Dairy Reporter asked Dr Yun about Yili’s innovation strategy and digitalization practice.
What is Yili’s innovation strategy?
Committed to the idea of "no innovation, no future," Yili has been upholding and promoting its innovation strategy, focusing closely on the key R&D fields in the international dairy industry, integrating R&D resources at home and abroad, laying out a global innovation network covering the world's leading R&D institutions from a global perspective, and facilitating innovation cooperation across the whole industrial chain.
Innovation leads to a healthy future, which is not only the direction of the industry, but also the constant practice that Yili has been sticking to. Over the years, following a "consumer-centric" philosophy, Yili has produced its innovation strategy: empowering whole chain innovation via digital transformation, building an innovation system through 'dual integration', and driving product innovation with technological R&D, which have been improving the innovation ecosphere and actively advancing the realization of the "World Integrally Sharing Health (WISH)" dream.
Considering innovation as the core kinetic energy for growth has driven Yili's steady development.
Could you share some examples of Yili’s digital transformation for the entire supply chain – from the farm to packaged milk/dairy products?
As emerging technologies make progress, digital transformation has become an important part of business strategy for enterprises. As an industry leader, Yili has been rapidly practicing its digital transformation strategy and established an independent empowerment department for that matter – the Digitalization Center - to efficiently promote the deep integration of AI with the real economy, deepen the application of AI in the upper, middle and lower reaches of the industrial chain, and enable the high-quality development of the dairy industry.
In the upper sector of the industrial chain, Yili has introduced video surveillance AI recognition systems into its pastures, where technologies like image recognition and joint recognition, together with AI algorithms, are used to analyze if farm staff feeding cows in the production process is compliant in real time. Intelligent and visualized operations also allow Yili to comprehensively enhance the accuracy and breadth of identification across the milk quality management process.
In addition, Yili has also pioneered the application of AI in pastures, for instance, using AI to analyze the health, exercise, diet, and milk production data in the cows' ear tags before drawing up precise and nutritionally-balanced feeding formulations, thus forming a more scientific and efficient farming and management model that ensures every drop of milk is of high quality.
In the middle sector, Yili has actively built "smart factories" to digitalize the supply chain, so the entire operation can be more efficient. In Yili's smart factories, production efficiency is extraordinary, thanks to the seamless coordination among automated production lines, intelligent packing robots, palletizing robots, and wrapping robots. For instance, palletizing robots, which are intelligent and equipped with an auto-sensing, identification system, can concurrently control multiple production lines. In warehouses, Yili adopts an intelligent warehouse management system to automatically identify incoming products and record items, date of production, and warehousing time, thus making warehousing effectively accurate.
In the lower sector, Yili provides an end-to-end big data-based intelligence insight platform, to learn about demand, collect feedback, improve the quality of products and services, and serve customers. To better listen to consumers, Yili has established a big data radar, which captures new consumer needs and trends through Natural Language Processing (NIP), which predicts product flavors and nutritional functions that may be popular in the future, and follows feedback from different people in different regions in real time, thereby helping us optimize product and service quality.
Can you give me an example of how digitalization applies to Yili’s dairy products?
In order to create a truly future-oriented digital organization, Yili has applied digital technologies in all procedures, including breeding, transportation, production, circulation, and consumption, to empower the whole industrial chain and accelerate its progress toward its vision - "Be the most trusted global healthy food provider."
Yili continues to empower innovative products with digital technology, for example, the NOC, a Yili product causing an online sensation. It's an ice cream highly sought after online. An intelligent semantic analysis based on public opinion data indicates that consumers discuss a lot more about the "crust" of ice cream, and the "carrot" flavor is highly rated. In this case, we marketed a "soft crust,” optimized the production and distribution of the carrot flavor, and increased sales. As a result of this new experience, which consumers enjoy, the ice cream won the Best Ice Cream Award at the 2020 World Dairy Innovation Awards.
Where does most of Yili’s R&D take place? Are there any other new products or technologies Yili has developed recently as a result of this R&D?
On the one hand, we're exploring in depth the innovation model converging global intelligence and strengthening global intelligence integration. Yili established and upgraded its European Innovation Center in Holland; built its Innovation Center Oceania, collaborated with Lincoln University in New Zealand; and conducted innovative cooperation locally in Japan, Indonesia, and other regions. Yili can better serve global consumers by pooling global intelligence to build a global wisdom chain and better serve customers all over the world.
On the other hand, we're increasing the construction of global production and processing bases to gather the best global resources. In New Zealand, Southeast Asia, and other regions, Yili has set up overseas production bases, including ODL, Westland, and Chomthana, as well as the Yili Indonesia factory, which is under construction.
Today, Yili's partners are distributed in 33 countries across five continents. Yili is able to pool optimized resources across the globe and can provide higher-quality products and services for global consumers. As of the end of 2020, Yili's total number of global patent applications and total invention applications ranked third among the top 10 dairy companies across the globe.
Driven by technological R&D, Yili is active in making innovative breakthroughs to provide consumers with new experiences. In 2020 alone, Yili launched multiple new products, including Ambrosial cheese bubble yogurt, Satine fresh milk, Changqing Fiber low-temperature yogurt, QQstar kids-formula milk powder, Yili XinHuo Anti-diabetes formula milk powder, Yili drinkable children's cheese, Miaozhi bar for adults, Yiran milk mineral sparkling water, and "Plant Selected" high protein plant-based milk, which contributed to 16% of the sales revenue of new products.
Another example, Jinlingguan Ruihu Milk Powder is a product arising from New Zealand's gold milk source and China's research findings on breast milk. It is produced in the Yili Oceania Production Base. Ruihu Milk Powder is made from high-quality milk sources in New Zealand; technologically, Jinlingguan is a result of 19 years of adherence to Chinese breast milk research, which covers more than 94.1% of China's population, generates millions of breast milk data on more than 1,700 different constituents, develops Chinese patented formulations such as α+β protein combination and nucleotides, and creates the first breast milk database in China. Jinlingguan has been well recognized since it appeared on the market.
