This Case study will give new ideas on how Supply chain Specialist Li & Fung in Southern China in1906. It has expanded in US and other Countries and want to know how it can retain its interests in US?

1. BYANSH AGGARWAL
SUDARSHAN SAHU

2.  Major Player in GarmentTradingWorldwide.
 Established in Gaungzhou in Southern China in 1906.(silk &
porcelain main business)
 In 2000’s diversified into : health, beauty & cosmetics.
 Had 80 buying offices in 40 different Countries by 2008.
 Acquisitions based on incentives based policy.
 Has a Customer- centric organizational structure.
 Each team handled business worth US $ 20- 50 million.
 Its structure & incentive system enabled it to grow in size without
being Bureaucratic.
 2007: total turnover-US $11.854 billion.
 Contribution : US – 65% & Europe 26%.

3.  Reformation done in 3 phases :
 Phase1-1970: transformation into regional sourcing
company.
 Phase 2 -1980:Transformation into more customer centric
programs.
 Phase 3-1990: transformation into Dispersed
Manufacturing.
 In 2008, largest exporter of Garments fromTurkey.

4.  Incshape Buying Services.
 Karstadtquelle AG
 Silvereed Group;Wilson& WongTrading Co. Ltd.
 Imagine and CGroup.
 Li & Fung USA focus on: ONSHORE BUSINESS
 Proprietary brands
 Private labels
 Licensed brands
 Yielded higher profit margins.
 US $100 million reserves for new acquisitions in Europe.

5.  Exhibit 1: decline in EPS from 11.5 to 8.9 US
cents in and also decline in DPS from 9.2 to
7.3 US cents in 2008.
 Exhibit 3:ValueAddedActivities.
SUPPLYCHAIN VALUE ADDED ACTIVITIES
DESIGN INFORMATION
MATERIAL SOURCING EXTENSIVE NETWORK
MANUFACTURING TESTING SUPPORT
SHIPPING CONSOLIDATIONOF GOODS

6. In the year 2009, US went through an economic
crisis.
 What could LI & Fung do to safeguard the
growth of its Business ?
 How could it achieve its target turnover of
US$ 20 billion b/w 2008-2010.

7.  Balance trading; less US concentrated.
 Leveraging its supplier relationship into
performing sound trade overseas.
 Avoid cases like KB toys.
 Sticking to diversification; health, beauty and
cosmetics.