Pranol Prakash Priyank Dabral Siddharth Upadhyay

Li & Fung Limited

COMPANY Introduction Li & Fung Limited is a Hong Kong-headquartered multinational group and
recognized as the world leader in consumer goods design, development, sourcing and distribution. The Company specializes in supply chain management of highvolume, time-sensitive goods for leading retailers and brands worldwide via an extensive global network. As a supply chain manager across many producers and countries, Li & Fung provides product design and development, raw material and factory sourcing, production planning and management, quality assurance and export documentation to shipping consolidation Li & Fung Limited provides sophisticated, one-stop-shop supply chain solutions to meet customers' specific needs. From product design, raw material sourcing and production management to quality control, logistics, shipping and other important functions, its spectrum of services covers the entire supply chain end-to-end. Li & Fung Limited is the worlds 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 o Provide tracking capabilities o Streamline the flow of business information and o 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. Were pulling apart the value chain and optimising each step - and were doing it globally - Victor Fung, Chairman, Li & Fung, in June 2000

Nature of Product:
Functional Product Household goods Innovative Product Health and beauty Products, toys, furnishings.

Global Network :
Li & Fung Limited operates one of the world's most extensive global networks. About 27,000 staff members work across about 240 offices and distribution centers in over 40 economies. Our footprint gives us access to a sourcing network encompassing over 15,000 suppliers around the world.

Business Overview:
global supply chain manager, Li & Fung is committed to achieving the highest standards of service and meeting the needs of international businesses through competitive pricing, quality, and reliable delivery. By leveraging its global networks, market knowledge, and advanced technology and information systems, Li & Fung has the capacity and flexibility to respond rapidly to evolving consumer trends. The Company's services cover the entire supply chain through three distinct yet interconnected business networks: trading, logistics and distribution.

TRADING:
Experience, professionalism and integrity have earned Li & Fung its reputation as the world's leading consumer goods sourcing company. Through a growing network of over 15,000 suppliers in more than 40 economies, the Company strives to find quality-conscious, cost-effective manufacturers to match the production needs of more than 2,000 customers around the world.

LOGISTICS:
Li & Fung operates an extensive logistics network around the world. The Company offers a comprehensive menu of logistics solutions, from warehousing, transport, repacking, customs brokerage, freight forwarding, hubbing and consolidation, and other value added services, including supply chain analytics and value engineering work.

DISTRIBUTION:
Li & Fung first began its distribution business in the U.S. in 2005 and then expanded to Europe in 2008. By working closely with brands and retailers, Li & Fung addresses their specific needs in the areas of design, sales and marketing, and distribution as well as managing the supply chain.

Global Supply chain:

Li & Fung was one of Hong Kong's most famous and successful trading companies, dealing in various types of consumer goods (like textiles, toys, sporting equipment and household items). Founded about 90 years back, by the end of 2003, the Group had a total work force of 5,956, of which 2,055 were based in the Hong Kong headquarters and 3,901 were located overseas throughout the Groups sourcing network across 38 countries and territories. The Harvard educated Fung brothers, Victor and William had been the architects of the company's success. The brothers believed that even in the age of the Internet, trading intermediaries had an important role to play. They felt that the role of a trader went beyond matching the needs of the buyers and sellers to add value in innovative ways. But as 2003 drew to a close, Li & Fung also realised that it would have to keep innovating to stay ahead of other players in a business where sustainable competitive advantage was increasingly hard to come by.

Li & Fung Supply Chain based on Flexible Can be modified to suite new requirements Agile Can source and export from 4 continents across the globe Cost-effective Believes and deals in economies of scale Responsive Is fast to react to change

They believe that by collaborating with and supporting our customers' sustainability programs, we help consumers worldwide make responsible choices and lead more sustainable lives. At the same time, we also seek to engage with our suppliers and customers to enhance our collective knowledge and capabilities around sustainable sourcing and sustainable products. At a basic level, our Supplier Code of Conduct provides a clear statement of labor and environmental commitments for our approved suppliers. The Code is based on local and national laws and regulations as well as the International Labor Organization's core conventions. These include underage labor, involuntary labor, compensation, working hours, discrimination, disciplinary practices, freedom of association, health and safety, environmental practices and the right of access.

Maintaining relationship:
7pillars of Li Fungs supply chain which make them retain there relationship are; 1. 2. 3. 4. Being customer-centric and market demand driven Focus on ones core competency and outsource non-core activities Develop a close, risk- and profit-sharing relationship with business partners; Design, implement, evaluate and continuously improve 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 production lead time and delivery cycles; and 7. Lower costs in sourcing, warehousing and transportation. To ensure product safety, quality and regulatory compliance, we have put in place rigorous internal processes backed by a team of 2,600 global Quality Assurance /

Quality Control colleagues. Our internal compliance efforts are additionally backed by regular internal and external testing and certification to ensure that products conform to the required standards.

Relations with suppliers:

Li & Fung tries to foster a long term win-win relation with the factories it works with. It follows the 30:30 rule . They guarantee that they will take at least 30% of the production but never more than 70% . This is unique because they do not want the factory to be over dependent on them and works with other clients too.. Thus it tries to maintain a very organic and strong yet not overwhelming relation with its suppliers.

Conclusion:
Li & Fung had laid great emphasis on traditional values, notwithstanding their efforts to modernise the company's operations. They had tried to foster a well knit family like culture, where titles and hierarchy were less important. To have a personal understanding of customer requirements, the brothers continued to read many if not all fax messages from customers.

Victor Fung felt that it was ultimately strong personal relationships, especially with suppliers, which gave Li & Fung a sustainable competitive advantage1:

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