Li & Fung Speed Trivia
What is Li & Fung’s business model?
Li & Fung manages a global network of suppliers instead of owning factories
Why do companies like The Limited work with Li & Fung?
Li & Fung helps them respond quickly to fashion trends by managing production and logistics
What is dispersed manufacturing?
Supply chain strategy where different production steps are done in different countries to maximize efficiency
Why does Li & Fung organize its company around customers rather than geography?
Customer-focused divisions allow Li & Fung to create custom supply chain solutions, improving responsiveness and service
What is the “soft $3” in supply chain costs?
Costs in distribution, logistics, and coordination, which offer greater savings potential than cutting production costs
How does Li & Fung monitor compliance with labor and environmental standards?
Through regular factory inspections and by cutting ties with non-compliant suppliers
How does Li & Fung’s organizational structure make it more flexible?
It is made up of small, customer-focused divisions that operate independently and can quickly adapt to market changes
How does Li & Fung ensure supplier reliability?
By controlling 30-70% of a factory’s production, making suppliers dependent on them while maintaining flexibility
Why does Li & Fung invest in venture capital?
To “fill in the mosaic” by investing in companies that expand its sourcing capabilities and industry knowledge
How does Li & Fung reduce production lead times for its customers?
By reserving raw materials (like undyed yarn), pre-booking factory capacity, and finalizing product details just weeks before delivery to allow for last-minute trend adjustments