PSC LIVE London Global Summit – Yum China’s Howard Huang

At Procurement & Supply Chain LIVE London Global Summit, Howard Huang, Chief Supply Chain Officer at Yum China, delivered an insightful presentation on the strategies behind Yum China’s resilient supply chain network, which supports over 15,000 outlets across the country. 

Howard highlighted how the company’s advanced logistics, digital procurement processes and commitment to food safety ensure consistent service across China’s vast geography – even when the company is faced with unforeseen disruptions.

A powerful supply chain for vast operations

Howard begins with an overview of Yum China, which includes the major brands it operates like KFC, Pizza Hut, Taco Bell and the Lavazza coffee chain. The company generated over US$11bn in annual revenue last year with more than two billion customer visits each year. 

The company’s supply chain, spanning from the eastern coast to the remote Tibetan Plateau, is a cornerstone in Yum China’s success. 

Howard noted that, with over 15,000 stores nationwide and ambitions to expand to 20,000 by 2026, Yum China requires a highly-coordinated, tech-driven logistics network to maintain service quality and address frequent challenges.

A significant element of this network includes Yum China’s proprietary logistics system, with 35 centres equipped for varied temperature requirements, supported by over 40,000 vehicles, most of which are refrigerated trucks featuring IoT sensors for real-time monitoring. 

“Our logistics system enables us to open restaurants even in remote regions where other brands cannot reach,” Howard said, highlighting Yum China’s competitive advantage in service reach and supply chain reliability. 

This self-reliant system, he explained, offers critical flexibility during weather disruptions, route blockages and infrastructure limitations.

Digital tools for food safety and procurement

Food safety and quality remain top priorities for Yum China. Howard described the company’s data-centric approach to ensuring rigorous standards. 

“Food safety is embedded in our values,” he asserted, showcasing Yum China’s use of AI to monitor and analyse global risk factors. 

Using AI-generated data from government reports, media and internal audits, Yum China can detect potential supply chain risks, such as disease outbreaks, within minutes. 

This level of foresight enables the company to take proactive measures to prevent disruptions, protecting both customers and operations.

Procurement is another core area where Yum China’s digital innovation stands out. With 20,000 SKUs managed across close to 1,000 vendors, Yum China has developed a supplier recruitment platform that simplifies vendor selection. 

Since launching, the platform has received applications from suppliers, covering more than a third of Yum China’s supply needs, allowing for a more efficient, scalable supplier selection process. 

“This system shifts us from a one-way manual selection to a two-way digital interaction,” Howard explained, adding that this digital transformation helps manage relationships with vendors in a competitive environment where sourcing consistency is crucial.

Innovation in food production and logistics

Howard shares Yum China’s strategic sourcing approach, particularly in the poultry sector, where the company has made impactful contributions to China’s agricultural industry. 

“Roughly one-quarter of China’s poultry output goes to Yum China,” Howard continued. With this level of influence, Yum China has been instrumental in advancing poultry production standards across the country. 

The company partnered with local suppliers to introduce white feather chickens, which have a shorter production cycle, resulting in lower costs and higher-quality supply for the entire industry.

In addition to food sourcing, Yum China prioritises the efficient use of ingredients across its brands. For example, beef products are leveraged across multiple menu items, from steaks and pizzas to local dishes, to maximise utilisation and reduce waste. 

This approach requires a versatile supply chain that can handle both Western and Chinese cuisines, a challenge Howard's team manages by continuously refining processes for efficiency and innovation. 

“We launched over 500 new or upgraded products last year alone,” he shared, showcasing the supply chain’s role in supporting Yum China’s diverse menu offerings.

Embracing automation for resilience

Howard highlights automation as a critical factor in Yum China’s resilient supply chain.

The organisation's network of logistics centres employs technologies like automated sorting and storage, handling robots and AI-driven picking systems. 

Yum China's Xi'an Logistics Center realised fully-automated operations in 2023, boosting storage capacity by 55% and efficiency by 70%, which has helped ensure a smooth supply chain as the company scales. 

Howard further described Yum China’s use of advanced route-planning technology powered by mixed-integer programming to optimise logistics. This tool recalculates routes instantly, allowing Yum China to respond quickly to disruptions, such as road closures or extreme weather. 

By incorporating automation and AI across the supply chain, Yum China can maintain reliable operations and ensure continuous stock availability across its vast store network. 

“Our system analyses over three million shipping route options,” Howard stated, demonstrating how a technology-driven approach keeps the company agile and adaptable in China’s complex logistical landscape.

Scaling up with sustainability and third-party logistics

As Yum China continues its expansion, sustainability and environmental responsibility are becoming essential to its operations.

Howard explained that the company’s supplier relationships emphasise compliance with high standards in ESG areas, a practice that resonates with Yum China’s goal of industry leadership in responsible supply chain management.

In addition to serving its own stores, Yum China has begun offering third-party logistics (3PL) services. It generated approximately US$43m in revenue last year by assisting other companies with their logistics needs. 

“Our advanced logistics network is capable of supporting not only our stores but also other businesses,” Howard said. He suggested that 3PL could become a growing revenue stream as Yum China continues to develop its supply chain infrastructure.

Howard concluded by emphasising the importance of resilient supply chains in supporting Yum China’s growth strategy, especially as the company aims to open thousands of new locations across China. 

He expressed hope that Yum China’s efforts to build an agile, data-driven and sustainable supply chain would serve as a model for other organisations navigating complex, large-scale operations in dynamic markets like China. 

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