Contents

Contents................................................................................................................ 1 INTRODUCTION...................................................................................................... 2 1. Outline issues for Li & Fung and the need of Internet Issues.............................3 2. The supply chain management and its relationship with Technology. ..............5 2.1. The Supply Chain and the Supply Chain Management (SCM) .....................5 2.2. The supply chain management of Li & Fung................................................6 2.3. Influences of technology on the Supply Chain.............................................7 3. Critical evaluation for “Bubble in” and Turnkey solutions................................11 4. The security issue in implementing the e-commerce system .........................13 4.1. Security issues of the e-commerce system. .............................................13 4.2. Applying security issues to Li & Fung .......................................................14 CONCLUSION ..................................................................................................... 15 REFERENCE.......................................................................................................... 16

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There is no universally definition of MIS but in general. 2005). we would understand its advantages as well as importance. With Managing Information Systems (MIS). the management and administration of business activities have become more complex. with the diversity of business activities. Applying MIS to Li & Fung. that requirement becomes more important. Even if you are a management. directing and controlling the activity for which they are responsible (Lucey. Besides your daily works. this is a system which converts data from internal and external sources into information and to communicate that information. finance.or the salaries of the production or marketing. in an appropriate form. you always work with accounting. . the amount of information decreases dramatically because complex issues of the organization would be resolved. Nowadays. with the boom of information technology and its applications as: Internet. to manager at all levels in all functions to enable them to make timely and effective decisions for planning. requiring accuracy and higher efficiency. 2 .INTRODUCTION Today. You could not do better while the amount of information is getting much more and the requirement for accuracy as well as processing time is increasing. human resources issue . extrane… MIS is considered an indispensable system of the organization.

During the development process of Li & Fung. But in some cases. With this change. According to Victor Fung. the company expanded its operation as a sourcing representative of the entire Asia region.1. And to satisfy the delivery of requirement of customers. Li& Fung approached “borderless manufacturing” when the company provided “added -value services” through the whole supply chain. Korea. With new role. Scale of Li & Fung was increasing by its office system. products were collected and moved to another country (with less cost) because of quotas and labour conditions. That means performing product slicing was made in the best country. It also expanded customer base in Europe. First the company began changing its role from the buying agency to sourcing. the company had to face with the appearance of some problems that have resolved just by the application of Internet. by setting up offices in Taiwan. but it more difficult when operating on a more complex area. the company need the linking of critical company operation in different regions and the sourcing would be more efficient. In the next stage. Internet provides you infrastructure to be able to present direct routes and allow everyone in the world access the World Wide Web (www). Outline issues for Li & Fung and the need of Internet Issues. early in 1970. the company could be divided 3 . They could offer the service package from the whole area instead of just from a certain country. Internet started as a means for researchers and scientists in different institutions and different countries can share information. Singapore. most buyers can build their sourcing part in a country. linking millions of computers around the world via telecommunication infrastructure. Internet is defined as a global network formed from smaller networks.

this stage required tightly communication between the company and customers. Then. In 1999. Li & Fung still managed this dispersed manufacturing as well as help customers reduce costs although the supply chain was longer. To sum up. Li & Fung had to use Internet to speed processing of information exchange between offices worldwide and customers. After that. But understanding client’s high needs. According to Harvard Business Review magazine (2002). To implement this role.into some smaller orders and assigned them to different plants. then that plant would source its own raw materials. all of finished products were arrived in retailers and “all looking like they came from one factory”. Clearly. but provided higher value to customers. suppliers and producers. Previous. However. Li & Fung began to offer “virtual manufacturing” by offering raw material sourcing or product design services to customers. extranet in 1997 and applying the e-commerce (B2B portal) the leader realized that the integration of internet technology advanced internal efficiency and improved communication between Li & Fung parts and 4 . To solve this “speed problem”. After launching intranet in 1995. they based on data about suppliers and producers to examine which one was suit with customer needs. The supply chain of Li & Fung was divided into many steps and became more sophisticated. the company offered raw materials to suppliers. Li & Fung is a pioneer in “dispersed manufacturing”. Compared to above. suppliers and producers. Li & Fung completed its changing role by tripartite growth strategy with extension its supply chain to new markets via the Internet. the company needed to rapidly catch customer needs. the company built the flexible production model based on linking network and machines. Only information technology could help Li & Fung do that. after receiving orders from clients. Li & Fung decided the best manufacture suited to supply goods. after acquisition of Camberley.

