...TASK: In the light of this brief company overview please answer the following four questions in connection to the industry in which Li Fung operates with particular focus on Supply Network Management aspects required for the manufacturing, distributing and selling of its products (equal number of words per section, 3000 words in total). Please research Li Fung in relation to all the tasks below. Question 1 (20 marks) Critically evaluate ALL aspects you think are relevant in relation to warehouse space and layout planning. You MUST provide various examples from the academic literature to underpin your arguments. Question 2 (20 marks) Critically evaluate ALL aspects you think are relevant in relation to warehouse operations management. Consider the appropriateness of mechanization and full automation. You MUST provide various practical examples from the academic literature to underpin your arguments. Question 3 (20 marks) Use Li Fung (see assignment brief above) as a case study for a critical review of how information technology in the Supply Network can help the Logistics and Operations Manager achieve their objectives. Question 4 (20 marks) What do you understand by the term modern methods of inventory management? Consider these terms with reference to the above Case Organization (Li and Fung) and then critically evaluate these terms with more traditional models such as re-order point and EOQ. A connection to the answers is NOT required. Outcomes...
Words: 597 - Pages: 3
...Group Structure EXPORT SOURCING The Group’s export trading arm is Li & Fung Limited – one of the largest global supply chain management companies that manages the supply chain of high-volume, time-sensitive consumer goods through its office network in more than 40 economics DISTRIBUTION The Group’s distribution businesses are housed under the integrated Distribution Services Group which provides its customers with a menu of integrated Distribution Services in three core businesses across Asia: Manufacturing, Logistics and Distribution RETAILING The Group’s retailing businesses include the publicly listed Convenience Retail Asia Ltd, the Trinity Group and privately held Toys “R” Us, with store networks extending from the China markets to Singapore, Malaysia, Thailand, Indonesia, south Korea and the Philippines Li Fung Business Trading * 100 years of trading history since 1906 * Export trading arm handles the supply chain of high volume, time-sensitive consumer goods through its worldwide office network * Around 14,000 staff * Orchestrates nearly 15,000 international suppliers in over 40 economies to service approximately 2,000 customers * Member of Hang Seng Index, MSCI Index and FTSE4Good Index * 2009 Revenue: US$13.4 billion Li & Fung specializes in orchestrating a highly-customized path through the supply chain in order to deliver high-quality, low-cost products to its customers reliably and quickly. Over 80 offices in over...
Words: 565 - Pages: 3
...of the firm. Family firms can be sole ownerships, partnerships, or limited companies, where family members are shareholders. The process of strategic management is of great importance to both family firms and non-family firms. However, the goals set by family firms differ from those set by non-family firms. Also, the rate at which the goals of each change differs greatly, with the goals of family firms being more susceptible to change in the short future. While families only have an indirect impact on non-family firms, where management operates in a way that serves the best interests of shareholders, they have a great influence over a family firm, where the family’s best interest is what management targets, which has been the case with Li & Fung, especially during its early stages. According to Sharma (1997), an important characteristic of family firms is that they consist of two sub-systems: family and business.(Harris, Martinez, & Ward, 1994) Periods involving any forms of strategic restructuring are significant to any business. Whether undergoing management restructuring or having to restructure its corporate strategy to sustain its competitive edge in the market, it is important for a firm develop a strategy allowing it to transition as smoothly as possible while maintaining its current position in the market; highly increasing the chance for a firm to continue growing after the completion of the restructuring process. The future success of any firm in a transition period...
Words: 1134 - Pages: 5
...Li & Fung Limited Press Conference August 12, 2010 Interim Results 2010 Interim Results Highlights • Record high growth of core operating profit over a half-year period • Record high margins due to strong onshore businesses and increasing involvement in value-added services • Delivered strong operating leverage with continued cost savings • Turnover modestly improved, reflecting the effects of early stage of the economic recovery together with contributions from previous acquisitions and outsourcing deals announced acquisition of 7 companies, and signed 4 licensing deals so far this year • Entered into a landmark sourcing deal with Wal-Mart Stores, Inc., 2010 Interim Results Highlights (HK$m) Turnover (US$m*) Total Margin % of sales Core Operating Profit % of sales Profit Attributable to Shareholders % of sales 1H 2009 46,292 5,935 5,395 11.7% 1,697 3.7% 1,397 3.0% 1H 2010 51,792 6,640 6,998 13.5% 2,635 5.1% 2,171 4.2% *USD1 = HKD7.8 Change 12% 30% 55% 55% 2010 Interim Results Per Share Data (HK Cents) 1H 2009 1H 2010 Change EPS 38.3¢ 57.5¢ 50% Interim Dividend 26.0¢ 38.0¢ 46% 2010 Interim Results Analysis--Net Profit (HK$m) In HK$m Core Operating Profit % of sales Amortization of intangible assets from acquisitions Notional Interest Net Interest (excluding notional interest) Associates Tax Minority Interest Profit attributable to shareholders % of sales Actuals 1H 2009 1H 2010 1,697 2,635 3.7% 5.1% (48) (49) (127)...
