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Li & Fung Group's export business procurement and supply chain management 2 replies,6698 views

Li & Fung Group is a Hong Kong-based multinational business groups of listed companies in Hong Kong and the Hong Kong Hang Seng Index and Morgan Stanley in Hong Kong Index. Li & Fung Group uses the concept of supply chain management business export trading, distribution and retail three **** businesses, so far 97 years. Group's 2002 turnover of more than 5.8 billion, employing over 18,000 staff. Li & Fung Group, established in 1906 in Guangzhou, China engaged in foreign trade in that year the first Chinese-owned companies, breaking the then foreign firms on China's foreign trade monopoly. From 1906 to the present, the role of Li & Fung's business has gone from simple procurement agent to global evolution of supply chain management (see below). Evolution of the role of experience in the business, while Li & Fung Trading value-added services to provide customers with increasing the added value of trade creation Li & Fung is also growing. Li & Fung business into purchasing agent ninety-six years ago, when the Li & Fung was established in early trade, it is only between customers and suppliers to act as an intermediary role in trade, as proficient in English, founder of Li & Fung, Li & Fung Trading as a bridge between manufacturers and overseas buyers. Subsequently, Li & Fung simple procurement agent gradually extended to other more extensive services. The first stage of the procurement company, Li & Fung to play a procurement company, the regional supply of the role of agents, through different regions in Asia such as China, Taiwan, Korea and Singapore to open an office to expand business. In addition to providing the latest market information from time to time to the buyer, the Li & Fung also provides services of different manufacturers to make products, productivity and quality assessments, and for the manufacturers to provide buyers and suppliers, interest Feng trade negotiations on behalf of buyers to the manufacturers price and quality management to do to achieve that they can purchase at reasonable prices to the desired product. On the other hand, Li & Fung has also assisted in the factory production management and to help buyers do monitor factories in labor laws and environmental aspects of production to processing to ensure they meet the requirements of international standards. All in all, as a sourcing company, Li & Fung main goal is to manufacturers and buyers to establish long-term partners to achieve win-win situation. Li & Fung in the development process of the introduction of some advanced business and management concepts, which led the Li & Fung has entered a new stage of development. In addition to production without Borders as a procurement company, Li & Fung in the eighties is also a step forward and become borderless production planning managers and implementers, customers will be given an initial product concept of Li & Fung, such as product design, shape, color and quality requirements, etc., and then developed by Li & Fung customers a complete production plan, according to the customer market and the draft proposed by the design department, Li & Fung will conduct market research, purchase the appropriate parts in various places, such as cloth, lace , as well as provide the most suitable product manufacturers. In the production process, Li & Fung will also make planning and monitoring production processes to ensure product quality and timely delivery. In this borderless production under the touch-type, Li & Fung in Hong Kong engaged in the design and quality control programs, such as high value-added business, and the low value-added services, such as production processes, distribution, the best place to another , for example, mainland China, so that the whole production process and the process to achieve truly global. No boundaries in the implementation of virtual production and management of production plans, based on Li & Fung has developed another business model, known as the virtual production, in this pattern among the Li & Fung is not an intermediary or agent of another buyer, but the customer suppliers, Li & Fung will sign a contract directly with overseas buyers, Li & Fung is still not have factories, but will outsource production tasks to the strength of the factory, and Li & Fung will co-ordinate and closely involved in the production process , engaged in all product design, procurement, production management and control, and logistics and shipping to other supportive work. Overall supply chain management of virtual enterprises is a product actually has a comprehensive supply chain management. In the virtual production model based on the whole supply chain in order to make more reasonable and smooth operation, Li & Fung continued to develop a more comprehensive supply chain services. In addition to the center responsible for a series of work products, including market research, product design and development, raw material procurement, choice of supplier and production monitoring, the Li & Fung also oversaw a series of import and export clearance procedures and the local logistics arrangements, including for import and export documents, customs clearance, arranging export transportation and local transportation. In addition, Li & Fung also selectively potential raw material suppliers, factories, wholesale importers and retailers to choose from. Occupy these key positions in supply chain financing companies, so that both supply and demand supply chain companies each node can best operate. In fact, in the overall supply chain planning above, Li & Fung will further the entire supply chain, decomposition, analysis and planning of each link, such as the development of strategic arrangements and replenishment of inventory and other programs, and strive to constantly optimize the supply chain operations. Simple induction, Li & Fung Trading supply chain management for the main purpose of the content at a reasonable price overseas buyers purchase the right products and shorten delivery cycles. Li & Fung can be said that the driving force behind trade supply chain, from customer orders, according to customer demand, Li & Fung Trading orders are created for each one of the most cost-effective supply chain, providing customers with cost-competitive products. Li & Fung, as global supply chain management is constantly under development and evolution, Li & Fung has already developed into a global supply chain management business, its global distribution network has been compiled in 38 countries and regions, with 68 branches and offices. At present, Li & Fung's customers include leading European