Everything is Connected: A New Era of Sustainability at Li & Fung
Li & Fung Limited (LF), a Hong Kong-based multinational, was a global leader in consumer goods design, development, sourcing, and distribution. LF managed the entire supply chain for retailers and brands around the world by working with a network of over 15,000 supplier companies in more than 40 economies in Asia, Europe, Africa, and the Americas. The company faced rising expectations on safety compliance, environment, social, and working standards. It decided to create an integrated and holistic strategy to address these issues in a manner that would create solutions and build value for LF customers in sustainable supply chain management.
This case is used in operations or supply chain courses to highlight the importance of sustainability as companies globalize their supply bases involving emerging economies. The case describes the challenges faced by companies to monitor and improve sustainability performances in their supply chain. The key lessons are that companies need to go way beyond audits, but to engage fully with suppliers, provide the right incentives, educate and train suppliers, and collaborate to create innovations that effect changes.