...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...
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...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...
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...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 $2 billion global export trading company 3,600 staff worldwide Sourcing and managing the global supply chain for high-volume, time-sensitive consumer goods Product mix – hard and soft goods Soft goods – apparel, including woven and knit garments Hard goods – fashion accessories, festive or holiday products, furnishings, giftware, handicrafts, home products, furnishing, home products, fireworks, sporting goods, toys...
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...Li & Fung Limited Press Conference August 12, 2010 Interim Results 2010 Interim Results Highlights • Record high growth of core operating profit over a half-year period • Record high margins due to strong onshore businesses and increasing involvement in value-added services • Delivered strong operating leverage with continued cost savings • Turnover modestly improved, reflecting the effects of early stage of the economic recovery together with contributions from previous acquisitions and outsourcing deals announced acquisition of 7 companies, and signed 4 licensing deals so far this year • Entered into a landmark sourcing deal with Wal-Mart Stores, Inc., 2010 Interim Results Highlights (HK$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)...
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...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...
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...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...
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...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...
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...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”...
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...planning, as space will be limited by floor loads, truss, the height of ceiling, etc, it should be maximized utilization of concentration and cube and also minimized honeycombing. To optimize space utilization, it is not only developed by horizontally but also by vertically. Space concentration and cube utilization can benefit for the flexibility and ability for bulky receipts such as higher and thicker materials. Tompkins and Smiths (1998, p.243) describe honeycombing is storage space losing due to improper use of storage capacity. Honeycombing will limit multiple material loading and storage location sizes. Thus, honeycombing should be eliminated for space planning. For example, Zara utilized cube storage to increase its storage space. Li & Fung Group also adapted cubic location in warehouse to optimize space utilization. Beside, minimizing movement should be also taken into layout consideration. Warman (1971,...
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...Redesigning retail: Operating model imperatives for international retailers Deploying the right operating model can help international retailers drive profitable growth by balancing customer relevance and operational efficiency across diverse and dynamic markets. Today’s consumers are a formidable bunch. Armed with more information than ever thanks to technology, they shop anytime, anywhere and with anyone they choose. Moreover, choice, convenience and service mean just as much to them as price. Evolving customer demands are driving retailers to tailor their offerings, expand into new business segments and enhance customer touch points. At the same time, competition— always fierce in retail—is intensifying. Only the fittest or luckiest retailers have survived the global downturn, and investors are demanding ever better performance from them. Already-lean retailers are searching for new ways to achieve structural and operational efficiencies in a bid to outpace competitors. Furthermore, new players from other retail segments and industries are ramping up their retail presence. For example, big-name manufacturers including Apple, P&G and Nike are now bypassing traditional retailers and reaching consumers directly through multiple channels. Growing numbers of retailers are going international—and small wonder. Home markets are saturated, but markets near and far, particularly in emerging economies, still offer white space (see Figure 1). The world’s largest retailers are entering...
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...OPENING CASE: Building the Boeing 787 INTRODUCTION STRATEGY, PRODUCTION AND LOGISTICS WHERE TO PRODUCE Country Factors Management Focus: Philips in China Technological Factors Product Factors Locating Production Facilities THE STRATEGIC ROLE OF FOREIGN FACTORIES Management Focus: Hewlett Packard in Singapore OUTSOURCING PRODUCTION: MAKE-OR-BUY DECISIONS The Advantages of Make The Advantages of Buy Trade-offs Strategic Alliances with Suppliers MANAGING A GLOBAL SUPPLY CHAIN The Role of Just-in-Time Inventory The Role of Information Technology and the Internet SUMMARY CRITICAL THINKING AND DISCUSSION QUESTIONS CLOSING CASE: Li & Fung Learning Objectives 1. Explain why production and logistics decisions are of central importance to many multinational businesses. 2. Explain how country differences, production technology and product features all affect the choice of where to locate production activities. 3. Discuss how the role of foreign subsidiaries in production can be enhanced over time as they accumulate knowledge. 4. Identify the factors that influence a firm’s decision of whether to source supplies from within the company, or from foreign suppliers. 5. Articulate what is required to efficiently coordinate a globally dispersed production system. Chapter Summary This chapter explores the issues associated with global operations management...
