Smart logistics drives the innovative development of digital and intelligent supply chains.

01 The Formation and Evolution of Supply Chain Systems

The supply chain system is built upon the foundation of modern logistics. With advances in information technology and the integration of systems thinking, traditionally functional operations such as warehousing, distribution, and transportation can now achieve seamless information sharing, enabling systematic planning, control, and optimization to attain overall system efficiency. This has driven the first major transformation in logistics, giving rise to modern logistics and ushering in… The era of PD (Physical Distribution) logistics.

In the PD era, logistics achieves systematic integration across all stages of product distribution; accordingly, logistics in this era is also referred to as physical distribution or sales logistics.

As information technology continues to advance, enterprises can not only integrate the flow of goods across all stages of the distribution process and achieve systematic planning and control, but also extend this approach to the production stage and the upstream phases of manufacturing. By integrating and consolidating the logistics systems across the three major links—procurement, manufacturing support, and product sales—this approach has driven a second wave of transformation in logistics, advancing the integration of logistics systems and giving rise to integrated logistics, ushering logistics into… The Age of Logistics;

Furthermore, as information technology continues to advance, at the level of information flows, it becomes possible to integrate logistics, information flow, capital flow, and commercial flow into a single unified system. Moreover, by forging a unifying link among these four flows, it has facilitated seamless connectivity between upstream and downstream entities, giving rise to a network‑chain structure centered on supply and demand. This has catalyzed the third wave of logistics transformation, ushering logistics into the supply chain era and integrating it as an integral part of the supply chain.

At this point, the supply chain system begins to take shape. Upstream and downstream enterprises, linked primarily by logistics, form a network‑based structure centered on supply and demand, thereby establishing an ecosystem for the enterprise supply chain.

After the supply chain system is established, it continues to iterate and upgrade, evolving continuously. As… The further deepening of the “four flows in one” linkage has driven the comprehensive integration of logistics enterprises with new manufacturing, new retail, new finance, and new e‑commerce, ushering supply chains into an era of borderless transformation characterized by cross‑industry convergence. Modern information technology serves as the core engine propelling the upgrading and enhancement of supply chains. With advances in underlying technologies such as mobile internet, Internet Plus, big data, cloud computing, and optimization and operations research, This further deepens the connectivity of the supply chain, leveraging end-to-end planning, control, and optimization measures to foster efficient collaboration among shippers, suppliers, carriers, distributors, retail outlets, and warehouse networks, thereby advancing the supply chain toward a more integrated and streamlined ecosystem. In the 2.0 era, intelligent evolution has emerged, bringing smart supply chains within our reach and transforming the supply chain ecosystem into a highly efficient, collaboratively aligned organizational model.

In response to the evolution of supply chains, the General Office of the State Council has, in… In 2017, the “Guiding Opinions on Actively Promoting Innovation and Application in Supply Chains” were issued, which, right from the outset, provided a new definition of the supply chain as follows: A supply chain is an organizational structure that is customer‑demand driven, aims to enhance quality and efficiency, and leverages resource integration to achieve highly coordinated end-to-end operations across product design, procurement, manufacturing, sales, and service.

02 The Hard and Soft Capabilities of the Supply Chain

The supply chain emerged only after modern information technology had reached a certain stage of development. At its core, the supply chain emphasizes systematic connectivity, comprehensive interoperability, holistic strategic planning, and efficient collaboration. To establish an efficient, collaborative organizational structure centered on the supply chain leader within the supply chain ecosystem, it is necessary to strengthen both the hard and soft capabilities of the supply chain.