Words: 1298 - Pages: 6
...Li & Fung Report Introduction Have you ever wondered how retail stores like Wal-Mart keep their shelves stocked with goods? “A global provider of supply chain management services, Li & Fung helps retailers, including Wal-Mart and Target, keep their shelves filled with consumer goods from far-flung factories. Li & Fung’s 240 offices and distribution centers source from more than 15,000 suppliers and serve 40 countries with a concentration in China” (Li & Fung Limited). With over 15,000 suppliers and 40 countries to serve, Li & Fung is one of the largest supply chain management services that provide service to retailers like Wal-Mart and Target. As stated on the Hoovers Company Profile, Li & Fung is a publicly traded company whose sales in 2012 amounted to $20, 211, 800, 000 and net income in 2012 was $622.6 million. About 65% of sales in 2010 were from the United States. In 2013, Li & Fung had a total of 28,210 employees. “The company quietly has become one of the world's largest producers of consumer goods -- including Cannon sheets, Tommy Hilfiger polo shirts, Restoration Hardware bathroom faucets, L'Oreal cosmetics and Hello Kitty stuffed animals -- all without owning a single factory or fabric mill” (Kapner). Brief History In 1906, Pak-liu Fung and To-ming Li convened at the treaty port of Guangzhou and founded the company Li & Fung. During the first few years, Li & Fung mostly traded in porcelain and silk and exported jade, ivory, handicrafts, and fireworks. Li...
Words: 2121 - Pages: 9
...Li & Fung is a global trading company that supplies high-volume consumer goods including apparel, fashion accessories, home products, handicrafts, promotional merchandise, gift items, toys, sporting goods and travel goods. A path that company has been gone through shows a several critical points that influenced and affected the sustainable development of the company. Specifically, we would like to pay an attention on company’s corporate culture, a transformation and adoption of information technology as a core strength and rivals acquisition strategy. After analyzing the case, a several key questions are derived to show the main issues and implications for the case. 1. Does the three-year plan strategy work efficiently for the current business environment? For that, do the owners need to reconsider the corporate culture and philosophy of Li & Fung Company to be more suitable for the rapidly changing pace of business environment? 2. What kind of challenges had the company faced before adopting the E-Commerce? Is there an alternative way for “Bubble in strategy”? What is the role of information technology in current company’s business profile? 3. Does the expansion strategy lead Li & Fung to the future success? How the acquisition may affect on company? 1. We believe that the core of the any big corporation is a corporate culture and the way leaders are sharing the vision and goals. The Fung brothers had laid great emphasis on traditional...
Words: 931 - Pages: 4
...LI & FUNG: GROWTH FOR A SUPPLY CHAIN SPECIALIST Question 1: In light of the American recession, what can Li & Fung do to continue expanding its business and reach its targets of US$ 20 billion for the period 2008 – 2010? In order for Li & Fung to safeguard the growth of its business and achieve its target turnover of US$20 billion between 2008 and 2010, it needs to refocus its strategic vision in three areas: 1. Target high‐end customers to increase margins 2. Implement processes to better handle variability 3. Apply cost saving strategies to increase turnover and profit In targeting high‐end customers, Li & Fung will be able to increase their margins and therefore lower their volume. By capitalizing on their already extensive network of suppliers, Li & Fung already has an advantage of attracting this new consumer segment. By implementing processes to better handle variability, Li & Fung will have a better handle on forecasting and economic conditions. The use of an ERP system, although extremely expensive, will improve Li & Fung’s ability to look at all the different aspects of the company and how they are affecting each other. By considering variability in their business strategy, Li & Fung will also be able protect itself from liability concerns should their customers not be able to pay their manufacturers. More stringent credit analysis should be performed before issuing letters of credit. Lastly, by implementing cost saving strategies...
