Li Fung Pdf Reference

Topics: Supply chain management, Supply chain, Management Pages: 25 (1710 words) Published: December 19, 2014
Ecosystem Aware
INTEGRATED
SUPPLYChain
CHAIN Management
NETWORKS
Global Supply

Li & Fung Ltd.
N. Viswanadham
n.viswanadham@gmail.com
Source: Harvard Cases, Book
by Jerry Wind et.al

Ecosystem Aware
Global Supply Chain Management

Contents
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Li & Fung
Competencies of Li & Fung
The Service Chain Process @ Li & Fung
Price Target
Ecosystem Model
–  Resources
–  Service Delivery Mechanisms
–  Institutions

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Performance
Governance
Conclusions

N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Li & Fung

N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Li & Fung
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B2B trading service provider
Who are its customers?
–  Large retailers and manufacturers of labor-intensive, low-cost

consumer goods. Majority of them hail from the US and Europe –  Small retailers and manufacturers who lack the volume l 

Competitors
–  Customers' staff could perform the same functions as Li & Fung

in searching out, inspecting, analyzing, and selecting factories for each order, and then making inspection visits to track the supplier's progress on the order.
–  B2B companies need to prove that they can do better than the customer’s employees. Thus competition comes from
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Large companies with international supplier networks like Li & Fung Small outfits that have a good knowledge of suppliers in a small region or small product area
Large customers who have the capital to invest and operate their own buying offices

Threats: Disintermediation via New technologies
N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Li & Fung Business Model
l  Li

& Fung makes no products of its own. Rather, it
“orchestrates” the production of goods by others.
–  It draws on a vast global network of highly focused providers

to arrange for private-label manufacturing, primarily on behalf of US and European clothiers.
l  For

a specific product or client, Li & Fung assembles a
customized set of specialized providers to handle
everything from product development to the sourcing of
raw materials, production planning and management,
and, eventually, shipping.
l  If glitches pop up at any stage of the intricate process along the network, the company can quickly shift an
activity from one provider to another

N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Borderless Manufacturing
Assembly
CHINA

Lining
TAIWAN

Shell
KOREA

Made in Hong Kong
Filler
CHINA

Label, elastic,
studs, toggle
and string
HONG KONG

Zipper
JAPAN

N.Viswanadham

William Fung: “Chasing low-cost labor around Asia."
Ecosystem Aware
Global Supply Chain Management

Imperative driving Li & Fung's continual international expansion

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Arbitrage Network companies expand into new
countries either to tap new, lower cost labor
markets or to reach new customers.
–  Simultaneous growth on both sides may strain

administrative resources

Li & Fung's international growth is entirely of the
former sort: it opens new branch offices and
develops suppliers in new countries.
l  Software services company like HCL America
have a single source country and expand by
opening selling offices in new countries.
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N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Li & Fung Manufacturing Network

Li & Fung has ties with more than 8,000 factories
l  Managing 3,000 factories, each with around 500
workers, would make one responsible for
managing over Four million workers!”
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N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Competencies of Li & Fung

N.Viswanadham

Ecosystem Aware
Global Supply Chain Management

Financial Human & Social Capital
l  A

Company has three kinds of capital:

1.  Financial capital which is cash on hand,

reserves in the bank; assets.etc
2.  Human capital: Employees with...
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