Li_&Fung

Li & Fung’s Supply Chain Management Polices and Strategies As a Supply Chain Manager across many producers and countries. In Li & Fung trading group, they provides the convenience of a one-stop shop for customers through a Total Value-Added Package: from product design and development, through raw material and factory sourcing, production planning and management, quality assurance and export documentation to shipping consolidation. While cost considerations have resulted in the concentration of manufacturing activities in Asia, recent years have seen an expansion of Li & Fung 's quick-response capabilities in areas like the Mediterranean, Eastern Europe and Central America that are closer to customers in Europe and the US. Instead of owning any production facilities, Li & Fung manages a large number of quality-conscious, cost-effective producers who can deliver to a deadline for its customers. In their business. Working in partnership with their customers, they cater for their needs of competitive pricing, quality, on-time delivery, as well as ethical sourcing. They manage the logistics of producing and exporting private label consumer goods across many producers and countries. Despite the continuing evolution of Li & Fung’s order management capabilities, many interactions still occur in traditional ways, through phones, faxes, and personal visits. Li & Fung has excelled at finding extremely low-cost labor and raw or processed materials and then identify the most efficient manufacturers. Figure 1 display the complex nature of Li & Fung’s business model. Although their supplier relationship mechanisms are not as sophisticated, as there customer-side interaction, Li & Fung is able to coordinate the production of high-quantity, low-complexity products at extremely low prices. According to William Fung,[1] “We are actually the bridge the bridge between low-cost, labor-intensive manufacturing of consumer goods in the developing world and the consumers of those products, who are primarily in large, developed economies” (Hostein, 2002) The company manages the supply chain for high-volume, time sensitive consumer goods. Garments comprise a large percentage of its business, which also covers the sourcing of hard goods such as fashion accessories, furnishings, gifts, handicrafts, home products, promotional merchandise, toys, sporting goods and travel goods. Li & Fung is headquartered in Hong Kong.