How LF Logistics has successfully become an unassailable force in China and beyond
China is the largest and fastest-growing online market in the world, and LF Logistics has pivoted to ride on this growth bandwagon through its e-logistics services.
From working with just one brand in 2010, LF Logistics now collaborates with over 40 world-renowned multinational brands. This year, the number of orders it will process during Singles’ Day (the equivalent of Black Friday and Cyber Monday) is expected to exceed 8,000,000. Just four years ago, the number was 300,000. At this rate of growth, LF Logistics is well on its way to dominate this all-important market segment.
Guided by its operations-centric philosophy, LF Logistics has built an unparalleled track record of executing an excellent omni-channel strategy for customers, a well-acknowledged point of differentiation against its rivals. Asia is its home court, and it enjoys a superb home-court advantage.
LF Logistics focuses on five key verticals – Footwear & Apparel, FMCG, Food & Beverage, Healthcare, and Electronics. For each vertical, the goal is to become either number one or two in every market it which it competes. Its scalable and repeatable business model allows the company to add a new vertical at the right time and with the right opportunity. Its menu of services includes distribution center management, transport (including first and last-mile delivery), freight forwarding, hubbing and consolidation, order processing, data analytics and other value-added services. LF Logistics runs a full suite of IT services that digitises each facet of our customer’s demand and supply chain.
This global logistics arm of Li & Fung, the world’s leading supply chain solutions partner for brands and retailers, is run by Joseph Phi, President of LF Logistics. With an illustrious career spanning three decades, Phi has nurtured the organisation and guided its evolution every step of the way.
Phi describes his leadership style as embracing both the old and the new.
“In today’s digital world, we must stay relevant by constantly adapting and pivoting, and selectively applying pertinent technology to improve efficiency and effectiveness. Having said this, it is essential that we don’t get carried away by technology,” he says. “We need to take heed of what is driving logistics and what makes it tick in the first place. At the centre of what we do is our people. We must cultivate a sense of compassion, making sure our people feel engaged and stay involved, and that we help them realise their full potential. By juxtaposing people motivation with digital solution, we are able to curate a superb customer experience.”
On the technology front, LF Logistics keeps itself informed of emerging technologies that will make its processes simpler, easier, and quicker, and experiments with them in a practical way to assess the benefits they would offer to the business. Some of the experiments it has conducted include vision picking, operating drones for cycle counting, using smart watches to highlight process bottlenecks, among others. Having said this, Phi is adamant that his business uses technology to enrich the quality of work life of the staff, as well as to enhance service level to customers. It is never technology for technology’s sake.
One area LF Logistics does use heavily is data analytics. “By digitising our processes, we are able to leverage our huge database that allows us to constantly learn from hindsight information and make mid-course adjustments. We are also able to generate business insights to aid in decision making. More importantly, with data, we now can purposefully anticipate and prepare for future business needs with better foresight,” says Phi.
LF Logistics’ culture is driven by its INSPIRE values (Innovation, Nimbleness, Simplicity, Productivity, Initiative, Reliability, Engagement), which aim to cherish employees and what they add to the business, while simultaneously encouraging them to work more effectively.
“I learned many years ago that culture is not something that’s a platitude you can hang on a wall,” says Phi. “It’s not what we say as management, it’s what people are saying about us when we’re not watching. From a management standpoint, we believe the best way to create a culture is for us to behave in a certain way for people to emulate.” This attitude of inspiring the best behavior in others flows from the heart of the business.
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LF Logistics follows an asset-light model. As such, it works closely with warehouse developers, truckers, labor agencies and other vendors when developing a solution for its customers. To forge long-term partnership with the vendor community, it follows the TEAMWORK principle. TEAMWORK stands for Trust, Engagement, Accountability, both sides driving positive Momentum, Win-win situations, Operation-centric, taking Risks, and KPIs. This is the framework used by LF Logistics in building its partnership ecosystem.
“First and foremost, you need to build trust, and for people to trust us, we need to have a sense of humanity. Our customers and partners can count on us during the good times and bad. When things are going well, how can we scale quickly to support their growth? When things are going less well, how do we streamline so we can provide a cost cushion for our customers?
“For the ecosystem to thrive, each member has to be better off by being part of it. This means we need to measure and gauge how well we’re doing as partners,” says Phi. “The challenges are a spectrum, but what’s important is that the partnership is sustainable.”
This all feeds into Phi’s vision of building the model partnership ecosystem that stands the test of time. This in turn helps position LF Logistics as the most admired logistics company in the industry.
Phi quotes a Confucian teaching to underscore the way he runs his business – “Talk to me, and I listen. Show me, and I understand. Involve me, and I’ll make it happen” – and with his leadership and a solid company culture that involves his people, customers and partners, LF Logistics’ sterling growth momentum shall continue way into the future.