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...OPENING CASE: Building the Boeing 787 INTRODUCTION STRATEGY, PRODUCTION AND LOGISTICS WHERE TO PRODUCE Country Factors Management Focus: Philips in China Technological Factors Product Factors Locating Production Facilities THE STRATEGIC ROLE OF FOREIGN FACTORIES Management Focus: Hewlett Packard in Singapore OUTSOURCING PRODUCTION: MAKE-OR-BUY DECISIONS The Advantages of Make The Advantages of Buy Trade-offs Strategic Alliances with Suppliers MANAGING A GLOBAL SUPPLY CHAIN The Role of Just-in-Time Inventory The Role of Information Technology and the Internet SUMMARY CRITICAL THINKING AND DISCUSSION QUESTIONS CLOSING CASE: Li & Fung Learning Objectives 1. Explain why production and logistics decisions are of central importance to many multinational businesses. 2. Explain how country differences, production technology and product features all affect the choice of where to locate production activities. 3. Discuss how the role of foreign subsidiaries in production can be enhanced over time as they accumulate knowledge. 4. Identify the factors that influence a firm’s decision of whether to source supplies from within the company, or from foreign suppliers. 5. Articulate what is required to efficiently coordinate a globally dispersed production system. Chapter Summary This chapter explores the issues associated with global operations management...
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...There are certain business leaders who make an impact on their companies and often on the world of business because of their philosophies, actions, and businesses they lead. For your paper, select a major business leader from the following names: 1) Steven Jobs, Apple Computer Co. 2) Oprah Winfrey, Harpo 3) Anita Roddick, The Body Shop 4) Vera Wang, Vera Wang Fashions 5) Alan Mulally, CEO Ford Motor Company or 6) Jeff Bezos, Amazon.com Describe the business leader’s primary business or business’, highlighting how the leader got started and analyze the leaders three (3) major business challenges in establishing and/or running the company. According to (Ferguson, 2012) the name Vera Wang is synonymous with weddings and bridal wear. Her story began in 1989, when her impending marriage prompted her to search for a suitable gown. Not finding any gowns fitting the look and style she envisioned. She sketched her own design and hired a talented dressmaker to turn her design into reality. According to (Vera Wang, 2012) the year following her wedding, with some financial backing from her father Wang opened her own bridal boutique in the upscale Carlyle Hotel on Madison Avenue in New York City. Catering mostly to celebrities and socialites, the Vera Wang Bridal House initially offered couture gowns by the famed designers Guy Laroche, Arnold Scaasi, Carolina Herrera, and Christian Dior. Over the next few years, Wang honed her skills as a fashion designer and eventually launched a...
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...“Turkish Airlines experiences rapid expansion”. This is the title of an article appeared on November 14, 2013 in the Financial Times. In the decade 2003-2013 the company expanded enormously, from 65 to 233 aircrafts, the passenger numbers have more than quadrupled and the number of international destinations grew surprisingly from 76 to 199. (See Exhibit 1) At present, Turkish Airlines appears to be one of the most extensive airline companies with 106 connected countries (the last was added in April 2014). It was also acclaimed as the best European company in the last four years consecutively at the Skytrax World Airline Awards, being the third most profitable carrier after Ryanair and Easyjet. The expansion continues: with the project of the third Istanbul’s international airport and the announcements of new destinations to countries like Mexico, Philippines and South Sudan. (See Exhibit 2) How a small Turkish state-owned company became so huge and successful? What are the main challenges it had to face and how did it tackle them? What are the main actual and future issues for a company that is expanding quickly and widely? We will try to give an answer to these questions in the paper: starting from an essential and short presentation of Turkish Airlines historical evolution, making a synthetic overview of its main strategies and analyzing the past and the future challenges in developing countries such as India. Turkish Airline historical steps towards internationalization...
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...can be suppliers, intermediaries, third party services providers, and customers. • Integrates supply and demand management within and across companies. All of above variations need to be strategically, tactically and operationally integrated together. It is impossible to execute borderless manufacturing without information technology, which plays very important role to enable the followings globally: • Customer service management • Procurement management • Product development and commercialization • Manufacturing flow management/support • Physical distribution • Outsourcing/partnerships • Performance measurement • Warehousing management Now these days any major companies that implemented borderless manufacturing, such Li & Fung Group have to watch out for their IT resources based on the business plan, such as talents’ retention, infrastructure updates, securities and other risk factors. Globalization has posted more challenges and benefits for these companies. The competitive advantage relies on how well the business processes are implemented and how effective...
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