Global apparel supply chain management

Li Fung is a Hong Kong-based company that specializes in supply chain management ([82]). The origins of the firm can be traced to Victor 

Li Fung takes no business risk but has access to over 1 million employees. The employees work for their independent owners but reserve about 30% of the capacity for access by Li Fung. Li Fung knows their capabilities and allocates work after demand unfolds. The abdity to adjust capacity use to demand reahzations permits faster turnaround of orders within the quotas. Also, sinc e Li Fung approaches the particular supplier with the expertise independent of location, they effectively manage dispersed production. 

Victor Fung refers to the firm s capabdity as the soft 3 of the supply chain. He explains that if a product that leaves a plant costing 1 ends up at retail for 4, the 3 represents the cost of inventory, forecast error, exchange rates, retail markup, and other factors. There is a much better chance at reducing the 3 than the 1. Li Fung focuses on creating a customized value chain for each order ([82]). This represents a classic example of a pure supply chain company. 

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Modelling of uncertainties in supply chains has become important with the proliferation of product varieties and the increased volatility of the global market places of the contemporary business environment. For instance, product range and product style in a fashion industry are renewed constandy while in the basic apparel industry, long production and distribution lead times still prevail. Managing business environment dynamics in an uncertain and competitive market is a challenging task and forced many organizations to reform their operational processes. 

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