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Sean Coxall President of Supply Chain Solutions, Branded Business Digitalization Update

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Page 1: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall President of Supply Chain Solutions, Branded Business

Digitalization Update

Page 2: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 2

LF Digital Platform

Better Entry Point for Partners

Materials

Design Production

Vendor Platform

Materials Platform

Easier Materials Sourcing

Work “Closer to Needlepoint”

Production Platform

3D Design Platform

Quicker Design Iterations

Page 3: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 3

Better Entry Point for Partners

Materials

Design Production

Vendor Platform

Materials Platform

Easier Materials Sourcing

Work “Closer to Needlepoint”

Production Platform

3D Design Platform

Quicker Design Iterations

Page 4: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 4

Materials Marketplace

Page 5: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 5

Materials Marketplace

An online materials portal that allows merchandisers and

vendors to search for innovative new fabrics

Fully curated collections

Detailed specifications enable right quality to be chosen, and

time saving on inquiry

Each mill has an individual showroom to curate and present new

collections, with comprehensive mill profiles showcasing

production capabilities

Page 6: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 6

Materials Marketplace

Pilot Launch Marketplace

Pilot Startedo Fabrico Trendso Searcho Collections

4X suppliers7.5X itemso Fabric & Trimso Trendso Advance searcho Private collectionso 3D ready fabric

13X suppliers25X itemso Buy & sello Consolidateo Track & analyze

Mar 2018Internal process tests

LIVE

Oct 2018Go live with external business partners

Apr 2019On-line transactionsBuy & sell materials

Page 7: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 7

“Materials marketplace enables seamless, reliable, and curated collaboration”

2 3From ANALOG To DIGITAL

Weeks Hours

• Converting physical to digital assets and increasing costing benchmark robustness

• Deepen relationships with mills and trim suppliers• Facilitate more efficient collaboration between

customers, vendors, and LF

The global fabric export market is worth more than $280bn, $7bn of which is sourced through LF…the opportunities for a digital fabric marketplace in Asia is about $157bn (Asia is ~55% of global market)

Materials Platform

Page 8: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 8

Better Entry Point for Partners

Materials

Design Production

Vendor Platform

Materials Platform

Easier Materials Sourcing

Work “Closer to Needlepoint”

Production Platform

3D Design Platform

Quicker Design Iterations

Page 9: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 9

Digital Design Centre of Excellence

Digital Design Centre of

Excellence (CoE)

• Aggregate 3D design tools

• Aggregate 3D design expertise

• Technology and geography agnostic

• Standardised processes, ability to scale

• Estimated 50% reduction in sample effort and costs

Page 10: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 10

Team Formed

1.5X

3.5X

5X

3D Team Evolution

Sep 2017

Jan 2018

Mar 2018

Dec 2018

Page 11: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 11

Simplifying the process for supply chain partnersAn

alog

Dig

ital

Design Concept

Proto Sample 1

Proto Sample 2

Salesman Sample

Fitting Sample 1

Fitting Sample 2

Size Set Sample

Pre-Production Sample

Bulk Approval

Like?

Style Drop

Right First Time Physical Sample

Style Change Iterations

Bulk Approval

Design Concept

Like?

=

Yes Yes

No No

Page 12: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 12

3D Virtual Design

10X 40X 4X 3XResulting in operational improvements of digital product development time savings

More customers

Increase in total number of styles

Faster in 3D design hours

Increase in weekly output per designer

Page 13: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 13

Key Tool: Exclusive Digital PlatformExclusive digital interface to host a single source of truth Review new inspiration and access a digital archive

1W3146 1W3262 1W3315 1W3560

SIMONS

Select from a library of styles and fabrics curated based on market trends and customer brand identities

Easily export developments and past libraries to excel or PDF format for reporting and analysis

Page 14: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 14

Virtual Visual Merchandising

“Digital stores” allow customers to see the range “on the shelves”

Page 15: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 15

Multi-Category Brand

• Multi-category brand with US$5bn+ Revenue

• Brand new customer – able to “get in the door” by providing pure digital services for all categories and brand lines

• Resolved customer pain point of trying to build internal digital PD capabilities

• Following up with new speed sourcing model through Supply Chain Solutions

Case Study

Page 16: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 16

Lifestyle Brand

• Lifestyle brand with US$1bn+ Revenue

• Created new digital collections for e-com applications that were faster and more responsive to market demands

• Digital assets allowed customer to speed up traditional process of product image uploads

• Increased our sourcing business volume with customer by 15%

Case Study

$69.90Slim Plaid Dress Shirt

$69.90Slim Easy Care Shirt

$59.90Slim Striped Button Down Shirt

MEN’S SHIRTS

Page 17: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 17

European Retailer

• European retailer with multi-billion revenue

• Used predictive analytics-driven insights on end-consumer preferences to identify best-selling styles and create new digital collection for instantaneous buy

• Speed to market (from 18 to 13 weeks)• Typical calendar: 18 weeks• Ready-to-buy digital collection within

2 weeks• 13 weeks from kick-off meeting to

in-store delivery

Case Study

Page 18: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

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Footwear

• Virtual sampling service to more than 25 global brands in the past 2 years

• Created over 2000 styles

• Leadtime reduction from sketch to sales sample by over 40%

2D Sketch Digital Sample

e-Com application

Case Study

Page 19: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 19

• Aggregate 3D design tools and expertise• Technology and geography agnostic• Standardised processes, ability to scale• Estimated 50% reduction in sample effort and costs

2-4 1

From ANALOG To DIGITAL

Weeks Day

“Centre of Excellence aggregating technology and geographically agnostic resources to achieve maximum speed and quality of output”

Digital Design Platform

We simplify the product development process for our supply chain partners

Page 20: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 20

Trend Engine

Trend Engine Project (TEP)

TEP scrapes data from various e-Commerce sites and social media platforms.

