Business challenge

Li & Fung needed to ensure its supply chain management solution could scale to handle exponential spikes in transactions during China’s Singles’ Day sales event.

Transformation

The company worked with IBM Services to test and tune its IBM Sterling B2B Integrator solution, ensuring the product could process peak volumes.

Results

Increases transaction capacity to 1.5 million per hour

from 300,000 – 400,000 per hour the previous year

Handles 32% more units year-over-year

to accommodate fast-growing Singles’ Day transaction volumes

Separates clusters designated for internal and external sales

expanding the total number of clusters from two to five

Business challenge story

Huge volumes and a significant slowdown

Singles’ Day means big business in China — as in, really, really big business. Since its origins on college campuses as a day to celebrate single young people, the unofficial holiday (also known as 11/11, since it falls on Nov. 11) has morphed into the biggest shopping event in the world. In 2018, the 24-hour sales extravaganza, primarily spearheaded by multinational ecommerce giant Alibaba, generated sales of USD 30 billion — more than double those of Black Friday and Cyber Monday combined.

During an event in which the majority of sales transactions take less than a second, time truly does equate to money — a key consideration for Li & Fung, the Hong Kong-based supply chain solutions company that oversees logistics for the event. With so much hinging on speed and accuracy, flawless performance becomes imperative.

“In our logistics business, customers count on us for reliability and meeting service levels,” says Manuel Fernandez, Group Chief Technology Officer, Fung Group, “so it's vital that our infrastructure runs smoothly and is scalable. Service excellence is what our customers have come to expect — it’s why they come to us.”

Two components make up the infrastructure the company uses to handle supply chain transactions. According to Fernandez, “We have the warehouse management system, which does the picking, packing and all that side of it, and IBM Sterling B2B Integrator, which handles incoming orders and integrations.” Today both components run on premises and are tightly coupled.

The Sterling B2B Integrator solution is vital to the business throughout the year. “We work with 15,000 suppliers and thousands of customers. Sterling B2B Integrator is the single point through which we do all of our integrations across the supply chain,” says Fernandez. “With Sterling B2B Integrator, we can see all our data flowing through the system, catch a lot of issues and automate processes.

“More recently it's been a very important part of our logistics supply chain, as we are dealing with events like the Alibaba 11/11 event, which we’ve supported for the last six years. And the scope has increased every year.”

That intense level of growth created a problem on Singles’ Day in 2017. The volume of transactions that day was a whopping four times that of the previous year’s event. “We had done testing and were ready for the volume, but not the spike,” says Fernandez. “We hit a snag over the first 12 hours with Sterling B2B Integrator that reduced performance and slowed down incoming orders.

“This was significant as we had to deliver all orders within 2 – 3 days. Luckily, we still were able to meet all our KPIs [key performance indicators] and SLAs [service level agreements], but it prompted us to do a massive amount of testing with our customers and suppliers for the next year.”

Li & Fung’s goal is to create the supply chain of the future to help its customers navigate through the digital economy.

Manuel Fernandez, Group Chief Technology Officer, Fung Group

Transformation story

Tests and tuning to push the limits

Following the 2017 event, the Li & Fung team worked with IBM services and development teams to address the performance issues on multiple fronts, including conducting numerous stress tests internally and with customers.

“We looked at scaling further,” says Fernandez, “and at debugging and improving performance. According to IBM, we’re now pushing the limits of the product, and we're working with them to see how we can grow even more.”

To intensify visibility of usage, real-time loading and overall systems health, as well as to enhance proactive monitoring, the teams built dashboards integrated with Splunk, an analytics and insights platform. They also enlisted IBM L3 support and consultancy services to review and revamp the entire Sterling B2B Integrator platform.

As a result, the two teams generated 48 recommendations for changes to the infrastructure, database and application layers. They separated the computing clusters for inbound and outbound online processes, expanding the number of clusters from two to five. The teams also right-sized system resources, including CPU and RAM, to optimize performance.

Additionally, the Li & Fung and IBM teams adjusted the database pool size and performed database tuning and optimization. And in the application layer, they implemented performance tuning wizards and adjusted business processes and scaling capabilities.

Results story

Scalability and ongoing support for the future

The collaborative efforts paid off. “2018 was much, much better,” says Fernandez. “We did six months’ worth of testing, and over that period we were able to handle more volume than we expected — about 1.5 million transactions an hour through Sterling B2B Integrator, sustained over 6 – 8 hours.

“And this year [2018] when we went into 11/11, we processed quite close to that per hour for a prolonged period — six, seven hours.” In fact, the Sterling B2B Integrator solution processed 12 million inbound and 17 million outbound transactions that day, peaking at 750,000 per hour — almost four times the 3.3 million inbound and 4.6 million outbound processed the previous year, which had peaked at 180,000 per hour.

“We know the product can scale,” says Fernandez, “and now we're looking forward and working with the development team to prepare for next year's event. We believe it's going to be at least four times that volume.”

For companies facing similar issues, Fernandez has this advice: “When you find a product that matches your needs, make sure to test it for scalability. We thought we were covered in that area when we first bought the product, but we never imagined we'd have 400 times the volume in one day than we had when we purchased.

“Stay involved with the product development team,” Fernandez continues. “We were functioning alone for a few years thinking everything was fine. When we got into a bit of trouble with scaling and worked with the IBM services and development teams on tuning, we found we'd probably gone off mark in how we were using the product.”

The company plans to work with IBM on an ongoing basis to add improvements and enhance its ability to handle ever-increasing transaction volumes. “Holistically across all of our businesses, our goal is to create the supply chain of the future,” says Fernandez.  “One thing we're doing right now is digitizing the supply chain.”

Another area Li & Fung is exploring, specifically with the Sterling product, is the addition of cloud and containerization into its infrastructure — possibly with a hybrid cloud solution. “We need to be able to scale up and down as needs arise and to keep current with technology,” says Fernandez. “And that's something that we're seeing happening.”

But the company’s focus isn’t just on quantity of transactions. Now it's their quality and the speed at which they flow through. “It's all about speed on supply chains,” says Fernandez. “The more integration we can do, the easier data should flow. And therefore, product should as well.”

business logo

About Li & Fung Limited

Li & Fung, the Hong Kong-headquartered multinational group, is the world’s leading supply chain solutions partner. With 230 offices across more than 40 economies, Li & Fung specializes in responsibly managing the supply chains of high-volume, time-sensitive goods for leading retailers and brands worldwide. The company’s goal is to create the supply chain of the future to help its customers navigate the digital economy and to improve the lives of a billion people in the supply chain.

Take the next step

To learn more about the IBM solutions featured in this story, please contact your IBM representative or IBM Business Partner.