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Mis/enterprise System

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Li & Fung Export Trading Company was founded in 1906 by Fung Pak-Liu and Li Toming in Guangzhou, China. Between 1920 and 1930 the company was diversified into manufacturing and warehousing. After the passing of Fung Pak-Liu in 1943, his son Fung Hon-Chu assumed charge of the company. In 1974 the company was owned and operated by Fung Pak-Liu, William and Victor. In 1980 they expanded operations throughout the Asia pacific region. By 1995 they expanded their offices around the globe. They also launched an intranet to link their corporate offices together. In 1997 they launched a secure extranet to connect to their customers and suppliers. By 2000 they were a $2 billion global export trading company with 3600 employees world-wide, and with sales of 69% in the United States and 27% in Europe. Their Product mix consisted of hard and soft products. Li & Fung employed a Holistic Supply chain management that provided value-added services across the entire supply chain in a borderless manufacturing environment. This borderless manufacturing environment provided customization of the supply chain. With the acquisition of Camerley in 1999 they were able to offer clients virtual manufacturing and product design. However none of this could have been accomplished without the culture of Li & Fung. The culture of the company was modest, quick thinking and very responsive. The people are externally focused on the tasks of the company. Communication was fostered across the Group. Separate and individual management teams were employed worldwide. They operated under a corporate umbrella with centralized IT, financial and administrative support. The future growth of Li & Fung was seen coming from three areas: organic growth, expansion through acquisition and extension of its supply chain to new markets via the Internet (E-commerce). To help launch their e-commerce they employed an IT division consisting of 60 employees, using outsourced software development. In 1995 the intranet was launched to link the Group’s offices and manufacturing sites around the world. In 1997 they launched secure extranet sites. This allowed the linking of the company directly to key customers while providing customization of customer’s individual needs. The brothers believed to avoided being disintermediated they had to go online. As with any business there are competitive threats. Li & Fung’s old economy retail customers felt seriously threatened by Internet pure plays. They felt that Internet companies could use the money that was pouring in to damage offline competitors, often by acquiring them or their key people. Other possible threats come from online companies acquiring old economy trading companies and offline companies partnering with a pure online company. William Fung believed that

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