Li & Fung Supply Network Analysis

【Abstract】This paper present a review of the supply network management in connection to Li Fung company which is the world’s largest contract supply chain management firm， manages front-end design， marketing， sales， and corporate governance in Hong Kong and production in China. The structure of this paper is as follows： based on researching Li Fung supply network management， the respects of information technology in the supply network will be analysed.

【Key word】Warehouse； Supply Network； Information Technology

【作者簡介】李莎（1990.02-），女，西安歐亞學院，助教，研究生畢業(yè)于香港城市大學。

The role of information technology in supply network has changed dramatically in recent years. Li Fung utilizes one core system across the board for its internal operations， a proprietary technology called XTS that was developed in-house 15 years ago. To integrate information with its customers， it uses Sterling GenTran GIS as a communication bridge for all the systems. GIS is an Electronic Data Interchange （EDI） solution that helps Li Fung with structured communication such as orders， amendments and invoicing.

Not more than a decade ago， most inter-organizational information exchanges travelled through the postal system or by fax. This could be regarded as the first stage in inter-organizational information systems. EDI in the second stage， had a dramatic effect on the automation of information flows and the elimination of labour intensive data entry and re-entry processes between customers and suppliers. Traditional EDI relies on a Value-Added Network （VAN）， to store and forward electronic data. But recent developments have moved EDI to the internet where familiar web-based browser technology provides a common interface as well as substantially reduced cost for establishing EDI capabilities （Tan， 2008）. In general， Internet-based EDI makes it possible for Li Fung to engage in automatic data sharing. But of critical importance is that the use of this technology has lowered data sharing costs.

The implementation targets of Li Fung Put-to-Light systems include lean processes， shorter throughput times， fewer errors， cost savings， increased customer satisfaction and faster ability to supply. In many ways Voice and RF Scanning provide the same kinds of benefit and level of return compared with paper. However， despite being a little more expensive， Voice Directed Warehousing does provide significant quantifiable benefits over and above Scanning because it is “hands and eyes-free”（Connolly， 2008）. Voice operators visually focus on the assigned task and are not diverted by the need to key into the scanning unit， while errors due to keying inaccuracies are eliminated. Thus， voice direct systems are suggested for Li Fung to adopt for high-value articles， and rest products， particularly of awkward items， could be controlled by RF scanning.

Barcode scans one bar-code each time， RFID identifier can scan several RFID labels at the same time. The accuracy of RFID access does not require fixed paper size and quality of printing； it is not limited by measures and figures. Traditional barcode is made from paper which is easily polluted （Asif， 2005）. However， RFID has a strong resistance of water， oil and chemistry medicine， etc. Besides， as the barcode is always attached on the plastic bag or outer packing of cardboard boxes， it is easily damaged， RFID label stores the data in the chip， so it is anti-pollution. On this basis， RFID is not just a replacement for barcodes， but also ensures that the right goods are available in the right place with no discrepancies and zero errors. It makes the supply network considerably more precise and improves the efficiency and reliability of the entire operation.

Conclusion

In summary， all these integrated information technologies greatly benefit Li Fung by allowing them to work more efficiently and maximize productivity in whole supply network. Information technology in the case study Li Fung supply network was identified. Where the focal organisation is in position to actively manage， or influence， these factors， they can be termed “assets”.

References：

[1]Asif，Z.Integrating the supply chain with RFID：A technical and business analysis[J].Communications of the Association for Information Systems，2005，15（1）：24.

[2]Connolly，C.Warehouse management technologies[J].Sensor Review，2008，28（2）：108-114.

[3]Tan，H.The application of RFID technology in the warehouse management information systemp[J].In Electronic Commerce and Security，2008 International Symposium on，2008：1063-1067.