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Essay on Li & Fung and Technology


Li & Fung Company is an international operation sourcing and supply management company headquartered in Hong Kong, the People’s Republic of China (Li & Fung, 2015). The main products manufactured and merchandised by the company are garments, toys, gifts, fashion accessories, furnishings, sports and travel items. As one of the most successful internationally recognized supply chain manager, Li & Fung provides services in product development and design, raw materials shipping, quality assurance services and supply planning and management services. Although the primary market of the company is China, nowadays it is demonstrating active expansion to the Western and American markets (Packowski, 2014).

The purpose of this report is to speculate about the use of technology in the company business cycles. In particular, this report seeks to analyze the current state of technology use and compare it with the best practice evidence. Secondly, the paper examines the main technological oversights of the company and offers possible improvements in this area, with a focus made on the customer relationship systems and management styles.

Li & Fung operations and technology

In order to understand whether the company is considered as technologically advanced, several important sections of the company performance should be examined. First and foremost, a close look at the customers care practices should be made (Larson & Haldorsson, 2004). Secondly, it is important to analyze whether the company allocates its resources properly and whether this resource allocation is done manually are computationally (ibid.). Thirdly, the markets of the company are another important highlight because the presence of contemporary methods of advertising and shipments make virtually all markets accessible to a supply chain manager (DeGregor, 2010). Finally, in order to conclude on effective or non-effective use of technology staffing processes should be examined (Khurana, 2007), i.e. it is important to understand how the company recruits the best talents and what methods to retain them are applied.

In the present case, Li Fung is demonstrating relatively skillful use of the contemporarily available technologies. Firstly, customers care practices are systematically and diligently updated (Packowski, 2014). This process involves installation of the brand-new, visually appealing software, creating and maintaining different call centers and help desks, hiring multilingual staff to serve the needs of international customers and other popular practices (Haag, Cumings & McCubbrey, 2004). The company is known for its use of versatile transportation methods, arranging the deliveries in a way which is the most convenient for the company customers. The company also manifests that it guarantees the fastest methods of transportation, hereby ensuring timely and quality delivery for its customers (Li & Fung, 2015). Furthermore, identifying and correcting the gaps in the existing supply chains is the task of prioritized performance for the company. In particular, nowadays the information is automatically collected, then the program generates the reports and they are submitted to the consideration of the company managers, in the company consumers experience any difficulties with the stock provided by the firm or with its services.

These findings indicate that contemporary business practices of the company are fully consistent with the existing management theoretical framework. To be more specific, contemporary approaches to management identify three major elements of effective business performance. Firstly, the product must be of high quality to ensure that the expectation of the consumers is properly addressed. In the present scenario, it is clear, that the products manufactured by the company, or ordered from other suppliers suit the expectations of the customers because there is practically no unsold supplies. Secondly, the most updated and advanced advertising technologies should be applied in order to gain and retain competitive advantage (Khurana, 2007).
In particular, the company is proactive in terms of using advanced social media advertising, Google AdWords targeted advertising and regularly hire the most popular bloggers to post reviews depicting the products of the company in a favorable way. Another important theoretical postulate is that advertising should be balanced in its nature and scope. To be more specific, advertising should not be bothering, tiresome or excessive. To illustrate, emerging pop-ups malevolently integrated into the web applications during different open source software installation is nowadays recognized as one of the worst methods of advertising, which usually exercises the very opposite effect, then it was expected. In this regard, the advertising of Li & Fung is consistent with all existing standards of excellence. It is unpretentious, but at the same time visually appealing and attractive.

