Brandname: Ling Nam
Company Name: Ling Nam Medicine Factory (HK) Ltd
Management Function Analysis

The main characteristic of the operation model of this company is the multi-supply-chain approach and this multi-supply-chain is so effective and efficient that it is also made available as a business service to other companies.

To succeed, the company has strengthened its operational systems, that is, it has built up an effective management information system, a flexible and adaptive workforce and flexible human resource tasking system. The strength of these systems allows timely response to supply chain problems, coping with fluctuations in workload, and coping with changing product mix handling.

To gain synergism without unnecessary risk, different legal entities are set up to take up different roles in the multi-supply-chains. This allows that whole system to be buffered from any disturbance arising from what happens to one of the supply chains.

This is a typical case of achieving great economy of scale and therefore financial benefits through internal system efficiency and effectiveness.

Implications for SMEs

The economy of scale as evident in this case can hardly be achieved by SMEs in Hong Kong unless there is a change in mindset over the concept of strategic alliance. Strategic alliance in its different form can help sharing of resources and division of labour. Each SME may take on a specific role in the Value Chain or a role in the Supply Chain and a group of SMEs in strategic alliance relationship would yield the outcome of a large enterprise. What has been lacking in the Hong Kong market is the professional help that plan, organize and engineer such clusters of strategic alliances amongst SMEs and it is definitely an area that the Hong Kong SAR Government would like to start off this initiative with some incentive schemes.