Key highlight of IT usage in Li & Fung Business.

1. Li & Fung Ashish Chinthal – EPGDBM090105 Praveen Astagi – EPGDBM090115 Praveen Bhandari – EPGDBM090116 Pravin Iyer – EPGDBM090117 Tushar Phalke – EPGDBM090126 Venkat Rajendra – EPGDBM090129 EPGDBM NMIMS University, Bangalore

2. Agenda Business of Li & Fung Chronology of strategic shifts – drivers of shifts Strategic grid quadrant of Li & Fungs IT investments Strategic alignment model – Extent of alignment – Business, IT, Strategy, Capabilities

3. Li & Fung Introduction It is the world's 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 Provide tracking capabilities Streamline the flow of business information and 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. We're pulling apart the value chain and optimising each step - and we're doing it globally."- Victor Fung, Chairman, Li & Fung, in June 2000

5. Value added services across the entire supply-chain.

6. Sell “Soft” and “Hard” goods.

7. Soft – apparel including woven and knit garments etc comprise of 68% of Li Fungs business

9. Hard goods attract 10-30% margin

11. Loss in 2001: Failure due to Lifung.com

12. Steady growth from 2004 onwards

15. UPS Supply Chain Solutions

17. Strategy Changes

18. IT strategy Grid High Impact on Business Operations Low Low High Impact on Strategy

19. Information Platform for Integrated Solutions Consolidation Centers in various origins Drayage in various destinations Li & Fung De-Consolidation Hub at destinations Suppliers in various origins Shipping Drayage in various origins Send production orders Custom Declaration Custom Clearance Consolidate orders Destination DCs Place one order Update Order & shipment status, inventory visibility Management and Buyers receive reports Buyers Accounting receive a single invoice Import Direct & Trigantic Extranets Global Supply Chain Center Transaction platform, product catalogue, suppliers, procedures, self-help manual, query, reports, customer service supply chain analysis, inventory management

20. Alignment between Business & IT Three main business groups - Trading, Retailing, and Distribution. Established company-wide intranet linking critical company operations. Dedicated Extranet links key components of supply chain. Provides tracking capabilities, streamline the flow of information and provide much more granular control of supply chain activities. Believe that IT strategy central to supply chain management success. Leverage the power of the internet as customers demand more customized product choices. In 2002, started up an entire business division focused on B2B sourcing via an internet e-commerce website called lifung.com linking small- to medium-sized businesses with suppliers similar in concept to alibaba.com. L&F leads the world in supplier sourcing as a true “clicks-and-mortar pioneer”.

21. The Changing role of Li & Fung Supply Chain Management Level of Value Added Virtual Manufacturing Borderless Manufacturing Sourcing Buying Agency 1906 Now

22. Alignment between Strategy and Capabilities