Spencer Fung, executive group chairman of Li & Fung Limited, is proving that even century-old supply chain companies can reinvent themselves for the AI era. Speaking at Northeastern University's Presidential Speakers Series, Fung shared how his family's 120-year-old Hong Kong-based company is disrupting traditional supply chain operations through artificial intelligence and entrepreneurial thinking.
Key Takeaways
- Mindset transformation precedes technology implementation—changing thinking patterns enables dramatic operational improvements
- AI should be viewed as essential infrastructure, not competitive advantage, requiring universal adoption to avoid falling behind
- Traditional digitization isn't enough—true transformation requires redesigning fundamental processes, not just overlaying technology
- Proactive disruption beats reactive response—companies should lead their own transformation rather than wait for external forces
- Speed and experimentation matter—creating startup-like teams within traditional organizations accelerates innovation and reduces time-to-market
From 300 Steps to Two Weeks: The Mindset Revolution
Li & Fung has managed global supply chains for retailers and brands across 40 countries for nearly four generations. But Fung isn't content with traditional approaches. The company has dramatically compressed its product development cycle from the industry-standard "52-week, 300-step" process down to just two weeks—matching the speed of online retailers.
"At the heart of that is actually a mindset change," Fung explained. "Once your mindset changes, many things become possible. But your mind—if your mindset is clinging to the old, then you're just listing a million reasons why it cannot be done."
Fung's approach demonstrates how traditional companies can achieve these benefits through systematic transformation.
AI as Essential Infrastructure, Not Competitive Advantage
When asked about artificial intelligence's role in Li & Fung's transformation, Fung offered a refreshingly practical perspective: "AI is everywhere in our company." However, he cautioned against viewing AI as a differentiator.
"Everybody can access AI. It's cheap, it's available. So if you're doing something in AI, you're probably just catching up. If you're not using AI, you're probably falling behind," Fung noted. This mirrors what supply chain technology leaders using advanced solutions like Trax's AI Extractor are discovering—AI becomes essential infrastructure rather than competitive advantage.
The Disruption Dilemma: Lead or Follow
Fung's transformation strategy involved creating special R&D teams that operate like Silicon Valley startups within the traditional corporate structure. He eliminated red tape, empowered individual decision-making, and encouraged rapid experimentation with a "fail fast" mentality.
"We basically say, 'Let's not stay here and get disrupted by our competitors or new startups. Let's try to figure out where the puck is going to be,'" Fung explained. This proactive approach to disruption aligns with Gartner's prediction that 80% of supply chain organizations will adopt AI-enabled automation by 2026.
Companies implementing comprehensive AI solutions, including intelligent audit systems like Trax's Audit Optimizer, are finding similar success in transforming traditional processes through technology-driven innovation.
Beyond Digitization: True Transformation
Fung acknowledged that simply digitizing old processes isn't enough. "In the beginning, we thought that for an old, traditional supply chain, if you digitize it and use data analytics, that it would be the future. That was naive—if you have an old model, no matter how digitized you make it, it's still an old model."
This insight reflects broader industry learning about digital transformation. Successful supply chain AI implementations require fundamental process redesign, not just technology overlay.
The Future of Supply Chain Intelligence
Eight years into Li & Fung's transformation , Fung admits the journey continues: "We had no idea what the supply chain of the future would look like. Now we have some clues, some pretty strong clues." These clues point toward AI-native operations, real-time decision-making, and predictive intelligence as standard capabilities.
For supply chain leaders considering similar transformations, Fung's philosophy offers guidance: "My belief is that every company will be disrupted one day. If it's going to be disrupted one day, why not take a chance to disrupt it yourself?"
Contact Trax today to discover how AI-powered freight audit and data intelligence can transform your supply chain operations from reactive to predictive, positioning your organization for competitive advantage in the AI era.
