Li & Fung

Victor K. FungGroup Chairman

William K. FungGroup Managing Director

Presented by-Parth Doshi – 11Bhumita Sarabhai- 46Harshil shah – 49Vatsal Shah – 55Hina Soni - 59

Introduction to Li & Fung• 1906-1949Founded by Mr Fung Pak-Liu and Mr Li To-Ming.

Traded products like silk, bamboo, handicrafts and fire works.• 1949-1979

Starting exporting Labour Intensive Consumer Products.• 1979-1985

Opening up in China and industrialization in less developed Asian countries

Heavy investments made during this time.• Since 1995

Evolution of Multinational Group.

Introduction Supply Chain Management

SCM includes all the activities that must take place to get the right product into the right consumer’s hands in the right quantity and at the right time.

Example

• Say we get an order from a European retailer to produce 10,000 garments.

• For this customer we might decide to buy yarn from a Korean producer but have it woven and dyed in Taiwan.

• So we pick the yarn and ship it to Taiwan. The Japanese have the best zippers, so we go to YKK, a big Japanese zipper manufacturer,.

• We order the right zippers from their Chinese plants, the best place to make the garments is Thailand. So we ship everything there.

• The customer needs quick delivery, we may divide the order across five factories in Thailand. Effectively, we are customizing the value chain to best meet the customer’s needs.

• (Interview of Victor Fung of Li & Fung in HBR, Sept-Oct 1998.)

Stage 1

• Regional Sourcing Agent

Stage 2

• Customization

Stage 3

• Dissecting and Rationalizing the Value Chain

Li & Fung Business Evolution

Stage 3

• Intergrated Supply ChainStage4

Li & Fung Integrated SCMSeven Pillars

• Customer Centric and Market Demand driven• Focus on one’s core competency and outsource non-core

activities• Close risk and profit sharing relationship with business

partners• Design, implement, evaluate and improve the several flows• IT to improve efficiency of the SC’s operation• Shorten Production lead time and delivery cycles• Lower costs in sourcing warehousing and transportation

Information Platform for Integrated Solutions

Alignment between Business and IT

Three main BusinessIntranet and Extranet linksTracking systemsCentralised IT systemE-commerceClicks and Mortar pioneer

Global Value Chain

Sources of Li & Fung’s Distinctiveness

Think like a big company act like a small one

Investment in IT

Lower mark down for retailers

High Coordination of the dispersed value chain

Trust

Efficiency and Flexibility

THANK YOU!!