Contents

Contents................................................................................................................ 1 INTRODUCTION...................................................................................................... 2 1. Outline issues for Li & Fung and the need of Internet Issues.............................3 2. The supply chain management and its relationship with Technology. ..............5 2.1. The Supply Chain and the Supply Chain Management (SCM) .....................5 2.2. The supply chain management of Li & Fung................................................6 2.3. Influences of technology on the Supply Chain.............................................7 3. Critical evaluation for Bubble in and Turnkey solutions................................11 4. The security issue in implementing the e-commerce system .........................13 4.1. Security issues of the e-commerce system. .............................................13 4.2. Applying security issues to Li & Fung .......................................................14 CONCLUSION ..................................................................................................... 15 REFERENCE.......................................................................................................... 16

INTRODUCTION
Today, with the diversity of business activities, the management and administration of business activities have become more complex, requiring accuracy and higher efficiency. You could not do better while the amount of information is getting much more and the requirement for accuracy as well as processing time is increasing. Even if you are a management, that requirement becomes more important. Besides your daily works, you always work with accounting, finance, human resources issue - or the salaries of the production or marketing. With Managing Information Systems (MIS), the amount of information decreases dramatically because complex issues of the organization would be resolved. There is no universally definition of MIS but in general, this is a system which converts data from internal and external sources into information and to communicate that information, in an appropriate form, to manager at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the activity for which they are responsible (Lucey, 2005). Nowadays, with the boom of information technology and its applications as: Internet, extrane MIS is considered an indispensable system of the organization. Applying MIS to Li & Fung, we would understand its advantages as well as importance. .

1. Outline issues for Li & Fung and the need of Internet Issues.
Internet is defined as a global network formed from smaller networks, linking millions of computers around the world via telecommunication infrastructure. Internet started as a means for researchers and scientists in different institutions and different countries can share information. Internet provides you infrastructure to be able to present direct routes and allow everyone in the world access the World Wide Web (www). During the development process of Li & Fung, the company had to face with the appearance of some problems that have resolved just by the application of Internet. First the company began changing its role from the buying agency to sourcing. According to Victor Fung, most buyers can build their sourcing part in a country, but it more difficult when operating on a more complex area. With new role, early in 1970, by setting up offices in Taiwan, Korea, Singapore, the company expanded its operation as a sourcing representative of the entire Asia region. It also expanded customer base in Europe. Scale of Li & Fung was increasing by its office system. With this change, the company need the linking of critical company operation in different regions and the sourcing would be more efficient. In the next stage, Li& Fung approached borderless manufacturing when the company provided added -value services through the whole supply chain. That means performing product slicing was made in the best country. They could offer the service package from the whole area instead of just from a certain country. But in some cases, products were collected and moved to another country (with less cost) because of quotas and labour conditions. And to satisfy the delivery of requirement of customers, the company could be divided

into some smaller orders and assigned them to different plants. After that, all of finished products were arrived in retailers and all looking like they came from one factory. The supply chain of Li & Fung was divided into many steps and became more sophisticated, but provided higher value to customers. According to Harvard Business Review magazine (2002), Li & Fung is a pioneer in dispersed manufacturing. However, Li & Fung still managed this dispersed manufacturing as well as help customers reduce costs although the supply chain was longer. To solve this speed problem, Li & Fung had to use Internet to speed processing of information exchange between offices worldwide and customers, suppliers and producers. In 1999, after acquisition of Camberley, Li & Fung began to offer virtual manufacturing by offering raw material sourcing or product design services to customers. Previous, after receiving orders from clients, Li & Fung decided the best manufacture suited to supply goods, then that plant would source its own raw materials. But understanding clients high needs, the company offered raw materials to suppliers. Clearly, the company built the flexible production model based on linking network and machines. Compared to above, this stage required tightly communication between the company and customers, suppliers and producers. To implement this role, the company needed to rapidly catch customer needs. Then, they based on data about suppliers and producers to examine which one was suit with customer needs. Only information technology could help Li & Fung do that. To sum up, Li & Fung completed its changing role by tripartite growth strategy with extension its supply chain to new markets via the Internet. After launching intranet in 1995, extranet in 1997 and applying the e-commerce (B2B portal) the leader realized that the integration of internet technology advanced internal efficiency and improved communication between Li & Fung parts and

customers. Because of this, they considered to extent the organisations online presence. Summary, Internet is one of the most important factors in successes of Li & Fung. According to Rockowitz, without IT, Li & Fung definitely would not be at size today.