1. Smart logistics is the hard power of the supply chain. The supply chain originated in logistics and evolved as an integrated link that unifies the four flows: physical goods, capital, information, and commerce. Within the supply chain system, the physical network connecting these elements is logistics; thus, logistics lies at the heart of the supply chain, serving as the carrier for capital, information, and commercial flows. The logistics network encompasses railways, highways, ports, logistics parks, warehousing facilities, distribution centers, and end‑customers. Smart logistics is an intelligent system that seamlessly integrates the physical logistics network with the digital information network, embodying the hard power of the supply chain. Unitized logistics provides critical support for interconnectivity across supply chain links, underpins efficient collaboration, and stands as a focal point in building the supply chain infrastructure. Unitization standards serve as standardized interfaces for the physical logistics network, akin to the standard data packets that flow through the internet; unitized packaging functions as the standard modular unit within the physical interconnected network. By leveraging internet‑based principles and protocols, we can transform the smart logistics IoT and establish… PI (Physical Internet) is a cutting-edge concept and the forefront of contemporary logistics research worldwide. As the foundational infrastructure of the smart supply chain, PI embodies the hard‑power underpinning a digitally intelligent supply chain.

2. Supply chain management is the supply chain’s soft power. Supply chain management refers to the coordination of internal and external resources across an enterprise’s supply chain, aiming to efficiently meet consumer demand at the lowest possible cost and thereby optimize supply chain operations. Supply chain management constitutes the soft power of the supply chain system, built upon a foundation of hard power. As for how to coordinate supply chain resources: first, one must start with the supply chain’s operational processes ( SCOR is analyzed and systematically organized. As a standard supply chain operations framework, the SCOR model integrates well‑known concepts such as business process reengineering, benchmarking, and process assessment into a cross‑functional structure. It serves as a process reference designed to facilitate effective communication among supply chain partners and provides a standardized language that helps managers focus on key management issues. Today, it is widely recognized in academia as a relatively mature methodology for mapping and streamlining enterprise supply chain processes.

03 Key Pathways for Supply Chain Innovation and Development

1. Standardization: The Foundational Support for Digital and Intelligent Supply Chain Innovation
At the heart of the supply chain lie interconnectivity and efficient collaboration. To achieve seamless connectivity, it is first necessary to standardize the network interfaces between physical logistics networks and virtual digital networks across supply-chain organizations; without such uniformity, interoperability remains elusive. The standards for physical logistics‑network interfaces are grounded in the principle of unitization. In maritime logistics, the container has served as the foundational unit of the physical shipping network, catalyzing a revolution that reshaped the global landscape. However, the true focus of logistics networking lies on land transport, where the pallet functions as the key unit of the physical logistics network. Pallets serve as storage‑location units, cargo‑handling units, handover points, and forklift‑operation units. Thus, the harmonization of pallet standards constitutes the bedrock for enabling interconnectivity within physical logistics networks.

To advance the standardization of supply chains, we should first start with... Standardization of “things” begins, which in turn drives the standardized integration of “flows,” ultimately enabling standardized collaboration across the entire “chain.” Adopting unit‑based and modular thinking to standardize packaging specifications for goods, and treating each physical unit as a unit of measurement, a handover point, and an operational entity—thereby aligning hardware‑based cargo units with data‑driven supply‑chain management units—is the prevailing trend in supply‑chain standardization. In advancing digital and intelligent innovation within the supply chain, standardizing digital identity cards and digital passes for logistics units serves as a key lever. A digital identity card refers to the standardized coding rules used to assign unique identifiers to cargo units. By applying unit‑centric principles to define the fundamental logistics units of the supply chain—and designating them as operational, storage, measurement, and data‑management units—uniform coding standards (such as GS1) are applied to every individual cargo unit. This coding enables the interconnection and integration of physical and information networks, effectively granting each cargo unit a digital identity in the information space.

Within the supply chain ecosystem, the nodes along the upstream–downstream network belong to distinct market‑based enterprises, each with independent ownership and its own private information network. Each must safeguard the cybersecurity of its own system. However, a digitally intelligent supply chain also demands end-to-end digitization and full data interconnectivity, breaking down information silos across organizational boundaries to enable highly efficient, collaborative organizational structures. This, in turn, calls for a digital “passport.”

