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

Cainiao said its logistics robots and automated systems would increase productivity and reduce manual labour at Nestlé’s automated DTC fulfilment centre in 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 at Nestlé.

Cainiao supplied 40 AGV robots to replace manual product picking in sorting facilities, which is estimated to quadruple fulfilment centre efficiency compared with 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 2000-square-metre fulfilment centre during off-peak seasons.

“Some 6000 orders are picked and packed at the centre during off-peak seasons,” said Yura Zou, head of e-business supply chain for Nestlé in China. “The robots have saved our staff an average of 20,000 steps every day from walking around trying to find the products.”

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

Pandemic-related limitations imposed by local governments in China prompted many warehouses to shut down across the country last year. Going forward, Nestlé can shift order fulfilment to its DTC centre 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,” said Zou.

The fulfilment centre will support Nestlé’s expansion into the DTC sector while supporting order fulfilment across all of Nestlé’s ecommerce 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.