tommy hilfiger, the well known designer and marketer of casual fashion, recentlt

Question

tommy hilfiger, the well known designer and marketer of casual fashion, recentlty sold its global sourcing group to li and fung , a buying agency for consumer goods with its headquaters in hong kong . at the time of the slae , tommy hilfinger sourced principally from hong kong , taiwan , india, bangladesh, sri lanka , tunisia , the united states and honduras. The transfer of tommy hifigers sourcing operations to li and fung was intended to capture significant synergies with the existing network of li and fung, which was well entrenched in china , specifically with 19 offices on the mainland alone . Additionally, the purchase by li and fung will strengthen its portfolio of sourcing business and ultimately provide leverage to work with other brands. this transaction should be viewed as a very significant decision by tommy hilfiger to opt for an outsourced solution to its strategic sourcing needs. in the words of the ceo of the tommy hilfinger group, our own operated buying offices have contributed tremendously to the development of our business to date , but we believe that to take things forward we can benefit tremendously from the integration of these offices within the grater network of li and fung ,with over 70 offices in over 40 countries and territories, including as many as 19 offices in china alone .

questions

1. what reasons do you think led tommy hilfiger to consider this unique approach to transfer its sourcing operations to li and fung ?

2 if you were a supply chain excutive at tommy hilfiger, What steps or approaches would you consider taking to make sure you did not lose lose control over the inbound logistics portion of your overall supply chain?

3. if you were an executive at li and fung , what future strategic business decisions and directions do you think would be appropriate to consider both for tommy hilfinger and for other clients?

Explanation / Answer

Ans1: The prime objective behind the move is to increase the cost effectiveness of the operations and improve the base for sourcing operations through expertise of Li and Fung. Additionally the company wishes to improve its foothold in the new territories and create a ground for its future plans. It aims to utilise the integrated supply chain formed by the alliance to enhance the quality and effectiveness of sourcing operations.

Ans 2 The effectiveness of supply chain integration holds the key to protecting the interests and retaining control of the inbound supply chain. For doing this, the roles, responsibilities and deliverables of the managers should be carefully fixed to exercise control over inbound logistics. The technology should be used to ensure that only a dedicated part of the supply chain serves the logistics part of Li and Fung and does not affect the other functions.

Ans 3: As an executive of Li and Fung, one's efforts should be to maintain this strategic relationship through collaborative approach and working towards mutual benefit.It should also not shift its focus from entertaining existing and potential customers.It should also leverage its position as an ally to Tommy Hilfiger in increasing its brand value and winning more business by forming such associations.

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