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Li & Fung Ashish Chinthal – EPGDBM090105  Praveen Astagi – EPGDBM090115 Praveen Bhandari – EPGDBM090116 Pravin Iyer – EPGDBM090117 Tushar Phalke – EPGDBM090126 Venkat Rajendra – EPGDBM090129 EPGDBM NMIMS University, Bangalore
Agenda Business of Li & Fung Chronology of strategic shifts – drivers of shifts Strategic grid quadrant of Li & Fungs IT investments Strategic alignment model – Extent of alignment – Business, IT, Strategy, Capabilities
Li & Fung Introduction It is the world's leading consumer goods supply chain management company, managing the supply chain for retailers and brands worldwide.  Headquartered in Hong Kong, the Group services its customers globally through a sourcing network of over 80 offices in more than 40 economies. 12,000 International suppliers, 14,000+ staff They are well-practiced at negotiating the system of quotas that govern world textile trade and know how to move orders between countries as quotas filled up. A dedicated Extranet links together all the key components of the supply chain to Provide tracking capabilities  Streamline the flow of business information and  Provide much more in-depth control of supply chain activities.  We deliver a new type of value added, truly global product that has never been seen before. We're pulling apart the value chain and optimising each step - and we're doing it globally."- Victor Fung, Chairman, Li & Fung, in June 2000
Business of Li and Fung Business: ,[object Object]
Value added services across the entire supply-chain.
Sell “Soft” and “Hard” goods.
Soft – apparel including woven and knit garments etc  comprise of 68% of Li Fungs business
Hard – toys , sporting goods , handicrafts, fashion accessories, house-ware, travel goods, festive + seasonal products, furnishings, promotional  merchandise etc comprise of 32% of Li Fungs businessRevenue Model: ,[object Object]
Hard goods attract 10-30% margin
Charged commission on supply of raw materials to its suppliers - managing inventory on the supplier’s behalf,[object Object]
 Loss in 2001: Failure due to Lifung.com
 Steady growth from 2004 onwards
Acquired 2 main rivals in 2007,[object Object]

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Li & Fung case study

  • 1. Li & Fung Ashish Chinthal – EPGDBM090105 Praveen Astagi – EPGDBM090115 Praveen Bhandari – EPGDBM090116 Pravin Iyer – EPGDBM090117 Tushar Phalke – EPGDBM090126 Venkat Rajendra – EPGDBM090129 EPGDBM NMIMS University, Bangalore
  • 2. Agenda Business of Li & Fung Chronology of strategic shifts – drivers of shifts Strategic grid quadrant of Li & Fungs IT investments Strategic alignment model – Extent of alignment – Business, IT, Strategy, Capabilities
  • 3. Li & Fung Introduction It is the world's leading consumer goods supply chain management company, managing the supply chain for retailers and brands worldwide. Headquartered in Hong Kong, the Group services its customers globally through a sourcing network of over 80 offices in more than 40 economies. 12,000 International suppliers, 14,000+ staff They are well-practiced at negotiating the system of quotas that govern world textile trade and know how to move orders between countries as quotas filled up. A dedicated Extranet links together all the key components of the supply chain to Provide tracking capabilities Streamline the flow of business information and Provide much more in-depth control of supply chain activities. We deliver a new type of value added, truly global product that has never been seen before. We're pulling apart the value chain and optimising each step - and we're doing it globally."- Victor Fung, Chairman, Li & Fung, in June 2000
  • 4.
  • 5. Value added services across the entire supply-chain.
  • 6. Sell “Soft” and “Hard” goods.
  • 7. Soft – apparel including woven and knit garments etc comprise of 68% of Li Fungs business
  • 8.
  • 9. Hard goods attract 10-30% margin
  • 10.
  • 11. Loss in 2001: Failure due to Lifung.com
  • 12. Steady growth from 2004 onwards
  • 13.
  • 14.
  • 15. UPS Supply Chain Solutions
  • 16.
  • 18. IT strategy Grid High Impact on Business Operations Low Low High Impact on Strategy
  • 19. Information Platform for Integrated Solutions Consolidation Centers in various origins Drayage in various destinations Li & Fung De-Consolidation Hub at destinations Suppliers in various origins Shipping Drayage in various origins Send production orders Custom Declaration Custom Clearance Consolidate orders Destination DCs Place one order Update Order & shipment status, inventory visibility Management and Buyers receive reports Buyers Accounting receive a single invoice Import Direct & Trigantic Extranets Global Supply Chain Center Transaction platform, product catalogue, suppliers, procedures, self-help manual, query, reports, customer service supply chain analysis, inventory management
  • 20. Alignment between Business & IT Three main business groups - Trading, Retailing, and Distribution. Established company-wide intranet linking critical company operations. Dedicated Extranet links key components of supply chain. Provides tracking capabilities, streamline the flow of information and provide much more granular control of supply chain activities. Believe that IT strategy central to supply chain management success. Leverage the power of the internet as customers demand more customized product choices. In 2002, started up an entire business division focused on B2B sourcing via an internet e-commerce website called lifung.com linking small- to medium-sized businesses with suppliers similar in concept to alibaba.com. L&F leads the world in supplier sourcing as a true “clicks-and-mortar pioneer”.
  • 21. The Changing role of Li & Fung Supply Chain Management Level of Value Added Virtual Manufacturing Borderless Manufacturing Sourcing Buying Agency 1906 Now
  • 22. Alignment between Strategy and Capabilities