A digital pass refers to a standardized coding system for the movement of goods within a supply chain. By unifying the rules for assigning digital pass codes, a uniform identifier is issued as soon as a unit of cargo enters the digital‑intelligent supply chain, serving as a “pass” that bridges information silos across disparate organizations. Throughout the entire supply chain—from origin to destination—the same code remains consistent, enabling the platform to extract only cargo‑related, aggregated data from each organization’s information network. This approach avoids the need for full interconnection among all participating entities, safeguarding their information security while breaking down network barriers and ensuring data privacy at every stage. In e‑commerce logistics, smart logistics and supply‑chain innovation have advanced rapidly, largely thanks to the standardization of electronic waybills. Within the broader supply chain, once an e‑commerce seller dispatches a shipment, an electronic waybill is automatically generated according to the established standard, functioning as a digital pass. From the seller, through the e‑commerce platform, warehousing providers, trunk‑line carriers, and last‑mile delivery services, all the way to the consumer, the electronic waybill accompanies the shipment end‑to‑end. Scanning and recording, automated sorting, and real‑time tracking are all enabled by extracting relevant information directly from the electronic waybill, thus achieving end‑to‑end transparency. Importantly, this process does not compromise the information security of sellers, platforms, logistics firms, or courier companies, nor does it expose or share sensitive data beyond what is strictly necessary. In both traditional trade supply chains and manufacturing supply chains, vigorously promoting the standardization of national electronic waybill standards is of paramount importance for driving innovation in supply chain digitalization.

2. Openness and intelligence are the primary directions for innovation in digital‑intelligent supply chains. Closed, siloed intelligent systems run counter to the interconnectedness of digital‑intelligent supply chains. A smart supply chain should be an intelligent system that achieves end‑to‑end network interconnectivity, collective intelligence, flexible scalability, seamless integration of physical and digital realms, and comprehensive data sharing. The emerging paradigm of open intelligence is bound to become the prevailing trend. Open intelligence refers to a system‑wide, open‑architecture intelligent network—one that embraces both internal and external openness. Within a smart supply‑chain logistics system, hardware components must adhere to standardized, open interfaces. For instance, non‑mobile smart devices (modules) should support plug‑and‑play functionality, enabling distributed, on‑demand configuration and assembly; mobile smart devices—such as logistics robots—should be capable of autonomous access, automatic network joining, real‑time flexible scaling, coordinated management and scheduling, and interoperability. As for cross‑system open intelligence, based on actual needs and with appropriate authorization, different intelligent network systems can achieve instant data connectivity, software sharing, and hardware interoperability, while ensuring the security and safeguarding the commercial interests of each independent intelligent network platform.

3. DFL: DFL (Design For Logistics) is the starting point for enhancing the efficiency of a digital and intelligent supply chain. DFL (Design for Logistics) refers to shifting the logistics starting point upstream—beginning at the product design stage. By factoring in logistics‑friendliness throughout manufacturing, sales, warehousing, and delivery, DFL ensures that product dimensions and packaging are optimized for transport, storage, distribution, loading/unloading, handling, stacking, and information capture or data collection. This approach helps reduce end‑to‑end logistics costs and enhances supply chain competitiveness. The supply chain and logistics span the entire journey—from raw material procurement and production to product sales, warehousing, transportation, last‑mile delivery, and ultimately reaching the consumer—encompassing processes such as procurement logistics, shop‑floor logistics, sales logistics, trade logistics, e‑commerce logistics, and express/express‑delivery services. If product designs are unconventional and packaging lacks standardization, not only does digitalization become challenging, but logistical operations—including stacking, handling, consolidation, transport, and delivery—face significant hurdles, leading to reduced efficiency and elevated costs. Therefore, digital‑and‑intelligent supply chain innovation requires the DFL mindset: designing with logistics in mind from the very outset. Key DFL elements include material standardization, component commonality, and product modularity, reflected in aspects such as product dimension and specification design, assembly‑and‑installation planning, and unitized packaging. Specifically, product packaging dimensions should align closely with standardized product modules; product dimensions should conform to standardized packaging formats; and product modules should be coordinated with logistics container‑unit standards. This ensures uniformity and compliance across stacking, storage, and transport packaging, significantly boosting logistics operational efficiency and digitalization levels. By integrating logistics considerations even before production begins—designing for supply‑chain and logistics friendliness—companies can optimize packaging, simplify assembly, facilitate automated handling, enable seamless information extraction, streamline loading and unloading, and promote efficient stacking. Leveraging universal, reusable packaging further enhances logistics performance, laying a solid foundation for improving digital‑and‑intelligent supply chain efficiency right at the source.

