JD Logistics and JD Retail Undergo Adjustments to Enhance Decision-making Power of Provincial Leaders
JD.com‘s logistics arm is undergoing a new round of organizational adjustments by establishing four independent business units for supply chain, express delivery, fast delivery, and international business, LatePost reported on April 12. Previously, sales, products, and operations had their own separate departments in addition to these four businesses. However, after the adjustment process is complete, these departments will be merged into the four major business units.
JD Logistics has abandoned its previous regional organizational model, which consisted of seven major regions. Instead, each province will function as an independent operating unit with provincial leaders having increased autonomy in decision-making regarding operations, management, personnel appointments and other matters. These leaders will report directly to the business department heads at headquarters.
Before, JD Logistics had more than 1500 warehouses and employed over 390,000 people in seven regional branches throughout China. Of those employees, over 370,000 were frontline workers. Their primary services include large-item express delivery and small parcel courier services for individual consumers as well as integrated solutions for enterprises such as commercial consulting, inventory optimization, network planning, warehouse management, transportation and goods returns.
In 2020, JD Logistics has already undergone a significant organizational restructuring. Following its public listing in 2021, Richard Liu, the founder of JD.com, was asked about the company’s biggest future challenge during a management conference held two weeks before the listing ceremony. Liu identified two key challenges: implementing big boss management mode and keeping up with technology development to avoid being left behind.
In early 2019, JD.com implemented the big boss management model proposed by Liu. The aim of this model is to decentralize power and enable frontline teams to make independent decisions, thereby fully unleashing organizational vitality. This mechanism was first piloted by JD Logistics in 2018.
Previously, the leaders of each province were unable to determine recruitment strategies or establish targets for their subordinate business lines. These decisions now fall under the jurisdiction of provincial leaders, resulting in improved management efficiency and flexibility at the provincial level. According to a JD.com insider, this organizational adjustment aims to further implement the group’s big boss mechanism.
This week, JD Retail underwent an organizational restructuring. Many business groups were eliminated and their former heads will now lead business units. Furthermore, managers have been granted more decision-making autonomy, including the ability to appoint and remove personnel in order to boost employee motivation.
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Last year, Liu made several changes in JD.com. He personally oversaw the restructuring of the retail and logistics business to delegate decision-making power to teams that are closest to customers and understand market demand better. The objective was to enhance management efficiency and stimulate organizational vitality. This reorganization will not result in any layoffs.