Furthermore, technology is of immense practical significance for the needs of internal communication and data sharing between the different managerial departments of the company. The development of means of instant communication, including corporate web messengers, corporate clouds, and an Ethernet connection are of fundamental importance for business thriving nowadays (Packowski, 2014), primarily because effective communication and data protection are recognized as the main ingredients of a company commercial success. Li & Fung integrated the most accomplished technological advancements to ensure that the interchange of information between the employees of the company is swift and incessant (Li & Fung, 2015). Special corporate network has been ordered for these needs. At the same time, the company recognizes the growing importance of security issues of the classified corporate data. In order to address these needs properly, the company uses one of the most successful solutions – Symantec Endpoint Protection, which helps to protect the internal confidential data of the company from any types of malevolent interception attempts. This solution prevents all types of DoS text, files scripting, the password authentication hack and unlawful encroachments upon the company technological security (Li & Fung, 2015).

Problems of Li & Fung

At the same time, the company falls behind its competitors in terms of Customers Relationship Management system (also known as CRM). This system tracks the customers, represent them in a hierarchical or alphabetical order, and provides other types of all relevant information (DeGregor, 2010). Nowadays, the company utilizes a relatively outdated approach to customer’s relationship. To be more specific, a profile for each customer is stored separately while in accordance with the best practices of the industry they should be integrated into a single, unified system (DeGregor, 2010). Nowadays, most popular and technologically advanced system of customers’ relationship management is This solution provides the following options for the operator. Firstly, it provides an interface for case and task management while the system is capable of routing and highlighting the most important events. Secondly, the customers receive an opportunity to log in into the system, track their particular issue and seek assistance from the company representatives. An option is allowing signing via the social networks became available in 2012.

The fact that Li & Fung failed to integrate this option as its primary CRM system huge strategic failure and an egregious deviation from the best practices standards.

Secondly, another fundamental best practice standard is a shift from vertical management practices to the horizontal ones, supported by democratic management approach in contrast to the authoritative one (Khurana, 2007). Nowadays, the most internationally acknowledged supply-chain tycoons including Walmart, Tesco and other giants of the market follows these approaches (Packowski, 2014). As a result, their sales and ROI are reported to be significantly increased. Democratic corporate governance and horizontal structure are effective in terms of employee motivation, corporate loyalty and professional growth. This opinion is supported by the reputable business scholars, as well as by the number of empirical investigations.
In contrast to this approach, Li & Fung is a typical Chinese company, where strong hierarchy, complex reporting system and authoritative (sometimes described as draconian) start of corporate governance are the main components. The managers of the company justified this approach by the traditional Asian model of corporate culture, where the mindsets and the behavioral patterns of the employees are adapted to this specific style (Packowski, 2014). However, management approaches are very dynamic nowadays, changing the most conservative business societies. The most illustrative example in this regard is, one of the most powerful online merchandiser, which successfully adapted Western management practices for its corporate needs. Therefore, this type of “best practice” managerial style should be indispensably applied by the board of directors of Li & Fung in order to retain its competitive advantage, and possibly, to gain more market dominance.


This analysis demonstrated that Li & Fung comprehends the importance of technology integration into the business cycles. This company made substantial updates in its internal communication practices, filesharing and data protection techniques. However, the situation is far from business excellence perfection. In particular, further improvements are necessary for the field of customer relationships management. The company needs to focus on or similar software produced by Oracle. Nowadays, these platforms are the most effective in terms of controlling and monitoring operations with the customers. Besides, radical changes in the managerial practices are required to make the most flexible and consistent with the “democratization” trends in the global corporate culture.


DeGregor D, 2010, The Customer-Transparent Enterprise. Cork: Publish on Demand Global LLC.

Haag, S., Cummings, M. & McCubbrey, D, 2004, Management information systems for the information age. Boston: McGraw-Hill.

Khurana R, 2007, From higher aims to hired hands the social transformation of American business schools and the unfulfilled promise of management as a profession. Princeton: Princeton University Press.

Larson PD, & Halldorsson A, 2004, Logistics versus supply chain management: an international survey. International Journal of Logistics: Research & Application, Vol. 7, Issue 1, 17-31

Li & Fung, 2015, 2014 Interim Report, Retrieved from

Packowski J, 2014, LEAN supply chain planning : the new supply chain management paradigm for process industries to master today’s vuca world. Boca Raton: CRC Press.

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Checked: 24 Apr 2017
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