The tale of the recession proof rubber gloves

The tale of the recession proof rubber gloves

Top Glove successfully adopts a Web 2.0 collaborative approach to boost its competitiveness and level of service in a shifting economy.

Top Glove, based at Selangor in Malaysa, produces nearly a quarter (23 percent) of the world’s demand for rubber gloves, including latex gloves used for medical examinations and surgery. It is a healthy business given that the world uses 150 billion gloves per annum primarily in the healthcare and food services industries. It has 19 factories spread over Malaysia, Thailand and China and a total of 355 production lines producing 31.5 billion gloves per year. Top Glove products are exported to more than 180 countries and some 850 regular customers.

The enterprise, which started in Malaysia in 1991, starting from one factory with three production lines, now employs some 9,100 staff, including 6,350 in Malaysia, 1,350 in Thailand and 1,400 in China. Total sales revenue for the financial year 2009 (ending 31 August 2009) was RM1.529 trillion (US$453 billion).

The company’s no-nonsense business rules, prominently displayed on its website, are ‘do not lose our shareholders’ money’, ‘do not lose our health’, ‘do not lose our temper; and ‘do not lose our customers’.

Protective barrier

Top Glove CEO, Tan Sri Dato’ Sri Lim Wee Chai, says on the company website that “our vision is to strive to be the world’s leading manufacturer with excellent quality glove products and services that enrich and protect human lives”.

“Gloves are the first line barrier to ensure the protection of healthcare industry users in carrying out their daily work,” Tan Sri Lim said. “With the 11 June 2009 declaration by World Health Organization (WHO) of the pandemic of A(H1N1) influenza, we have to enhance our efficiency and product quality to meet the demand that is growing. Our responsibility is to help control the spread of the influenza by ensuring a good quality glove to bring a sense of security to the healthcare users worldwide.

“With the improvement and stringent healthcare standards around the world, the demand and usage of gloves in protecting humans is a continuous effort,” Tan Sri Lim said. “We hope that as a glove manufacturer, we are able to contribute in this area to upkeep the standard and protection of human lives.”

The Top Glove Group has been pretty recession-proof, because protective latex gloves are basic necessities, particularly in healthcare and food services. The company has been blessed with an estimated 8 – 10 per cent annual growth in demand for gloves globally.

This high demand, primarily from traditional medical markets, has been driven by stringent regulatory standards, the world’s ageing population and the emergence of health threats such as A(H1N1) influenza, SARS and bird flu.

Market share

The Group plans to expand its global market share to 30 per cent by 2012. It has also established a ‘green’ environmentally-friendly philosophy for its Malaysia and Thailand factories, having implemented energy cost-saving measures such as biomass boiler systems.

Top Glove’s two latex concentrate factories in Thailand have recently added nine new centrifuge machines to supply additional latex concentrate in line with the increasing demand.

Top Glove executive director, Puan Sri Tong Siew Bee, said the company needed a system to enable any of its suppliers around the world to give a competitive quotation to factories wherever they are located.

The concept for this project was developed in the beginning of 2009 when the idea of an entire eBusiness suite of products consisting of eSupplier, eCustomer, eHR, eJobs and eClinic, was proposed, to complement Top Glove’s backend ERP system.

“The basic concept was roughly based on a Web 2.0 approach where we wanted to have more interaction with external parties to enhance our service level,” said senior IT manager Kelvin Yong.

“After getting approval from top management, we started in early March 2009, on the development of the first module; eSupplier,” Yong said. “We had three internal IT staff members who did the specifications and ERP integration concept framework. It took about two months to come up with the entire specifications.” The programming work started in May 2009 and was completed in six months, with the roll out of the TG eSupplier online platform in November 2009 and full integration to Top Glove’s in-house backend ERP system.

Key technology vendor products involved in the project included Malaysian enterprise data integration software provider DMF Technologies for TG eSupplier development, Juniper and Checkpoint for the firewall, IBM for IBM Web Server and Malaysia’s P1 for telecommunications.

The TG eSupplier system enables Top Glove to be open for business 24x7. The innovative use of Web 2.0 concepts also captured the judges’ attention in CIO Asia magazine’s prestigious annual awards competition, resulting in one of the five coveted 2010 awards being presented to Top Glove. Yong said the TG eSupplier system was designed in such a manner as to align its IT with the firm’s business direction, while delivering consistent high quality with efficient low costs. “This system improves our global sourcing and procurement activities,” he said and Top Glove thoroughly consulted its suppliers to determine what would work best.

Better competition

“We had many sessions with internal purchasing teams, sent out survey forms to most of our suppliers and also workshop sessions with select participation by our suppliers,” Yong said.

“Suppliers now have the opportunity to quote for any other products within their own line of business even if they have never done so before. Purchasers are able to get better price comparisons, creating better competition. Our purchasers even have the ability to view pricing from other countries, with the option of procuring it, if it is cheaper than sourcing it locally.” CIO Asia

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Tags strategyManufacturingeconomic crisiscustomer focus

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