Words: 331 - Pages: 2
...Li & Fung 2006 1. What are the major competitive advantages/disadvantages of Li & Fung in 2006? Supply chain management is the core business of ‘Li & Fung’. Trading, logistics and distribution are the three main special essentials of ‘Li & Fung’s business. Supply chain excellence has become a key driver of competitiveness in most industries globally. A supply chain encompasses all activities from obtaining raw materials through to the delivery of final goods or services to the end-consumer. These include material sourcing and handling, product design, production planning, order processing, inventory management, transportation, warehousing and customer service. It also includes the management of information flow that facilitates communication among all these functions. For a company to be competitive, its supply chain must be flexible, agile, cost-effective and responsive. Nowadays it is more common for companies to collaborate in a global context where each of them focuses on its core competency and outsource the rest. As a consequence their successes becomes increasingly dependent on how well they can orchestrate the different aspects and manage the external parties involved along the supply chain. Equally important are companies' abilities to satisfy their customers' needs, shorten production lead time and lower cost. ‘Li & Fung’ has evolved from a sourcing agent to a global supply chain manager by being an innovator in the development of supply chain...
Words: 1329 - Pages: 6
...Li & Fung : Strategic Role of E-Commerce 2006/9/13 ECT 7010 Fundamental of ECommerce Technologies 1 Defensive posture of Li & Fung to the Internet at the beginning “Would the Internet disintermediate us? Would we get Amazoned by someone who will put together all of the information about buyers and factories online?” Answer: The Internet facilitates supply chain management and Li & Fung were not going to be disintermediated Key: have the old economy know-how and yet be open to new economy ideas 2 2006/9/13 ECT 7010 Fundamental of E-Commerce Technologies Internet Issues August 2000, beta launch of the new Businessto-business(B2B) e-commerce portal Important issues: Was there any chance of channel conflict or cannibalization between the offline business and the start-up? How would the market reach to the start-up once it was launched the following year? How specifically would e-commerce ultimately transform his family’s century-old company? 2006/9/13 ECT 7010 Fundamental of E-Commerce Technologies 3 Company Background 2000 – Li & Fung a $2 billion global export trading company 3,600 staff worldwide Sourcing and managing the global supply chain for high-volume, time-sensitive consumer goods Product mix – hard and soft goods Soft goods – apparel, including woven and knit garments Hard goods – fashion accessories, festive or holiday products, furnishings, giftware, handicrafts, home products, furnishing, home products, fireworks, sporting goods, toys...
Words: 2314 - Pages: 10
...What current trends affecting operations are reflected in the success of a firm such as Li & Fung? Li & Fung considered global operations and global supply chain become more and more important nowadays because of the increase of global competition. Li & Fung immediately paid more attention to develop modern online communication and transportation capabilities, which can make that the company maximize comparative advantages. There are 5 or more links in supply chain, and Li & Fung might do better if it can control supply lines in order to provide faster and high-quality products and cater the need of customers. Li & Fung operates on an international scale. How does this factor affect the firm, both positively and negatively? At that time, China has joined in WTO for almost ten years, and kept his promise that actively participated in international economic and trade exchange and tried his best to standardize the order of market. In this situation, local business became to reach more foreign customers. In fact, China’s domestic market had large growth potential. At the time of Chinese market, products were divided into two types. One type of products was cheap but had low quality. This kind of products could only satisfy basic needs. Another type of products was luxury good. However, the products which had lower price and nice quality were hardly found in China. The reason why Chinese market did not have lower-cost and high-quality products was that domestic...
Words: 374 - Pages: 2
...Introduction Founded in 1906, Li & Fung is a Hong Kong based global supply chain management group that supplies high-volume and time-sensitive consumer goods to some of the world’s leading retailers and brands (Lam, 2013). Fundamentally, the company is an international supply chain manager operating primarily in three core business areas - trading, logistics and distribution. At present, their main source of income are derived from garments and apparels, followed by non-apparel products such as ‘toys, home furnishings, sporting goods, footwear, and health and beauty products’ (Li & Fung website, 2013). Once considered as a steady blue-chip company with high dividend yield and solid earnings, Li & Fung was among one of the best performers in the Hang Seng Index (HSI) from 2007 to 2011 (Kwok, 2013). But sadly, their shares have fallen over 30% to date and is currently the second-worst performing HSI stock in 2013 (Li, 2013). With doubts over the future and the effectiveness of the company, analysts and shareholders are demanding for some new changes from the management team. Hence, the purpose of this report seeks to examine the current issues that are related within their corporate strategy. In addition, we will present a number of recommendations or changes in view of steering the company back into the right direction. 2. Key Issues 2.1. Reliance on US market and devaluation of foreign currencies From 2007 to 2011, over 90% turnover of Li & Fung is coming from US and Europe...