2. The supply chain management and its relationship with Technology.

2.1. The Supply Chain and the Supply Chain Management (SCM) Today, to compete successful in any business environment, the enterprises do not just focus on their own activities that they must be involved in the business of suppliers as well as customers. Because, when the business wants to meet products or services to customers, they have to care more deeply movement of the material, method of design, packing, methods of transporting and preserving finished product and actual expectations of customers or final customers. In the fact, many businesses may not know how their products are used in making final products to customers. Besides, with the increasing global competition, life-cycled of new products is getting shorter while the level of customer expectations is getting higher. That pushes businesses to invest and concentrate on its supply chain. Furthermore, continuous advanced in technology and innovation in communication and transport (eg: mobile communications, Internet,) has spurred the continued growth of supply chain and technique to manage it. There are various definitions for supply chain but in general, supply chain is described as the system by which organisations source, make and deliver their

products or services according to market demand. It includes not only manufactures and suppliers but also its transport companies, warehouses, retailers and customers. The Supply Chain Management (SCM) is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customers. 2.2. The supply chain management of Li & Fung In a typical supply chain, the company purchase raw materials from one or more suppliers. Parts, details or even products are produced in one or several factories, then shipped to the warehouse for storage at the intermediate stage and finally to retailers and customers. Therefore, to reduce costs and improve the level of services, effective supply chain strategies must be considered the relative works at different levels in the supply chain. Supply chain is also known as logistic network including suppliers, manufacturing centres, warehouses, distribution centres and retail stores as well as raw material inventory during production and moving finished products between bases. In Li & Fung, supply chain model is applied and changed appropriately in each stage of development and becoming supply- chain customizing. The following is the evolution of the supply chain management of Li & Fung:

In this model, the company has been managing a complicated and creative supply chain. From representatives of sourcing, Li & Fung has become a manager (on behalf of clients) and made the production plan. Before customer needs, the company has to participate in designing as well as developing products. Besides, the company still must monitor the suppliers commitment and at that time, it also implementation plans for raw material and factory sourcing. The next step of the supply chain is manufacturing control. It is supposed to increase the complexity of supply chain but this brings higher value to customers. Finally, the distribution stage will end the supply chain management of Li & Fung.

2.3. Influences of technology on the Supply Chain The impact of technology on the economy in general and the trading in particular is very great. SCM is concerned with the flow of products and information between members of supply chain management. Thus, appearing Internet and e-commerce models creates expectation that many issues of the supply chain will be resolved by using technology. In other words, it brings many advantages in managing the supply chain. Knowing this feature, Li &

Fung has leveraged effectively the functions of technology in the supply chains activities by applying new programs. *The intranet introduction In 1995, Li & Fung launched the intranet to accelerate and simplify internal communications. This allowed the Group to connect with its many offices, manufacturing sites around the world. As a result, that made favourable conditions in understanding consumer needs as well as designing products- the first steps of Li & Fungs supply chain: teams of product specialists focused on the needs of specific customers and were grouped under Li & Fung corporate umbrella that provided centralized IT. Through email, online images or links and so on, the supply chain constantly improved by adding value services to customers. This is seemed to be a strategic stage in developing Li & Fung perfect supply chain as the company has changed role of the trading company: from sourcing to borderless manufacturing. For instance, with a jacket made in Hong Kong, a down filling might come from China, the outer shell fabric from Korea, the zippers from Japan,and other trim from Hong Kong. With 48 offices in 32 countries, only intranet may do such this. Also by this system, the company easily monitored whether the progress of orders and shipments could be tracked in real time or not; the online inspection and troubleshooting would be shown by high- resolution digital photos. Therefore, incurred issues would be addressed in a timely manner and the schedule of orders was still ensured. For example, in the past, when quality problems with Bangladeshi production happened, the onsite Li & Fung inspector was asked to send physical samples to Hong Kong by express mail. If this situation had occurred with more than one client, it would have affected the companys costs. But with the introduction of intranet, these issues were dealt with flexibly. Clearly, technology has speeded processing of information exchange between offices in the world and on that basic, the supply chain has run more smoothly.