and American brands such as Gymboree, Abercrombie & Fitch, Toys "R" Us, Walt Disney, Kohl's, Avon, Reebok, Coca Cola, Esprit, Debenhams, Adams and so on. Some clients such as Coca-Cola and Walt Disney regarded part of its procurement operations under the contract out to the Li & Fung, this approach reflects the company to outsource non-**** business products to the professional concept of the company's supply chain management so that enterprises can focus on their **** business, enhance their competitiveness. Simple induction, Li & Fung as a customer services include: l in the market research to understand consumer demand, to provide the major market trend information; l research and development of raw materials, such as fabrics, lace and power of accessories , as well as raw materials for the customer to collect the latest information; l according to the latest market trends, design and development of products to meet market demand; l according to customer demand for raw materials and the supply capacity of different regions paired with customers to select the best purchasing countries and regions and manufacturers, the implementation of the production without borders, to achieve global value-added products; l monitoring procurement, shipping and configure factories of raw materials and accessories to various countries; l in the factory production process, we will also provide technical assistance to ensure product quality and the various production processes can follow the customer's production requirements; l production in order to achieve rapid response, not only control the supply of major raw materials, and the strategic management of inventories and timely supplement with inventory; l also plans to build transportation and shipping delivery service; l Finally, is one of the most important part, is to information technology to product development and find new links of suppliers and key buyers for overseas customers to tailor web pages meet their individual requirements. Case: Li & Fung to achieve information technology and supply chain management, procurement operations have been combined with today's impossible to be "left to pay the right hand," the intermediary model, but should be made between customers and suppliers with the appropriate use of information technology to shorten the completion time of orders, reduce costs and enhance flexibility. Li & Fung in the customer's supply chain through the development of procurement and production processes, can receive the order to the products manufactured by the time reduced from 3 months to 5 weeks. In the shortest possible time for customers purchasing the lowest cost, you need to have a sound management and operation mechanism, and using information technology to promote the supply chain management can make to the information flow and material flow more smoothly, and improve overall supply chain efficiency. As an example, Li & Fung Trading customers to develop products specifically for the hardware, an electronic commerce application software "Import Direct" *, Li & Fung business hardware products is the **** of the trade sector management system. Import Direct suppliers and customers to provide a platform for online business transactions, not only for the promotion of a product supplier to provide interfaces also provide a very convenient product sourcing and tracking tools. Supplier to its product photos can be uploaded to Import Direct, the system software will organize the photos into a product catalog (catalogue), for customer access; customers will be able to query the system to submit information and purchase orders ( see below). Import Direct trade is also connected to the Li & Fung, "Order Tracking System" (Order Tracking System or OTS) and the export trade system XTS-5. Suppliers, customers, and Li & Fung employees to exchange information with each other, but also in real time on the Import Direct system for product ordering information and commerce form a two-in-one network. Li & Fung Trading information management system not only to integrate the company's internal and external information, but also to work with the company's business partners, including customers, manufacturers and logistics companies to stay in contact and communication, members of the supply chain to shorten the feedback time, and by this information with partners to establish a closer relationship. Supply chain management concept of the seven major markets in the increasingly globalized, competitive business alone is not enough in itself, and must rely on the whole supply chain will be competitive, supply chain management and supervision of participants must be good supply chain, we can remain competitive. When companies face when growing customer demand, it can not do supply chain management. Although the definition of supply chain management has not yet reached consensus, but Li & Fung with many years of practical experience and some scholars, summarized in the following seven key concepts * Supply chain management: 1. To the customer as the center of market demand pull as the driving force; 2. emphasized the company's **** business and competitiveness, and its positioning in the supply chain, outsourcing non-**** businesses; 3. the business closely, risks and sharing benefits; 4. the use of information technology to optimize supply chain operations; 5. continuous improvement in all supply chain processes; 6. shorten the completion time of production as close to the real needs; 7. reduce the purchasing, inventory, and the links between transport costs. All in all, supply chain management philosophy is to complete the change, new enterprises, whether manufacturers or traders must be customer-centric, the pursuit of the highest production and circulation of the overall efficiency of the production deployment of the best factories, the best place. Thus reducing delivery times, reduce the order size, rapid response to market demand, and integration process, with the least cost to complete orders. China's accession to the World Trade Organization, which means the domestic market and international market standards. Domestic enterprises will face the fierce competition from foreign companies, competition in the global market under the same rules. Competitive environment of globalization, Chinese enterprises also need to purchase and production around the world, and composed of partners with foreign companies for the global layout. The concept of supply chain management provides a strategic thinking approach to domestic enterprises optimize their clear positioning and business processes. Of: mun: Hong Kong Li & Fung Development (China) Limited, the CPPCC National Committee
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