4. Flexible supply chains have become the focal point of digital and intelligent supply chain development. In the past, supply chain management placed greater emphasis on supply chain flexibility. However, driven by major geopolitical trends such as the U.S.-China trade war, the Russia-Ukraine conflict, the Taiwan Strait crisis, the COVID‑19 pandemic, and the rise of deglobalization, the priorities of leading supply chain firms have shifted. Today, global companies must strike a balance between cost efficiency and operational effectiveness in building their supply chain systems, while placing heightened importance on supply chain agility and, above all, on supply chain security to enhance resilience. At present, strengthening supply chain resilience and security has become a central focus worldwide. The United States, as early as… In January 2012, the United States released its National Strategy for Global Supply Chain Security, which focuses not only on global transportation networks, postal systems, shipping routes, assets, and infrastructure that ensure the movement of goods from production to the end consumer, but also on communication‑supporting facilities and systems. In June 2021, the White House website published the report “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Promoting Broad-Based Growth,” outlining the findings of an assessment of supply chains for four critical sectors—semiconductors, high‑capacity batteries, critical minerals and materials, and pharmaceuticals—and the measures proposed to address these challenges. Most recently, in July 2022, the U.S. House of Representatives passed the CHIPS and Science Act. China faces a highly challenging supply chain security environment; under pressure from the United States, its supply chains are under severe strain, with many key technologies and products subject to supply bottlenecks. In 2021, the Political Bureau of the CPC Central Committee reviewed the National Security Strategy and other important documents, emphasizing the importance of safeguarding supply chain security.

Although supply chain resilience and security are global priorities, I believe that supply chain flexibility should not be overlooked in this context; indeed, supply chain agility is the cornerstone of digital‑intelligent supply chain development. The four key attributes of a more agile supply chain are: First is robustness—meaning the supply chain is tightly interconnected, making it difficult to disrupt and resistant to relocation. Second is resilience—requiring that, as technology evolves, critical components maintain a degree of redundancy, thereby endowing the supply chain with resilience. Third is risk resistance—implying that, in the face of sudden societal shocks, the supply chain has well‑developed contingency plans and can respond swiftly, thus demonstrating its ability to withstand risks. Fourth is agility—another essential attribute for achieving a flexible, resilient supply chain.

5. The overall strength of a supply chain system lies in supply chain integration. Building a supply chain system is a complex, systematic undertaking. We must focus on digital and intelligent supply chains, prioritize the development of physical infrastructure networks, and leverage digital‑intelligent information networks as a key enabler. Starting with the logistics chain, we will advance supply chain system construction by strengthening infrastructure networks, promoting logistics standardization, fostering information interconnectivity, and advancing green supply chain initiatives—thereby driving innovation in digital and intelligent supply chains. Integrated supply chains represent the systemic integration of digital‑intelligent supply chain ecosystems and serve as a testament to a supply chain’s overall competitiveness.

Supply chain integration requires the convergence of both hardware—logistics networks—and software—supply chain management—with a particular emphasis on system-level integration that bridges the physical and digital realms. By leveraging information technologies, advanced manufacturing techniques, and modern management practices, it seamlessly integrates and optimizes the three key elements of people, technology, and business operations throughout the enterprise’s production and value‑creation processes. Through effective control and coordination of material flows within the supply chain, information flows in management processes, and decision‑making flows in strategic planning, enterprises can achieve integrated management of both internal and external supply chains, thereby attaining globally optimal, dynamic performance. This approach enables organizations to meet the market’s demands for high quality, high flexibility, and low cost in an increasingly competitive environment.

Upon fulfilling the aforementioned requirements, integrated supply chain management is achieved ( ISC). Ren Zhengfei stated, “Once the Integrated Supply Chain (ISC) is in place, virtually all of the company’s management challenges will be resolved.” Huawei invested 4 billion yuan to partner with IBM for a corporate management transformation, with the cornerstone being the development of an integrated supply chain. When the integrated supply chain is successfully established, the supply chain’s agility and resilience are also secured.