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- Case Study - Presented by:
Ta Thi Quynh & Le Hong Ngoc LI & FUNG LI&FUNG
AN EXPERT IN
SUPPLY CHAIN MANAGEMENT LI&FUNG'S OUTSOURCING
MANUFACTURING ANSWER THE QUESTIONS CONCLUSION 1906: Founded by Li & Fung
1946: 100% owned by the Fung family
Now: Controlled by the Fung Brothers Interconnected business network
15,000 independent suppliers U.S. $ 19.3 billion market value
U.S. $ 13.5 billion sales
Forbes's 50 Asia Fab Companies Question 1.
What are the benefits to Li & Fung's customers of working with the company? Why do companies like the Limited outsource the coordination of manufacturing to Li & Fung, rather than do it themselves? Benefits
Time-saving of R&D
Attractive combination of costs of production and quality of the products
Time guarantee Decision of Make-or-Buy
Costs of production
Quality Question 2.
Li & Fung does no manufacturing itself. What then is its role? How does the company create value? Manage the supply chain
Research of market
Shipment of materials
Management the logistics
Delivery of the final products Question 3.
What do you think drives the choices that Li & Fung makes about who should produce what to its clients? Decision of Make-or-Buy
Costs of production
Quality Question 4.
What is the source of Li&Fung's competitive advantage in the global economy? Business strategy: GLOBAL NETWORK STRATEGY
Comparative advantage: COORDINATING ADVANTAGE SUPPLY-SIDE SOURCING NETWORK DISPERSED MANUFACTURING ORGANIZATIONAL STRUCTURE 15,000 suppliers, 40 countries
3 retail chains, 750 stores
---> Provide far-flung, customized,
flexible network for each types of
customers 28,000 employees, 300 offices
1 million workers worldwide
---> Take advantages of many
countries Supply design, planning
Control quality, testing, logistics
---> Specialize, reduce the costs,
guarantee the quality THANK YOU FOR YOUR ATTENTION Lesson learned: An MNC must
Realize its sources of competitive advantage
Take use of the specialized sources
Manage the supply chain and control the manufacturing
Build a suitable and flexible organizational structure
---> Decision: MAKE-or-BUY?