Lee kum kee : Strengthening Supply Chain Management to Safeguard a Healthy Life

Company Profile
Lee kum kee is a world famous Chinese sauce brand established in 1888, with its headquarters in Hong Kong. As a transnational corporation, it boasts over 4,500 employees. After 127 years of development, Lee kum kee has had more than 220 products, including oyster sauce, soy sauce, chili patse, convenient sauce, XO sauce and so forth. The products has been sold to customers in over 100 countries and regions, including restaurants, dining rooms, food manufacturers and Chinese food lovers of various races.
Challenge
As a key component of food safety and supervision management system, food supply chain is an important carrier of food quality influence factors. With the rapid development of international food trade going on, building a strict supervised food supply chain has become a common concern for transnational corporations and various countries. As a world famous top Chinese sauce brand, Lee kum kee must strictly manage its product supply chain to build a time-honored brand for customers.
Solution
Supply Chain’s Ideological Defender—“100-1=0”
The quality management philosophy of “100-1=0” has led the “strict management and pursuit of excellence” management theory to dominate the building of the responsible supply chain since the beginning of the building. The philosophy helps employees hold the principle of “foresight and no mistake” as well as raise awareness of strict quality control to make sure that every link, from the planting, cultivation and procurement of food ingredients to the production, circulation, processing and distribution of products, meets the highest safety standard.
SAP System Tool—the Software Support for Supply Chain Management
In order to achieve a high-quality supply chain management process, Lee kum kee utilizes SAP system tool to assist to manage the entire supply chain network, share information with suppliers, distributors and consumers and coordinate closely to create a coordinated working environment. Lee kum kee incorporates relevant information into SAP system management, including the supply, production, quality management, procurement management, warehouse management, financial management, and sales management of raw materials, so as to protect the finished products and track their logistics information. In this way, Lee kum kee could realize double track, namely the track from customers to raw materials and the track from raw materials to customers. Lee kum kee conducts food quality safety management and crisis management via SAP system management so that it could realize the quick track from food source to the product delivery, know well the quantity and flow of all the products as soon as possible, ensure food safety and protect consumers’ rights and interests.
Trainings for Suppliers—Qualification Support for Supply Chain Management
Lee kum kee not only strictly selects qualified suppliers but also provides professional training for them with its own advantages so as to inspire and grow with suppliers and promote the supply chain building. Lee kum kee continues to communicate and discuss with suppliers to improve technology skill and process flow, provides training at suppliers’ production line and exchanges expertise and technology to enhance the production technology and management capability of suppliers. Therefore, Lee kum kee’s requirements for product quality could be met in a stricter manner, the stability and yield rate of products could be guaranteed, and the entire supply chain, from farmland to dining table, is able to produce good quality products.
Improved Distribution Environment—an Enhanced Approach for Supply Chain Management
In order to yield more effective results and reduce the operating risks of the supply chain, Lee kum kee adopts a win-win and mutual benefit strategy to get along with distributors, namely listening to their voices, caring about their interests, sharing management experience and market practices with distributors in the fierce market competition and helping distributors improve the sales environment. Lee kum kee helps distributors to improve the inventory management and hires a professional third-party inventory auditing company to assess and guide suppliers’ inventory management, help distributors check the accuracy of inventory data, share excellent inventory cases and help distributors improve the inventory management.
Listening to Consumers’ Voices—Core Objective of Supply Chain Management
Quick response to consumers’ need is the core objective of supply chain management. Therefore, Lee kum kee pays attention to its communication with consumers, explore effective channels to achieve the communication, study the differences of various types of consumers, conducts researches among internet consumers regularly and discovers potential consumption demand. The company provides targeted training on quality for production line employees to constantly raise their production quality awareness, improve relevant links in the supply chain that influence product quality and turn customers’ advices into measures to enhance the quality of supply chain management.
Achievements
Lee kum kee has realized that an orderly-supervised supply chain could achieve whole-process monitor from agricultural products to the dining table and from raw materials to finished products. In addition, it is also an important approach to ensure sustainable management of companies and promote sustainable development of the society.
For the companies, the supply chain management of Lee kum kee has significantly improved their comprehensive benefits. Due to the overall supply chain management, Lee kum kee has produced more than 220 high-quality sauce products sold to over 100 countries and regions. Meanwhile, thanks to the expanding business volume, the companies have become the leaders in the industry, with the market share and profitability increasing year after year.
parties through strict management philosophies, advanced management tools and innovative management approaches and developed model enterprises in the supply chain so that these enterprises could coordinate the relationship between upstream enterprises and downstream enterprises. In this way, the entire supply chain could develop towards a sound and safe direction. Lee kum kee’s supply chain management not only safeguards the interests of stakeholders but also promotes the competitiveness of the industry, which has solved the food safety problem in a deeper sense and greatly promoted the sound and rapid development of the entire industry.
The overall supply chain management has led to excellent product quality, and Lee kum kee has been appointed as the designated food supplier for Beijing Olympic Games and Shanghai World Expo, and provide sauce for Shenzhou-9 Spacecraft and Shenzhou-10 Spacecraft astronauts, which indicates that the quality of Lee kum kee products has reached the highest level in the industry.
Prospect
The overall supply chain management is a strong support for Lee kum kee’s excellent products. As the business volume expands, Lee kum kee has achieved its first mission: “where there are Chinese people, there are Lee kum kee products”. In the future, Lee kum kee will march towards the grand new goal “where there are people, there are Lee kum kee products”, constantly strengthens its supply chain management, accumulates practical experiences and provides good quality products to safeguard people’s healthy life.