with the increasing global competition. Internet is one of the most important factors in successes of Li & Fung. Because of this.1. continuous advanced in technology and innovation in communication and transport (eg: mobile communications. Because. 2. Internet. to compete successful in any business environment. supply chain is described as the system by which organisations source. when the business wants to meet products or services to customers.…) has spurred the continued growth of supply chain and technique to manage it. Li & Fung definitely would not be at size today. Summary. The supply chain management and its relationship with Technology. There are various definitions for supply chain but in general. many businesses may not know how their products are used in making final products to customers. methods of transporting and preserving finished product and actual expectations of customers or final customers. packing. That pushes businesses to invest and concentrate on its supply chain. they have to care more deeply movement of the material. Besides. The Supply Chain and the Supply Chain Management (SCM) Today. 2. Furthermore. In the fact. method of design. According to Rockowitz. they considered to extent “the organisation’s online presence”.customers. life-cycled of new products is getting shorter while the level of customer expectations is getting higher. make and deliver their 5 . the enterprises do not just focus on their own activities that they must be involved in the business of suppliers as well as customers. without IT.

2. The Supply Chain Management (SCM) is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customers. It includes not only manufactures and suppliers but also its transport companies. Parts. warehouses.products or services according to market demand. The following is the evolution of the supply chain management of Li & Fung: 6 . the company purchase raw materials from one or more suppliers. then shipped to the warehouse for storage at the intermediate stage and finally to retailers and customers. manufacturing centres. 2. The supply chain management of Li & Fung In a typical supply chain. details or even products are produced in one or several factories. effective supply chain strategies must be considered the relative works at different levels in the supply chain. supply chain model is applied and changed appropriately in each stage of development and becoming supply. Therefore. warehouses. retailers and customers. to reduce costs and improve the level of services. In Li & Fung. distribution centres and retail stores as well as raw material inventory during production and moving finished products between bases. Supply chain is also known as logistic network including suppliers.chain customizing.

Li & 7 . The next step of the supply chain is manufacturing control. Finally. SCM is concerned with the flow of products and information between members of supply chain management. the distribution stage will end the supply chain management of Li & Fung. it also implementation plans for raw material and factory sourcing. Influences of technology on the Supply Chain The impact of technology on the economy in general and the trading in particular is very great. Before customer needs. Li & Fung has become a manager (on behalf of clients) and made the production plan. Knowing this feature. the company has to participate in designing as well as developing products. 2. the company has been managing a complicated and creative supply chain.3. It is supposed to increase the complexity of supply chain but this brings higher value to customers. From representatives of sourcing. appearing Internet and e-commerce models creates expectation that many issues of the supply chain will be resolved by using technology. Besides. the company still must monitor the suppliers’ commitment and at that time.In this model. it brings many advantages in managing the supply chain. In other words. Thus.

online images or links and so on.resolution digital photos. the onsite Li & Fung inspector was asked to send physical samples to Hong Kong by express mail. Clearly. that made favourable conditions in understanding consumer needs as well as designing products.…and other trim from Hong Kong. This is seemed to be a strategic stage in developing Li & Fung’ perfect supply chain as the company has changed role of the trading company: from sourcing to “borderless manufacturing”. But with the introduction of intranet. If this situation had occurred with more than one client. Li & Fung launched the intranet to accelerate and simplify internal communications. Also by this system. the supply chain has run more smoothly. This allowed the Group to connect with its many offices. incurred issues would be addressed in a timely manner and the schedule of orders was still ensured. in the past. with a jacket made in Hong Kong. Therefore. manufacturing sites around the world. the outer shell fabric from Korea. the zippers from Japan. a down filling might come from China. when quality problems with Bangladeshi production happened. these issues were dealt with flexibly. As a result. 8 . only intranet may do such this. it would have affected the company’s costs.Fung has leveraged effectively the functions of technology in the supply chain’s activities by applying new programs. For instance. technology has speeded processing of information exchange between offices in the world and on that basic. the company easily monitored whether the progress of orders and shipments could be tracked in real time or not. With 48 offices in 32 countries. the online inspection and troubleshooting would be shown by high. For example. Through email. *The intranet introduction In 1995. the supply chain constantly improved by adding value services to customers.the first steps of Li & Fung’s supply chain: “teams of product specialists focused on the needs of specific customers and were grouped under Li & Fung corporate umbrella that provided centralized IT…”.