*The secure extranet sites. In 1997, Li & Fung continuously launched secure extranet sites. For this new program, the company was linked directly to a key customer and customized to customers individual needs. Firstly, the company could carry out online product development and order tracking while clients observed as well as checked their products in detail. That meant when there were any problems with the products, the company and customer could find solutions quickly by contacting across Internet site. Changes would be made online instead of sending hard copies of documents back and forth. This helped the company save necessary costs and times and ensure progress of supply chain. Thus, in a certain aspect, extranet sites made the supply chain run more seamlessly and effectively. Furthermore, Li & Fung is considered as the key link between manufactures and retailers. With this role, extranet created streamlining communications when connecting two important elements of the value chain and this was one of factors making success for Li & Fungs supply chain. Just as customers tracked a UPS delivery, clients could track an order online with the monitoring of production. That promoted quick-response manufacturing by changing immediately customer demands if they wanted. Until the fabric was dyed, the customer could change the colour; until the fabric was cut, the customer could change the styles or sizes offered, whether a pocket or a cuff would be added, and a number of other product specifications. Li & Fung turned back the value chain effectively to suit most customer requirements but still facilitated its supply chain. Due to technology, receiving information was updated and treated in the fastest way. *Applying e-commerce through B2B portal

E-commerce understood simply is associated with the buying and the selling of consumer products over the Internet (Thanasankit, 2003). Nowadays, it is used as one of popular strategies for development of the organisation. Especially, in managing supply chain, it plays an important role in facilitating the supply chains operations. After venturing with Castling and implementing Bubble in, Li& Fung decided to reach SME market in the United States through B2B portal. This application is simply one organisation buying products and service from another, intermediately by technology (J. Botha, 2004) but with Li & Fung, it is the great tool to wide and complete the supply chain. Researching SMEs in USA, Li & Fung realized that SMEs usually lacked current information and in comparison to larger retailers, they lagged in identifying fashion trends. Because orders of SME were small and in the lack of economies scale, they had to pay high margins for importers. Moreover, they were not concerned by suppliers and offered a limited range of options in product specifications. But everything would change via B2B portal of Li & Fung. First it provided the convenient order process. Li & Fung offered an array of products with customization option to clients. For example, for polo shirt on lifung.com, the users could choose limited specifications like pockets, collars, buttonand ordered online if satisfied. Li & Fung provided the supporting program system as: Microsystem, Broadvision, Oracle With orders below factory minimums, the company aggregated small orders and did not require a minimum order. That helped SMEs reduce the inventory levels- the origin of all risks. When market trends changed, clients could use the replenishment buying system. Especially, to ensure the supply chain customization and innovation, Li & Fung limited mass customization- which allowed customers to collaborate in designing the products or services they buy (Chakrawarty & Eliashberg, 2005).

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By using B2B e-commerce portal with SMEs, Li & Fung helped SMEs manage effectively stages of the supply chain. Clearly, the technology has brought great changes to organisations operating in the field of the supply chain management. For Li & Fung, the company not only well organizes the supply chain but also take it to its customers. That is the underlying value and the spread of the information technology.

3. Critical evaluation for Bubble in and Turnkey solutions.

Turnkey solution is a very popular solution particularly in e-commerce. It provides specialty service and tools while allowing you to control your content at a significant cost and time savings (Thomas M. Elliott, 2008). In other words, it could maximize the efficiency of online business, so it is one of the most effective tools on the market. Nowadays, e-commerce has become one of the most important strategies of the organisation. It is a great combination between information technology and business operations of the business. However, not all companies have a system of modern information technology while demands for it are high. This situation creates the company that specializes in providing IT for the business. For instance, they would help their customers design website, advertise online products, distribute products as well as provide online payment methods. Because of this, the IT company could know the business activities of customers and important information. Therefore, choosing the right provider is very important. They must have good business ethic and practices to ensure

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customers transactions, especially payment transactions. Summary, when the organisation chooses turnkey solution, they must use sources from outside. Contrast to turnkey solutions, Bubble in is a concept given by Li & Fung after the company decided to use the e-commerce strategy. According Victor, I should come from within of the company, not outsourced. That means the organisation does not seek out the provider but they would become provider for themselves. But the problem is given: how to turn a global export trading company into an information technology company and use the existing IT department or a new team. And Bubble in of Li & Fung was implemented through participating on a new IT venture. Clearly, there are deeply differences between two concepts. With companies using outsourcing e-commerce or turnkey solutions, they must face with many difficulties as well as disadvantages from outsource providers. For Hsieh, this is considered as putting the fox in the chicken coop. First it leads to reject communications between the company and its customers. That would affect directly to stable relationship that the company wants to build with its clients. Then, it creates risks dependency on outsiders. For example, the project is suddenly delayed for some reasons or products need to be changed. This may be beyond the control of the provider but accidentally, it makes the company dependent on the outsource provider. Moreover, the turnkey solution the company could be at risk of disclosing proprietary information, business strategy. In addition, many Internet companies may acquire offline competitors or old-economy trading companies. As a result, the company has coped with more competitors. How about Bubble in? The answer is what the company worry about outsourcing e-commerce would not exist in Bubble in. The information technology is developed from inside of the company, so it belongs to the company. The company does not depend on anyone and apply IT for business
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activities by itself. Besides abundant human resources, the company also makes use of human resources from the venture. As in the case of Li & Fung, after entering Castling, Castling committed key managerial staff to lifung.com. Then, 20% of lifung.coms initial staff was come from Castling and most of them are experienced in implementing e-commerce strategy. It can be said with Bubble in, the company has turned what not owned by it into its and always hold the initiative. It is easy to see that, with Bubble in, the company will never to bear the risk by the third party. If so, that is the risk generated from the IT such as: virus, hacker Summary, Bubble in is a smart and effective solution for the e-commerce strategy. It creates the security, safety as well as independences for the company. Bubble in also shows that the information technology plays an important in developing the corporation.

