Walmart Announces Plan to Invest $1.2 Billion to Upgrade Logistics in China

July 1, 2019

1 Min. Read
Cold Storage Area in Walmart South China Fresh Distribution Center

DONGGUAN, China, July 1, 2019 Ryan McDaniel, Senior Vice President of Walmart China Supply Chain, announced Monday that Walmart will increase its investment in its supply-chain logistics. In addition to building the first customized perishable food distribution center, the South China Fresh Food Distribution Center, the company plans to increase investment in its supply-chain logistics in China by RMB 8 billion, or about $1.2 billion, building or upgrading more than 10 logistics distribution centers over the next 10-20 years. Walmart invested more than RMB 700 million to build the South China Fresh Food Distribution Center, which has been in operation since March 2019. It currently serves more than 100 Walmart stores in Guangdong and Guangxi, with daily distributing capacity of up to 165,000 cases of products. The new fresh food distribution center passed the Brand Reputation through Compliance (BRCGS) Warehousing and Distribution Global Standard Certification, making it the first distribution center in China's retail industry to attain this certification.

Walmart continues to increase investment in supply-chain logistics in order to enable our omni-channel development, continue to provide our Chinese customers with great fresh products, and improve our service. We will invest to build more than 10 in China in the next 10-20 years.
Ryan McDaniel, Senior Vice President of Walmart China Supply Chain

Ryan McDaniel, Senior Vice President of Walmart China Supply Chain, Speaks in China

Ryan McDaniel, Senior Vice President of Walmart China Supply Chain

Cold Chain Benchmarks are Designed and Managed According to International Standards

Walmart South China Fresh Food Distribution Center is Walmart China's first distribution center specially designed and built according to leading international standards. At 33,700 square meters, it is the largest, multi-temperature perishable distribution center in the domestic retail industry that can store and process more than 4,000 kinds of temperature-regulated, refrigerated or frozen goods simultaneously.

The South China Fresh Food Distribution Center is configured with advanced temperature-control hardware. The centralized refrigeration system is based on ammonia refrigeration, combined with other refrigerants in various temperature zones, making it highly efficient and more sustainable. Ammonia refrigeration is safer, more sustainable and about 7 times more efficient than fluorine refrigeration. The cold storage in the reservoir area is designed to control temperature variables in the receiving and delivery area by using a combination of highly sealed doors. A fast-moving insulation door and a rolling door ensure the temperature of the storage area is effectively regulated, protecting the quality of the goods and saving energy. The design of the storage area saves more than 330,000 kilowatt-hours per year.

In the transportation stage of the cold chain, Walmart requires that goods be cooled before they are loaded into temperature-regulated trucks. The pre-cooling temperature is then checked by a “transportation monitoring system” and the container is only loaded once the temperature meets the set level. All shipping vehicles that serve Walmart have devices onboard that monitor the temperature in the vehicle along the delivery route to ensure that the fresh produce is protected and arrives at the store on time.

Innovative Application to Ensure the Quality of Goods

The Walmart supply chain continuously develops and applies innovative technology to optimize its operations to better serve its customers. Walmart's China supply chain enhances data storage and analytics using the internationally advanced, cutting-edge big data platform, Data Lake, and new mobile applications. Applying a digital management platform enables supply chain managers to mobilize and visualize performance management in a more intuitive, convenient manner. In addition, Walmart China's supply chain develops standard operating procedures and employee training programs according to leading international standards, continuously improving operational efficiency through digitalization.

Walmart also allocates special quality inspection personnel at the distribution center to increase compliance and safeguard the quality and safety of food products. A quality testing laboratory has been set up in the distribution center to conduct front-line inspections on issues like food legal and regulatory compliance and agricultural pesticide residues. The data from these tests is shared with all stores nationwide.

Continuous Investment to Upgrade the Supply Chain and Empower Omni-Channel Development

Walmart China's distribution network sets the bar high with its wide distribution range, strong processing capacity and quick service. In 2018, Walmart China's dry warehouses and fresh food distribution centers dispatched more than 300,000 vehicles to its stores, resulting in an annual distribution mileage of more than 80 million kilometers and daily delivery of more than 1 million boxes of goods.

Opening the South China Fresh Food Distribution Center increased the cold chain storage area serving Guangdong and Guangxi to meet the ever-growing customer demand for fresh goods. Other innovations include a scattered-sorting solution that provides the flexible distribution needed by community stores, and streamlining processes to reduce inventory during trial operations, saving about 50 percent of space and improving efficiency by nearly 300%.

Walmart South China Fresh Distribution Center

Walmart South China Fresh Distribution Center

About Walmart China
Walmart entered the Chinese market in 1996 and opened its first store in Shenzhen. The Walmart Global Procurement Office was established in Shenzhen in 2002. Walmart currently operates a variety of formats in China, including shopping malls, Sam's Club stores, and Huisafe supermarkets. Since entering China, Walmart has donated RMB 150 million to China's charitable causes. He has won several awards, including “Best Employer”, “Supplier Comprehensive Satisfaction Retail Enterprise”, “Most Popular Private Label Retailer Award”. It has been ranked as one of Fortune’s Global Top 500 and ranked first in the retail enterprises category on Forbes 2018 Global 2000 World’s Largest Public Companies list. For more information about Walmart, please visit the company's website at http://www.wal-martchina.com/.

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