That meant when there were any problems with the products. until the fabric was cut. That promoted quick-response manufacturing by changing immediately customer demands if they wanted. Just as customers tracked a UPS delivery. clients could track an order online with the monitoring of production. and a number of other product specifications”. Li & Fung continuously launched secure extranet sites. Changes would be made online instead of sending hard copies of documents back and forth. the company was linked directly to a key customer and customized to customer’s individual needs. This helped the company save necessary costs and times and ensure progress of supply chain. the company could carry out online product development and order tracking while clients observed as well as checked their products in detail. Due to technology. With this role. Thus. extranet created streamlining communications when connecting two important elements of the value chain and this was one of factors making success for Li & Fung’s supply chain. “Until the fabric was dyed. *Applying e-commerce through B2B portal 9 . In 1997. Furthermore. Li & Fung turned back the value chain effectively to suit most customer requirements but still facilitated its supply chain. the company and customer could find solutions quickly by contacting across Internet site. the customer could change the colour.*The secure extranet sites. extranet sites made the supply chain run more seamlessly and effectively. Li & Fung is considered as the key link between manufactures and retailers. the customer could change the styles or sizes offered. whether a pocket or a cuff would be added. Firstly. in a certain aspect. receiving information was updated and treated in the fastest way. For this new program.

com. This application is simply one organisation buying products and service from another. Especially. Nowadays.which allowed customers to collaborate in designing the products or services they buy (Chakrawarty & Eliashberg. they were not concerned by suppliers and offered a “limited range of options in product specifications”. First it provided the convenient order process. it plays an important role in facilitating the supply chain’s operations. 2005). Researching SMEs in USA. to ensure the supply chain customization and innovation. Moreover. But everything would change via B2B portal of Li & Fung.E-commerce understood simply is associated with the buying and the selling of consumer products over the Internet (Thanasankit. button…and ordered online if satisfied. it is the great tool to wide and complete the supply chain.the origin of all risks. they lagged in identifying fashion trends. intermediately by technology (J. collars. After venturing with Castling and implementing “Bubble in”. clients could use the replenishment buying system. Li & Fung realized that SMEs usually lacked current information and in comparison to larger retailers. in managing supply chain. 2004) but with Li & Fung. it is used as one of popular strategies for development of the organisation. Botha. Li& Fung decided to reach SME market in the United States through B2B portal. Especially. Because orders of SME were small and in the lack of economies scale. Broadvision. Li & Fung provided the supporting program system as: Microsystem. for polo shirt on lifung. Oracle… With orders below factory minimums. they had to pay high margins for importers. Li & Fung limited mass customization. For example. Li & Fung offered an array of products with customization option to clients. the company aggregated small orders and did not require a minimum order. When market trends changed. That helped SMEs reduce the inventory levels. 2003). 10 . the users could choose limited specifications like pockets.

distribute products as well as provide online payment methods. However. advertise online products. the IT company could know the business activities of customers and important information. 2008). Therefore. Elliott. the company not only well organizes the supply chain but also take it to its customers. it could maximize the efficiency of online business. It is a great combination between information technology and business operations of the business. choosing the right provider is very important. so it is one of the most effective tools on the market. Clearly. the technology has brought great changes to organisations operating in the field of the supply chain management. Nowadays. That is the underlying value and the spread of the information technology. not all companies have a system of modern information technology while demands for it are high. For Li & Fung. Critical evaluation for “Bubble in” and Turnkey solutions. In other words. Because of this. It provides specialty service and tools while allowing you to control your content at a significant cost and time savings (Thomas M. Li & Fung helped SMEs manage effectively stages of the supply chain. For instance. e-commerce has become one of the most important strategies of the organisation. Turnkey solution is a very popular solution particularly in e-commerce. This situation creates the company that specializes in providing IT for the business. they would help their customers design website. They must have good business ethic and practices to ensure 11 .By using B2B e-commerce portal with SMEs. 3.

