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Here’s How Li & Fung Plans to Create the Supply Chain of the Future

With profits down by nearly half and the trading environment not at all what it used to be, Li & Fung is focused on reshaping its supply chain.

In looking more closely at the sourcing company’s Three-Year Plan announced Wednesday, there are three key focus areas that will drive Li & Fung toward the supply chain of the future: speed, innovation and digitalization.

Here’s a look at the company’s plans for each.


Shorter lead times isn’t a luxury only fast fashion retailers want—it’s vital for all supply chains that are looking to cater to today’s “uncompromising” consumer, who wants everything yesterday.

“Speed is the first thing our customers look to us for to be competitive,” Li & Fung Group CEO Spencer Fung said in outlining the company’s playbook on speed. The report continued, “To help them navigate today’s ever-faster world, we remain focused on strategic investments that leverage new technologies, optimize processes and connect the dots of our digital supply chain. We aim to decrease lead times and increase speed to market for the global brands and retailers we serve.”


For one, the company said it will embrace rapid prototyping across the organization, shorten the time it takes to make decisions internally and collaborate with supply chain partners to accelerate the innovation process. New technologies and human-centric software will help Li & Fung communicate faster so that its people are connected and can work more productively. The company plans to help its major vendors build up their capacity and invest in technology to improve productivity, as well as to flatten company structures and empower people with the analytics and tools to make decisions without the manifold layers of approval hierarchies typically called for.

“It’s not just speed for speed’s sake,” Li & Fung group president Marc Compagnon said. “We’re focusing on speed to enable a customer to create a different value equation or a competitive advantage to succeed.”


Supply chains are becoming increasingly digital—and if they aren’t, those are likely the companies filling the ever-long (and growing) list of bankruptcies.

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“Mobile enabled, mass-customized products and services are the new normal for consumers,” Li & Fung said in its playbook on innovation. “Retailers and brands are challenged daily to respond to these changes in consumer expectations. We’re enabling this through external and internal collaboration.”

To innovate, Li & Fung is looking to adopt a new way of working by redesigning its global office spaces to promote more collaboration, speed and “enhanced well-being” of its colleagues. It’s also allowing customers and suppliers to co-create with them in dedicated spaces where they can test digital products and 3-D prototypes on the spot and reduce development time.

Online, the company is tapping platforms like Pinterest and a customized digital platform developed for its fashion business called WeDesign, to get designers across all of its verticals to create virtual samples for customers.

Smart products will also be a key area of focus for Li & Fung. The company has culled a team of innovators, dubbed WearWare, to focus on co-developing meaningful smart products for customers, and the process will include rethinking fabric types, plastics, sensors and connectivity.

“As the bridge between the manufacturing and retail process, Li & Fung is rethinking the type of products the new generation of connected consumers need, and is working with our partners to produce these at scale,” the company noted.

Finding that inspiration to innovate will mean looking outside of the apparel sector, too.

“Create ‘unholy alliances.’ Find and partner with companies completely outside your field, non-traditional players who force you to think orthogonally to your existing strategy and value chain,” Li & Fung quoted Singularity University’s Peter Diamandis as saying.


The supply chains of tomorrow—which very quickly need to become the supply chains of today—are multidimensional, and companies should be using tools at hand to create the most effective, efficient supply chains.

“Our ambition is to reach a state when we are delivering predictive analytics to enhance the business performance of our customers and partners,” the company’s playbook on digitalization said. “Li & Fung’s integrated digital platform has been built to capture and share data across the entire value chain, and the result will be an engine designed to enable smarter, faster and more effective decisions. This is the future of supply chains.”

In the near future, Li & Fung’s supply chain won’t look anything like the traditional, linear end-to-end supply chain that’s presently being disrupted. Instead, it will center around a digital platform that will integrate ecosystems of people, businesses, partners, processes and things.

“The value creation will come from the engagement and interaction of our customers, suppliers, vendors or industry partners,” the company noted. “As these interactions grow and scale, value comes from the interactions and the insights we draw from it. This opens an entirely new area of growth and service for our customers.”

With the platform, vendors can update their profiles, upload products and respond to alerts that all Li & Fung partners are also able to see. Records and documentation are stored online for all involved parties to see, which will help improve transparency. Virtual samples will be a mainstay in the digitalized supply chain, and a digital library of fabrics and trims, and real-time market trend data will help with things like costing. Big data will also be used to help Li & Fung customers gain insight into more than just consumer buying behavior, but to have ongoing information about design, sourcing, costing and logistics, too.

“We are building a fully digitalized platform that is at the heart of the digital supply chain of the future,” Li & Fung CTO Manuel Fernandez said.