Ref: IMD-7-2350

Case study

Reference: IMD-7-2350

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Youhualin: Digitizing the supply chain in China

Youhualin, a Chinese technology company driven by operations research, artificial intelligence and big data technology, provides intelligent decision-making solutions to help companies optimize operational issues that have been persistent pain points. In 2013, China Eastern Airlines was looking for a solution to one of the industry’s toughest problems – pilot scheduling optimization. Xiao Fangfang, a PhD student at Georgia Institute of Technology, took up the challenge. Working under the supervision of Ellis Johnson, dubbed “the father of global aviation optimization,” she made great strides. The project went well and, seeing the potential market opportunity, Ms. Xiao returned to China in 2016 and established Youhualin. Youhualin’s algorithms enabled it to handle highly complicated scenarios that other companies could not. Youhualin grew quickly, expanding from the airline industry to other forms of public transport, logistics and manufacturing. Since it was founded in 2016, Youhualin’s revenues have more than doubled each year, a trend that shows no sign of slowing. Youhualin was one of the start-ups in China that was able to seize an emerging opportunity thanks to its innovative technological capabilities. Together with other Chinese high-tech firms, it could rightly be termed a “tech underdog.”

Learning Objective

• Non-Chinese multinational corporations (MNCs) should keep an eye on Chinese tech underdogs, and build channels to identify which local firms pose a threat.
• To compete against these underdogs, MNCs need to be aware of changing customer needs and invest in new technologies.
• They should also leverage what they do well and develop strong countermeasures.
• Above all, they should learn from Chinese innovators and rethink long-held assumptions about how to innovate successfully in China and abroad.

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Reference: IMD-7-2350

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