SHANGHAI, China – Yum China Holdings, Inc. today announced that the Company has commenced the construction of the Yum China Supply Chain Management Center in Shanghai’s Jiading district. The 61,000 square meter facility is Yum China’s largest greenfield supply chain center project to date. The site is scheduled for completion in 2024 and will serve as the headquarters of the Company’s supply chain operations.
“Our world-class supply chain is one of our key business enablers, and helped us mitigate the disruption impact of COVID-19. As part of our RGM strategic framework, we will continue to widen our strategic moat by investing in supply chain infrastructure to further enhance the agility and resiliency of our business,” said Joey Wat, CEO of Yum China. “As our supply chain capabilities continue to go from strength to strength, we believe it will better support more stores, channels and products, while helping to drive long-term growth.”
In addition to supporting Yum China’s restaurants in eastern China, the new facility will serve as a key integrated cold chain transit hub for the region and support the Company’s operations across the country. It will include ambient temperature storage, cold-chain storage, office space and supporting facilities. The Company will adopt modern automation solutions, three-dimensional storage technology to optimize the use of the storage space, and leverage the latest digital technologies to build a smart supply chain management platform. The Company will also deploy rooftop solar panels and wind power generation equipment to reduce carbon emissions.
Since entering China 35 years ago, Yum China has continuously invested in building a world-class supply chain management system, covering supplier and upstream management, logistics and distribution management, and restaurant management. By the end of March 2022, Yum China had 32 logistics centers serving over 12,000 restaurants covering more than 1,700 cities nationwide. The Company also announced during its 2021 Investor Day that it intended to expand its logistics network to 45 to 50 logistics centers over the next five years.
In recent years, Yum China has embarked on a journey to establish an intelligent supply chain that helps ensure food safety and quality management throughout the value chain. The Company has also developed transportation management system (TMS) to optimize route planning and vehicle loading rates. The warehouse management system (WMS) is also in place to enable product e-tracking from suppliers to logistics centers and to restaurants. Utilizing IoT and AI, Yum China’s logistic centers provide real-time monitoring of products and the ambient temperature in in-transit vehicles across the country.
Yum China also utilizes the extra capacity of its logistics facilities to provide one-stop customized solutions to third parties. To do this, in 2020, the Company established Chuan Sheng Supply Chain, an entity that focuses on providing high-quality professional cold chain logistics, trunk transportation, urban distribution and related value-added services.