on the manual way, not only the workload is large, but also the cycle of training personnel is too long, simply can not meet the era of such rapid change.
Because of this matter, on the basis of the original merchant background, we have developed an intelligent warehouse management system and a digital merchant workbench, which have realized the standardization of accessories data, intelligent procurement and multi-warehouse, automation of procurement, sales and inventory process, sales billing automation, efficient PDA scanning in the warehouse, and business analysis data, so that merchants can truly catch the bus of digital transformation, and can realize the linkage between multiple warehouses and the flow between multiple stores.
After this set of things is made, there are some business friends who have been using this thing, and now you can take a look at the results, a merchant in Guangzhou, one person to get the linkage of ten warehouses, including the allocation of inventory between each other, as well as the warehouse stocking, and the turnover rate of a single warehouse can reach 05-1.2 months. In addition, in terms of operational efficiency, through this system, the operational efficiency of the warehouse can be improved from 300,000 person-months per capita to 700,000 person-months in one fell swoop.
In terms of sales, we have achieved in-depth integration, which can achieve ERP automatic billing, and the efficiency of salesmen can be increased to more than 30%.
Focus on the best model of stocking, do sinking, do warehouse or open a store, many friends have not thought about a question, what is the core competence required to build a warehouse or store, and why have there been so many failure cases over the years?Through in-depth communication with business friends, we also read a lot of relevant materials, and found that there is actually a very important thing behind it - how to do a good job, whether it is accurate or not, this is very important, we don't want to let the hard-earned money eventually become the inventory in the warehouse, and this inventory has become an iron lump with the aging of the model, we have to avoid this happening.
Through the current system, we practice, the effect is actually very good, the use of this model of business, the best turnover rate of about 20 days, I don't know who are the business friends here in the operation process before, the inventory turnover rate can do 20 days
In addition to this, warehouse automation is actually indispensable, in our industry, what is the core of warehouse automation?The standard of data and the unity of data are the core of the core. In the past few years, Kaisi has paid great attention to the construction of basic data, so we have this foundation, and because of this, we have re-standardized, built the underlying standardized data of the industrial chain, and really let your goods into my warehouse, I can identify, and there will be no mistakes.
Because we have built a set of data standardization and unified basic data, coupled with an intelligent warehousing system, we can achieve efficient warehousing and fine preparation. Now warehouse managers only need a person who has graduated from a secondary school or college to work after a week of training.
Looking forward to 2024, from the perspective of R&D, we are ready to build an efficient digital channel for the whole industry chain, including OEMs, brand owners, and dealers, all of whom will be included in this system. On the dealer side, we will deepen the digital workbench of merchants. What do we want to do in the whole chain?Our products are circulated efficiently and service is delivered directly to the workshop.
Just now, when Mr. Wu, general manager of Zhejiang Xingao Automobile Sales Service, shared, he said that there was a problem with the purchase of an accessory, and if you want to sell it, you need to give feedback at all levels, first feedback to the dealer, and then the dealer feedback to the manufacturer, and also stamp an official seal. I believe that in the future, this kind of thing will basically not happen through this system, because it can directly reach the manufacturer.
Of course, we also hope that whether it is the OEM, the factory or the brand, the marketing can directly reach the users, so that the repair shop or the owner knows that your marketing is spent on them and is really paying for their experience, just like Mr. Tang, the sales director of the German Continental tire replacement market, shared just now.
Finally, I would like to talk about the R&D mission, we continue to use scientific and technological means to improve the efficiency of the industrial chain, help friends here expand revenue, let us coexist, create and win-win together.
Thank you!