Through statistical analysis, insights are generated that help validate product selection, product design detail, pricing, and product lifecycle prediction.

Page 21: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

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# Social Events / Festivals # Location-inspired # Product Designs# Influencers

Trend Engine – Social SignalsAnalytical aggregation of trends by image recognition AI

Page 22: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall

Market Pulse

22

Trend Engine – Market PulseSide-by-side comparison of identified trends to online SKU items

# Emerging, Trending & Declining Trends # Validated across sources # Deep-dive Enabled

Page 23: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 23

Trend Engine

More profitable and efficient growth for our supply chain partners

“Quality” orders at larger quantities

Less sampling “guesswork”, less time and effort

Greater product relevance, higher sell throughs for customers

Predictive analytics-driven design insight improves decision making speed and relevance

Page 24: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 24

Better Entry Point for Partners

Materials

Design Production

Vendor Platform

Materials Platform

Easier Materials Sourcing

Work “Closer to Needlepoint”

Production Platform

3D Design Platform

Quicker Design Iterations

Page 25: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 25

Production PlatformWe are creating

Production Platforms in four

geographies

• Drive deeper specialisation in production

• “Closer to needlepoint”

• Fewer layers, faster decisions, better communication

• Tracking and Quality tools

Page 26: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

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• Supports Production-MR reporting

• Intent to standardize key milestones

• Implementation through 2018

• Mobile app also in development

Making it simpler to track WIP

Tracking Tool Overview

Page 27: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 27

the way it was… …the way it should be…

End of Line Inspection Tool

A “physical” pilot concluded in 2017, currently developing mobile app, expected to launch by end 2018

Making End of Line Defect Capture Easier

Page 28: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 28

Remote

Fragmented

and manual

Local

Integrated

collaboration and

data gathering

Production Platforms are about optimizing all production-related work, enabled by technology

• Drive deeper specialisation in production

• “Closer to needlepoint”

• Fewer layers, faster decisions, better communication

• Tracking and Quality tools

From ANALOG To DIGITAL

“Will consolidate information across different businesses providing one integrated platform”

Production Platform

Page 29: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 29

Better Entry Point for Partners

Materials

Design Production

Vendor Platform

Materials Platform

Easier Materials Sourcing

Work “Closer to Needlepoint”

Production Platform

3D Design Platform

Quicker Design Iterations

Page 30: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 30

Vendor Platform

Our vendor platform is a holistic vendor service proposition that combines the other three platforms

MaterialsPlatform

DesignPlatform+ Production

Platform+ Vendor Platform=

Page 31: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 31

A Central Point of Entry to the Vendor Platform

Page 32: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

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• Measure against Target IMUs by Category

• A.I. Enabled Smart Costing

• Manage Multiple RFQs

• Easy Cost Benchmarking

Dynamic Costing

Page 33: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 33

Our vendor platform is a holistic vendor service proposition that combines the other three platforms to deliver value to our customers and supply chain partners

40 13From ANALOG To DIGITAL

Weeks Weeks

• Central entry point for vendors• Value added services and access to information• Digital costing tool• Capacity management tool• Enhanced Vendor Portal

“The fulcrum of our value added services”

Vendor Platform

Page 34: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 34

LF

Dig

ital P

latform

Margin Increase in speed correlated with 30% reduction in Markdowns

From ANALOG To DIGITAL

Speed

LF Digital Platform

Innovation New, differentiated products and flexible speed models

Page 35: AD2018 Digitalization Sean Final - Li & Fung · o Fabric o Trends o Search o Collections 4X suppliers 7.5X items o Fabric & Trims o Trends o Advance search o Private collections o

Sean Coxall 35

• The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without

notice and no representation or warranty express or implied is made as to, and no reliance, should be placed on, the fairness, accuracy,completeness or correctness of the information contained in this presentation. This presentation does not intend to provide, and you may not

rely on this presentation as providing, a complete or comprehensive analysis of the Company�s financial or trading position or prospects.

None of the Company nor any of its respective affiliates, advisors or representatives shall have any liability (in negligence or otherwise)

whatsoever for any loss or damage howsoever arising from any use of this presentation or its contents or otherwise arising in connection withthis presentation.

• This presentation contains projections and forward looking statements that may reflect the Company�s current views with respect to futureevents and financial performance. Readers are cautioned not to place undue reliance on these forward-looking statements which are subject

to various risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,future events or otherwise.

• This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or the provision

of any investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investmentdecision in relation thereto, nor does this presentation constitute a recommendation regarding the securities or financial instruments of the

Company.

Disclaimer