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Li & Fung: Growth For A Supply Chain Specialist: By, Chandra Deepthi (102) Jaya Lakshmi (104) Murali

Li & Fung is a Hong Kong-based supply chain specialist that has been in business for close to 100 years. It transformed from a local trading company to a regional sourcing agent with an extensive global network. Through three phases, it dispersed manufacturing and improved supply chain efficiency. Following seven principles, it focuses on customer centricity, core competencies, risk sharing partnerships, optimized workflow, IT, shortened lead times, and lower costs. It aims to capture more value in the "Soft $3" portion of products' costs.

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743 views12 pages

Li & Fung: Growth For A Supply Chain Specialist: By, Chandra Deepthi (102) Jaya Lakshmi (104) Murali

Li & Fung is a Hong Kong-based supply chain specialist that has been in business for close to 100 years. It transformed from a local trading company to a regional sourcing agent with an extensive global network. Through three phases, it dispersed manufacturing and improved supply chain efficiency. Following seven principles, it focuses on customer centricity, core competencies, risk sharing partnerships, optimized workflow, IT, shortened lead times, and lower costs. It aims to capture more value in the "Soft $3" portion of products' costs.

Uploaded by

deepthisantosh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

LI & FUNG: GROWTH FOR A

SUPPLY CHAIN SPECIALIST

By,
Chandra Deepthi (102)
Jaya Lakshmi (104)
Murali (107)
Backgroun
d
 A specialist in the sourcing of private label
consumer goods, primarily to retailers and brands
 Headquartered in Hong Kong
 Close to 100 years of history
 Traded in both soft goods and hard goods
 A sourcing network of 80 buying offices in 40
countries by 2008
Transformations
 Phase I – Turning Li & Fung from a local trading
company to a regional sourcing agent

 Phase II – Planning the client’s whole production


program

 Phase III – Dispersed manufacturing to improve


the efficiency in each link of the supply chain
Borderless Manufacturing
Assembly
CHINA Lining
TAIWAN
Shell
KOREA
by

Made in Hong Kong

Filler
Label, elastic, CHINA
studs, toggle
and string Zipper
HONG KONG JAPAN
Business Strategy
 Transforming customer experience
 Just-in-time sourcing, manufacturing of
products for customers – customer able to
change orders

 Information Technology a core strength


 Managed logistics of supply chain process
 Centralized back-office systems
 Turn-key systems installed in any warehouse
Business Strategy
 Move up the value chain
 Soft goods: Provided product planning, design services,
development, raw material & factory sourcing
 Made creative suggestions to customers

 “Eating into Soft $3”


 Add value to customer throughout the value chain
 U.S. onshore strategy
 2003-2006 Acquired 7 onshore US businesses
 Acquired 70,000 sq ft space in Manhattan fashion district
 2006 almost US$ 1 B business
The concept of “Soft $3”

Product Wholesale
Sourcing Logistics Information Management
design retail

$1 $4

The cost that is spread throughout the


distribution channels – the “Soft $3”
The 7 Principles of Li & Fung’s Supply Chain
Management ：
(1) Be customer-centric and respond accordingly to the
market demand
(2) Focus on one’s core competency and outsource non-core
activities, and develop a positioning in the supply chain
(3) Develop a close, risk- and profit-sharing relationship with
business partners
(4) Design, implement, evaluate and adjust the work flow,
physical flow, information flow and cash flow in the supply
chain
(5) Adopt information technology to optimize the operation of
the supply chain
(6) Shorten product lead time and delivery cycles
(7) Lower costs in sourcing, warehousing and transportation
Sourcing Trend In 2008
Suggestions:
 Restructure
 Collaboration could be encouraged
 Develop a Vendor Managed Inventory (VMI)
service
 Target small business segment in the US
 Organic Growth
 CPFR

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