Hong Kong-based trading group Li & Fung has elevated its supply chain with digitization and data analytics to be more responsive to the ever-changing customer needs in the digital economy.
Li & Fung recently unveiled its three-year plan with a goal to create “the supply chain of the future”, aiming to speed up the time-to-market, reduce inventory and operating costs, and bring long-term business growth. The company will invest US$150 million over the next three years to carry out the plan.
“We aim to move with speed, move as fast as a startup company,” said Spencer Fung, Group CEO of Li & Fung Ltd. “We have to innovate our business models, products, channels and our ways of working with employees and customers.”
He added, “In the past, when retailers thought of supply chain, they mostly wanted to optimize costs. Nowadays, they want to optimize the supply chain with focus on speed and innovation.”
Digital platform brings speed & data insights
The company is embedding innovation not only into its products but also in its business models, and ways of working with the supply chain ecosystem partners.
In traditional product design like apparel, bags and shoes, physical samples and mannequins were commonly used in design and fitting respectively.
Li & Fung has changed to use virtual design technology to create virtual samples and virtual simulation or fitting. With virtual samples, multiple iterations in different colors and patterns can be created faster and with ease. Virtual simulation allows a designer to see how a garment looks, fits and moves on a person.
When creating innovations to the supply chain, Li & Fung has collaborated with new and uncommon partners. Fung noted the company is discussing with a 3D animation studio in Hollywood to bring in rendering functionality to its virtual samples.
Furthermore, the company has digitized manual processes such as calculating material costs, receiving and accepting orders, and submitting shipping and billing notices.
To this end, the company said that the end-to-end supply chain—from product design, product development, material costing, sampling to the final creation and delivery of products—can be reduced from 40 weeks to 21 weeks.