4. The security issue in implementing the ecommerce system

4.1. Security issues of the e-commerce system. The e-commerce is a business proving high efficiency for the organisation but including potential risks. Hence, when using e- commerce, the organisation should concern some security issues as the following:

Security of transaction: in commercial transactions in general and ecommerce transactions in particular, ensuring absolutely confidentiality of transaction is most important. Otherwise, the company may face risks such as: eavesdropping, forgery, impersonation or apparent origin

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To ensure the confidentiality of transaction, the company could use measures like: data encryption, electronic signatures, digital envelope.

Check the correctness and authenticity of the information in transactions: the online transaction is borderless and parties do not see each other. Thus, after receiving the information, users should check the correctness and genuineness of the information.

Place data storage by various forms: to prevent the risk due to natural disaster incidents or acts of terrorism, the data of e- commerce is stored in many places with many forms. That makes the safety and continuity of business operation online.

Install anti-virus software: viruses are always threats to enterprise network. The destruction of the virus is unable to measure. When installing on the system, it will destroy the database of the enterprise stored in the computer or steal the information and transfer them to the virus sender. Therefore, to combat the attack of virus, businesses need to install effective anti-virus software.

4.2. Applying security issues to Li & Fung Like any organisation using the e-commerce system in the world, Li & Fung always must face with security issues being as an integral part of the information technology. To protect the benefits of users as well as the company from risks, hackers, intruders, Li & Fung should examine some suggestions:

The company should have a mechanism for the distributed database

This is kind of data having the similar information and relating to each other. Li & Fung should have different ways to control them instead of managing them by the only policy. It makes sure that if one of them is attacked, the rest still operate normally and is not affected by others.

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Li & Fung must use the effective protecting software, especially gateway internet

Li & Fung is the global company so the data system is very huge. To prevent hackers or intruders from unauthorized accessing, the company have to put software as firewall. Moreover, the company also use the best antivirus software and update them regularly.

The company have to enhance awareness for staffs

At first listen, this hint does not seem reasonable but it is really essential. Many hackers have stolen information by losing awareness of information technology. That even happens to many famous technology companies and it is one of ways hackers often use.

CONCLUSION
From an export trading company, Li & Fung has become a global export trading company and famous for the supply chain management. That is because the company has used a reasonable strategy especially strategy relating to the development of information technology. Li & Fung also know that technological advances have allowed business to take advantage of growing market opportunities (Sloman. J, 2005). The companies have continuously applied new software to serve businesses as well as complete the supply chain. Therefore, the management of Li & Fung decided the technology should come within the company. This concept leads goals of Li & Fung in the following years. It is can be said, Li & Fung is the typical company in applying MIS successfully.

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REFERENCE
1. Chaffey. D & Wood. S., (2005) Business Information Management: Improving Performance using Information Systems. England: Marketing Insights Limited and Steve Wood. 2. Elliott. G., (2004) Global Business: Information Technology. England: Pearson Education limited. 3. Lucey. T., (ed.) (2005) Managing Information Systems. London:

Thompson 4. 5. Botha. J., (2004) E-commerce. Republic of South Africa. Thanasakit. T., (2003) E-commerce and Culture Values. USA: Idea Group Publishing. 6. Chakravarty. A & Eliashberg. J., ( 2005) Managing Business Interfaces: Marketing and Engineering Issues in The Supply Chain and Internet Domains. Germany: ISQM 7. Elliott. T., (2008) Website 411: Business Survival in the Internet Economy. USA: Infinity. 8. Sloman. J., (2005) The Economic Environment of Business. England: Pearson Education Limited. 9. 10. Harvard Business Review, 01 October 2002. Palmer. A & Hartley. B., (ed.) (2002) The business environment. Berkshire: Mc Graw- Hill education

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