Words: 2121 - Pages: 9
...Análisis del Caso: Li&Fung El caso de Li&Fung nos presenta el aspecto histórico de una compañía que fue fundada para el 1906 (fundada por Fung Pak-Liu y Li To-Ming) y su evolución desde una compañía meramente de exportaciones(casa central en el sur de China) que se dedicaba a vender bienes a comerciantes extranjeros hasta la compañía de manufactura “sin fronteras”( esto por expansiones a distintas partes del mundo ej. Europa, la Cuenca del Caribe, Pacifico Asiático, etc.) como se le conoce hoy en día . Entre los aspectos históricos mas importantes de la compañía estan: A) Para los años 20 y 30 la compañía extendió sus servicios no solo al ámbito de proveer bienes sino también al almacenamiento y producción de los mismos (específicamente artesanías). B) Para 1945 el control de la empresa recae en su totalidad en las manos de la familia Fung (esto por muerte de Fung Pack-Liu en 1943 y retiro del socio de este en 1945).C) Luego de la Segunda Guerra Mundial, Li&Fung Co. expande sus operaciones, ofreciendo una amplia gama de productos tales como: juguetes, prendas de vestir, flores de plástico y electrónica. D) Para comienzos de los años 70 se incorporan a la compañía los hermanos William y Víctor Fung hijos de Fung Hon-Chu,. Desde la integración de los hermanos Fung a la compañía el modelo de dirección de esta cambia de un ámbito familiar a uno profesional introduciendo así sistemas de planificación y manejo del presupuesto de la misma. Entre los sistemas introducidos por los...
Words: 1893 - Pages: 8
...1. What are Li & Fung’s core strengths? The Li & Fung company first strength is the three years plan that set a goal for every 3 years which they consider a zero-based (start from scratch). They start with the end in mind and what they want to be at the end of the three–year period. During this plan, various goals and revenue targets are set. If the goal is not met at the end, the process provides the means to measure and analyze why they failed. This will correct the situation and enhance goal achievement in the next plan. So, when they put a target, they take the best information and think out of the box to achieve the goals. The company set a responsibility roles and reward system to track their plan. The second strength was focusing in one type of business. So, they decided to leave any retail business and focus on the trading business. This helped the company develop a huge trading network global wide. All of this was achieved with “asset light” manner where the company avoided owning any piece of the supply it managed. Simply said, having almost zero inventory. The third strength is broadening the business by the acquisition of the other trading competitor in the area to “fill the mosaic” as they would like to call it. The acquisition brought the company not only new growth engines but also the talent to catalyze and lead. In addition, the third major strength, which was strongly linked to the success of the acquisition, is the use of Information Technology...
Words: 622 - Pages: 3
...Just try to be a member Part 2 (80%) A Report submission representing 80% of the marks carrying out the following task: Introduction to the task: Li & Fung Limited is the Hong Kong-headquartered multinational group and recognized as the world's leader in consumer goods design, development, sourcing and distribution. The Company specializes in supply chain management of high-volume, time-sensitive goods for leading retailers and brands worldwide via an extensive global network. 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. Please research Li Fung in relation to the tasks below. Source: http://www.lifung.com/eng/company/ TASK: In the light of this brief company overview please answer the following four questions in connection to the industry in which Li Fung operates with particular focus on Supply Network Management aspects required for the manufacturing, distributing and selling of its products (equal number of words per section, 3000 words in total). Please research Li Fung in relation to all the tasks below. Question 1 (20 marks) Critically evaluate ALL aspects you think are relevant in relation to warehouse space and layout planning. You MUST provide various examples...
Words: 368 - Pages: 2
...Marketing Strategy Part A: (1) Key Social-Cultural trends in Hong Kong over the past decade. Hong Kong is a special administrative region of China. It is densely populated with an advanced capitalist system. Key events having cultural and social effects include the handover to China, SARS and the emergence of China as an economic power. The CIA lists Hong Kong as having one of the slowest growing populations in the world, ranked 155 with a growth rate of 0.504% per annum. It has one of the highest life expectancies ( 81.86 years, ranked 6), has very low birth rates ( 7224 births/ thousand – ranked 224) and low infant mortality rates. The ratio of men to women has changed over the past decade. In 1999 49.4% of the population was male but this figure had decreased to 47.7% by 2009 ( The Census and Statistics Department ). As a practical matter, these trends stand to complicate the prospect of maintaining rapid economic growth- perhaps severely ( Eberstadt 2007 ). Economically, Hong Kong is still a major financial centre and a leading gateway into China. However, Hong Kong’s economic interaction with the Chinese mainland has grown deeper and broader over the last 10 years, increasing the city’s economic connections with China ( Martin 2007 ). Current economic and trade dynamics have raised concerns that Hong Kong’s relationship with China will shift in the long run from one of synergy to full intergration, possibly undermining the HKSAR’s “high degree of autonomy”...
Words: 3314 - Pages: 14
