Zhonghongji: Driving digital transformation in Chinese cuisine with intelligent supply chains
Promoting regional culinary culture through innovation
When Zhonghongji looked to consolidate its fragmented supply chain operations by establishing a centralized supply chain base, it turned to SAP Cloud ERP offerings. With this digital core, Zhonghongji is enabling comprehensive and precise management across its restaurant operations while improving operational efficiency and cost control—strengthening its vision of a company “rooted in one city, committed to every meal.”
| Industry | Region | Company Size |
| Consumer products | Hebei, China | >3,000 employees |
faster month-end closing time.
increase in store-level profit-and-loss reporting for improved accountability.
improvement in financial process automation.
CIO, Hebei Zhonghongji Catering Management Co. Ltd.
Managing the complexity of multiformat supply chains with end-to-end control
Founded in 1993, Hebei Zhonghongji Catering Management Co. Ltd. has grown into a large-scale restaurant management company operating multiple brands and business formats spanning restaurant chains, group catering services, and hotel dining. In recent years, school meal services have become a strategic growth area for the company. Since 2022, Zhonghongji has expanded its reach from serving 30,000 primary school students to now covering more than 50 schools and more than 50,000 students. With food safety as a top priority, every stage of the production process must adhere to the highest hygiene standards. From raw material management and outbound logistics to regulatory compliance, Zhonghongji urgently needed to integrate operations through advanced digital tools—placing exceptionally high demands on its ERP system in terms of security, efficiency, and end-to-end integration.
Zhonghongji’s multiformat business model presents significant challenges to the digitalization of its food processing operations. Each business line has unique requirements for raw material handling and production workflows. From demand submission at individual stores to centralized kitchen processing, the company must manage a wide variety of ingredients—sometimes numbering in the hundreds. Each dish must be deconstructed into multiple components, requiring multilevel structures for bills of materials (BOMs) that further increase the complexity of data management and process optimization. Cost allocation is also a challenge, as it requires precise differentiation between manual labor and machine hours.
To address these issues, Zhonghongji needed to adopt a business-driven approach to streamline and optimize workflows at every stage. Only by enabling smooth integration of data and information flows across the entire process could the company achieve efficient supply chain operations and effective digital management.
Driving lower costs and greater efficiency with intelligent decision-making
Zhonghongji views supply chain development as a core competitive advantage. To support supply chain digital transformation while overcoming challenges, such as disconnected internal workflows, siloed systems, and a lack of smooth data integration, the company selected an SAP Cloud ERP solution as its digital backbone. Centered on its key business lines, Zhonghongji conducted a comprehensive review of its business processes and data flows. It successfully integrated each stage of the supply chain, including demand submission, procurement, warehousing, product development, semiprepared food processing, logistics, and terminal store operations, establishing a closed-loop supply chain system.
SAP Cloud ERP has brought comprehensive efficiency improvements to Zhonghongji. In the past, the movement of each ingredient through different stages relied heavily on manual processes and paper-based documentation for receiving and dispatching. Today, all operations can be completed digitally. Paperless workflows allow staff to focus more on core tasks, such as planning, procurement, and order fulfillment, while automation tools take over a significant portion of routine work. This has greatly reduced processing time and enabled faster, more efficient information sharing across departments.
With SAP Cloud ERP, Zhonghongji has shifted from experience-based decision-making to a data-driven model supported by intelligent analytics. At the store level, where ordering occurs frequently, the system enhances order accuracy by accounting for multiple variables, including upcoming weather conditions and promotional activities. It predicts expected revenue and automatically generates order recommendations tailored to each store. For inventory management, Zhonghongji has incorporated historical purchasing data and supplier information into the system, enabling intelligent forecasting of future procurement trends. This has allowed the company to develop smarter demand and supply plans, calculate restocking schedules with greater precision, optimize inventory turnover, and reduce the risk of overstock.
Using data-driven insights to enhance business value and supply chain resilience
With the implementation of SAP Cloud ERP, Zhonghongji restructured its master data and optimized 48 key business processes, successfully building an integrated, automated, and accurate financial accounting system that smoothly connects business operations with finance. This digital transformation has significantly accelerated processes, such as ordering, receiving, inventory checks, and month-end reconciliation at the store level. This is saving an average of 29 labor hours per store each month and substantially reducing operational costs. Zhonghongji also used SAP Cloud ERP to centralize data from its headquarters, regional branches, and stores into a unified business platform, enabling automated financial consolidation and increasing the company’s financial process automation rate to 98%. As a result, Zhonghongji is now able to support 100 stores with just 24 finance employees and has shortened its month-end closing time from eight days to only three, greatly enhancing financial management efficiency.
In terms of cost management, Zhonghongji has benefited from the standardized processes and best practices provided by SAP Cloud ERP, enabling precise analysis across the supply chain and delivering greater intelligence and visibility. With Chinese localization reporting capabilities in SAP S/4HANA, Zhonghongji can conduct in-depth analysis of key processes, such as procurement monitoring, material movement, ingredient traceability, and contract execution. By leveraging the business intelligence capabilities of SAP Cloud ERP, the company has also increased the frequency of store-level profit-and-loss reporting by four times. This enables real-time tracking of critical operational indicators, such as cost, timeliness, labor efficiency, and net profit, providing accurate data to support better-informed management decisions. Through systematic data analysis, Zhonghongji is better positioned to uncover business value and drive continuous operational optimization, ultimately achieving both cost reduction and efficiency gains.
Strengthening its local market foundation with the supply chain at its core
Guided by its strategy of “rooted in one city, committed to every meal,” Zhonghongji is building a supply chain–driven ecosystem that connects with the everyday meals of people across Shijiazhuang. Looking ahead, the company aims to use SAP Cloud ERP to accelerate business innovation and digital enablement, driving a comprehensive upgrade in both operations and management. With care in every meal, Zhonghongji remains committed to preserving and passing on the rich culinary heritage of Yan-Zhao cuisine.