“Bubble in” is a concept given by Li & Fung after the company decided to use the e-commerce strategy. not outsourced. there are deeply differences between two concepts. That would affect directly to stable relationship that the company wants to build with its clients. it makes the company dependent on the outsource provider. This may be beyond the control of the provider but accidentally. For Hsieh. especially payment transactions. The company does not depend on anyone and apply IT for business 12 . In addition. Summary. when the organisation chooses turnkey solution. so it belongs to the company. With companies using “outsourcing e-commerce” or turnkey solutions. business strategy. And “Bubble in” of Li & Fung was implemented through participating on a new IT venture.customer’s transactions. Clearly. I should come from within of the company. many Internet companies may acquire offline competitors or old-economy trading companies. they must face with many difficulties as well as disadvantages from outsource providers. it creates risks dependency on outsiders. they must use sources from outside. For example. That means the organisation does not seek out the provider but they would become provider for themselves. Moreover. the company has coped with more competitors. Contrast to turnkey solutions. But the problem is given: how to turn a global export trading company into an information technology company and use the existing IT department or a new team. the project is suddenly delayed for some reasons or products need to be changed. Then. The information technology is developed from inside of the company. this is considered as “putting the fox in the chicken coop”. How about “Bubble in”? The answer is what the company worry about outsourcing e-commerce would not exist in Bubble in. the turnkey solution the company could be at risk of disclosing proprietary information. According Victor. First it leads to reject communications between the company and its customers. As a result.

commerce. forgery. The security issue in implementing the ecommerce system 4. after entering Castling. the company will never to bear the risk by the third party. As in the case of Li & Fung. the company has turned what not owned by it into its and always hold the initiative. when using e. Hence. It can be said with Bubble in. the company may face risks such as: eavesdropping. 4. It is easy to see that. the organisation should concern some security issues as the following: • Security of transaction: in commercial transactions in general and ecommerce transactions in particular. impersonation or apparent origin… 13 . The e-commerce is a business proving high efficiency for the organisation but including potential risks.com’s initial staff was come from Castling and most of them are experienced in implementing e-commerce strategy. “20% of lifung. the company also makes use of human resources from the venture. “Bubble in” is a smart and effective solution for the e-commerce strategy. ensuring absolutely confidentiality of transaction is most important. “Bubble in” also shows that the information technology plays an important in developing the corporation.activities by itself. Castling “committed key managerial staff to lifung. safety as well as independences for the company. hacker… Summary.com”. that is the risk generated from the IT such as: virus. Security issues of the e-commerce system. Otherwise. It creates the security. If so. with Bubble in.1. Then. Besides abundant human resources.

after receiving the information. users should check the correctness and genuineness of the information. 4. To protect the benefits of users as well as the company from risks. It makes sure that if one of them is attacked. That makes the safety and continuity of business operation online.To ensure the confidentiality of transaction.commerce is stored in many places with many forms. the company could use measures like: data encryption. the rest still operate normally and is not affected by others. • Check the correctness and authenticity of the information in transactions: the online transaction is borderless and parties do not see each other. digital envelope. Thus. electronic signatures. to combat the attack of virus. Applying security issues to Li & Fung Like any organisation using the e-commerce system in the world. hackers.2. the data of e. intruders. Therefore. • Place data storage by various forms: to prevent the risk due to natural disaster incidents or acts of terrorism. The destruction of the virus is unable to measure. businesses need to install effective anti-virus software. 14 . Li & Fung should have different ways to control them instead of managing them by the only policy. Li & Fung always must face with security issues being as an integral part of the information technology. When installing on the system. it will destroy the database of the enterprise stored in the computer or steal the information and transfer them to the virus sender. • Install anti-virus software: viruses are always threats to enterprise network. Li & Fung should examine some suggestions:  The company should have a mechanism for the distributed database This is kind of data having the similar information and relating to each other.

Li & Fung also know that technological advances have allowed business to take advantage of growing market opportunities (Sloman. the management of Li & Fung decided the technology should come within the company. It is can be said. Therefore. CONCLUSION From an export trading company.  The company have to enhance awareness for staffs At first listen. That is because the company has used a reasonable strategy especially strategy relating to the development of information technology. 15 . To prevent hackers or intruders from unauthorized accessing. The companies have continuously applied new software to serve businesses as well as complete the supply chain. this hint does not seem reasonable but it is really essential. That even happens to many famous technology companies and it is one of ways hackers often use. the company have to put software as firewall. Moreover. especially gateway internet Li & Fung is the global company so the data system is very huge. This concept leads goals of Li & Fung in the following years. Li & Fung must use the effective protecting software. J. Many hackers have stolen information by losing awareness of information technology. 2005). Li & Fung has become a global export trading company and famous for the supply chain management. the company also use the best antivirus software and update them regularly. Li & Fung is the typical company in applying MIS successfully.

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