Gang Yu: First of all, we know that the JBP business model requires very tight relationship between us and our JBP partners, and it leverages the strength of both. So with such a strong tie, we enjoy much faster selection expansion, our fuller service coverage more effective use of our smart supply chain and less stock shortage. So all these will definitely enhance our customer experience. In addition, with the same selection, semi SKU will be offered by multiple JBP partners through competition, the price will be better for our customers. Regarding operational efficiency, will be improved by two fundamental things. One is that we’ll offer effective data-driven systems to our JV partners. They have a complete visibility and transparency of our supply chain.
Second, we have been continuously improve our forecasting systems, inventory management systems and PIS, price intelligence systems. All these will share the system functionalities with our partners. So regarding the supply chain management improvement, let me just use a few examples, okay? In warehousing, we started a GoPartner project. This project strengthened our supplier partnership for faster, more reliable inbound deliveries. It reached more than 50% reduction in inbound exception rates. We also have a warehouse capacity expansion, we also make more effective use of our existing capacity. So we have much better layouts and improved processes. So we improve our warehouse capacity by 6%, nearly doubled our SKU storage so that this also, in turn, reduced our rental cost.
Also, we have other projects for more efficient picking, packing, et cetera, okay? Let me mention a couple on the logistics part. So we integrated more than 20 delivery providers for more cost-effective timely delivery achieved year-to-date more than RMB7 million cost reduction in delivery. Also, we implemented a digital ordering process and the system. We have more than 400 suppliers participating, increasing our procurement team efficiency. So everyone can, in the procurement team associated came triple their efficiency that means a person demand 3x more SKUs than before. Also we have an inventory management system 2.0 upgrade, improve inventory monitoring, reduce product out-of-stock rate. Right now, our stock rate dropped to 2.6%. It used to be 5% or 6%, okay.
Let me just mention these few examples. Thank you, Kathy.
Operator: The next question comes from Ethan Ling from Iron Harbor Capital.
Ethan Ling: Hello, first of all, congratulations for your company growth. I have a few questions today. The first question is company’s plans for its OEM product in the future?
Gang Yu: The OEMs, all right, Ethan I will take this question. And a couple of OEM or we call it prime label registered in 111, and we have [Indiscernible] for our [chain] store customer [Indiscernible] with [loyal] growing for our individual store customers and also [Indiscernible] dietary supplements. And by Q3 this year, we already launched [Indiscernible] in 43 private label SKUs. And of course, there are much more SKUs already in our pipeline. Most of these products have been well affected by our downstream pharmacy customers. And as you may know, private label product has been a very important and key margin and revenue contributor of those top KA [chain] store. But for our customers, which are basically a small media size chain stores or individual customers, individual stores, they don’t have the luxury and capability to establish their own brand.
And our brand, 111 brand and [Indiscernible] becomes a very attractive solution for them to improve their own margins. I hope I answered your question.
Ethan Ling: And the next question is that I know the company started preparation since last season. What is the current progress of the company’s [privatization]?
Haihui Wang: Yes. Listen, yes, as you know, the company is undergoing the going private process to my knowledge, the process is still ongoing. The special committee consistent of three independent directors are still evaluating the proposal from the buyers group. And for sure, they will make relevant announcements according to SEC rules. As management, we will continue to focus on our business and better serve our customer.
Ethan Ling: And I have another question. How was the cash flow situation in the third quarter for the company, and what’s the current cash position?
Luke Chen: In terms of cash position, as of September end, we had cash and cash equivalents, restricted cash and short-term investments amounting to RMB877 million. So we are also very glad that our operating cash flow and overall cash flow for the quarter has been positive. But we have confidence that we will continue to operate with very high efficiency and as well to generate positive cash flow in the future quarters. Thank you.
Operator: There are no further questions at this time. I’ll hand the call back over to the company for closing remarks.
Junling Liu: Thank you all the investors. So this will conclude our call for Q3.
Luke Chen: Thank you.
Haihui Wang: Thank you.
Operator: In closing, on behalf of the entire 111 management team, we’d like to thank you for your interest and participation in today’s call. If you require any further information or have any interest in visiting 111 in Shanghai, China. Please let the company know. Thank you for joining us on the call today. This concludes the call.
