1. Introduction Hartalega Holdings Berhad is a gloves manufacturer and began their business with the vision of produce gloves that protect life (Hartalega, 2013). Hartalega has experienced tremendous growth in the market and there are many issues and problems that faced by them. The first issue that faced by Hartalega is fluctuation of US dollar (CIMB Research Report, 2011). USA is a key market for glove industry and has contributing part of the market share of Malaysian industries. Fluctuation on US dollar has affected the margins of the company.
Besides, the economic conditions have influence the glove industry will continue to be unstable due to rises in material and production costs. Moreover, high latex price also is one of the issue that faced by Hartalega (CIMB Research Report, 2011). Latex prices continue to be volatile would bring an effect to its margin. Supply of latex may be reduced due to the weather conditions. During the dry season in Thailand and Malaysia, it would decrease the production of latex. Thus, price of latex during dry season will be slightly higher compare to other season.
Furthermore, Hartalega faced the issue about labor. The recent governments policies about foreign labor have cause a great concern for the gloves industry. The gloves industry has voiced out their concerns towards this issue because hired labor would have an impact on the manufacturers’ costs. Besides, more and more glove manufacturers are using automation and it will decrease the reliance on manpower. Next, pollution is one of the most important issues that faced by Hartalega as their company’s reputation has affected by the negative news or rumours.
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Hartalega was received complaints from the Deputy Minister in the Prime Minister’s Dept and a few residents of Taman Suria and claim that they are causing air and water pollution. Hartalega deny all the accusation and declare that they are operating legally according to the Malaysian environment regulatory standard (“Hartalega: Aggrieved At Accusations”, 2010). This might affect the reputation and the creditworthiness of Hartalega and might cause the market share decrease in this particular time frame. 2. Remote Environment
Remote environment is the factors that affect a form of decision making abilities, but are beyond its control. Political, economic, social, technological and ecological factor are the factors that include in the remote environment. The first factor is political factor. Hartalega has exports almost all of their products mainly to the developed countries such as USA, Brazil, Japan, Germany, Europe, Malaysia and others. Hartalega also has expanded its business successfully to China and India. Gloves sales have increase but a little drop in the selling prices. Major output of the company is made up by nitrile gloves.
The total costs of the gloves increases due to the high output and increase in labor costs. Besides, the recent governments policies about foreign labor have cause a great concern for the industry. Hartalega have to adjust the wage structure of their workers due to the minimum wage ruling that effective from January 2013 that regulate by the government. Stringent government regulatory also is the threat for Hartalega. There are many government regulations and policies need to be follow by the company such as minimum wage legislation, guidelines on buffer zones and more.
If companies fail to follow or break the rule that enforce by government, it may bring them into trouble, such as they might receive penalty from the government. Next is economic factor. Fluctuation of US dollar, raw materials prices increase and fuel costs rising has bring an impact towards the gloves industry with challenging economic conditions (Hartalega, 2013). Fluctuation on US dollar has affected the margins of the company. The nitrile gloves have experienced declining its margins due to high raw materials price and face competition with their competitors.
Furthermore, demand for nitrile gloves have not affected by economic crisis and slowdown because it is a recession proof products and an essential thing in the healthcare sector. Hartalega expects the demand for nitrile gloves will maintain positive growth in the future and continue export to the other countries such as Europe, China and India. In economic factor, Hartalega might face the threat of high latex price. Latex prices change irregularly would create a threat to its margin. Supply of latex may be reduced due to the weather conditions as well as measures to support rubber prices by Thailand and Malaysia.
The dry season in Thailand and Malaysia would decrease the production of latex. Thus, price of latex during dry season will be slightly higher compare to other season. In the social factor, the annual report of Hartalega has show that Hartalega has enjoy the 100% market share in Victoria, Australia because all public hospitals in this state only used Hartalega’s gloves. Global hospital supplies market also is one of the opportunities for Hartalega. People wearing gloves in the hospital help to prevent spread of germs and help to protect both medical staff and patients from infection.
Hence, it also shows that Hartalega has a big opportunity to growth in this area. Hartalega can offer top quality and great selection of gloves to the hospitals or other industry, so that more and more people from all around the world can choose and use Hartalega’s gloves. Opportunity that can be found in this factor is industry recognition. Industry recognition defines as the degree of public awareness for the brand or products. Hartalega has put many efforts in innovation, quality, R&D and good manufacturing.
Thus, Hartalega has the opportunity to gain more recognition from all around the world as the company continually expands its business to more nations. Furthermore, technological factor is also one of the factors that affect a decision making abilities of the company. Advancements in technology enables Hartalega placed them with a competitive advantage in the glove industry. High efficiency production lines, automated product handling system, glove removal system, process simulator and biomass heat energy plant are the technologies that used by Hartalega (Hartalega, 2013).
High efficiency production lines is the latest high speed production lines in the industry which able to produce 40,000 pieces of gloves per hour. Automated product handling system used to remove defect during transit, packing and storage. RFID tags are tagged in every pallet, so that can monitoring the product movements and make sure the products are on time delivery to the customers. Besides, glove removal system used to decrease the reliance towards the manual workforce. This system also able to remove nitrile and latex gloves quickly from the hand moulds.
Process Simulator enable the company test their imagination in a timely manner and ensure quick delivery of a new product to their customers. The opportunity that found in this factor is advancement of technology. Technology advancement enables the company produce more pieces of gloves in a shorter time and better quality. Besides, automated product handling system that used by Hartalega also enable the company can easily track the location of the products and ensures provides an on time delivery to their customers. Last is ecological factor.
Hartalega has set up a “next generation integrated glove manufacturing complex” (NGC) that contains high technology production lines and mainly involved in the production of rubber gloves (Hartalega, 2013). The project location is landscaped to be green and eco-friendly environment. Moreover, Hartalega has used biomass energy plants to avoid emission of Greenhouse Gases (Hartalega, 2013). Biomass energy plant is the only environmental friendly energy plant in the industry where it burn on the plantation waste to generate heat for the production process.
Hartalega also used effluent water treatment plants to ensure the waste that the company discharge is no harm to the environment. Biomass heat energy plant allowed Hartalega to conduct their business in a more effective way. Negative complaint about pollution could a threat for Hartalega. In year 2010, Hartalega has received complaints from Deputy Minister in the Prime Minister’s Dept and some residents of Taman Suria and claim that they are violate the environmental regulations that set by government. Hartalega deny all the accusation and declare that they are operating legally according to the regulations stated.
Although Hartalega has state that they have independent inspectors and consultants who regularly test water and air emissions to ensure it is always full compliance with the requirements of government, but this also might happen again if they did not provide sufficient information and training that relates to the green environment to their employees. This also might affect the reputation and the creditworthiness of Hartalega and might caused the market share decrease in this particular time frame. 3. Industry Environment Industry environment is the concept to the foreground for the strategic thought and business planning.
This includes Porter 5 Forces that explain the competitiveness of the particular company in the relevant industry. The strategic business manager can use this model or strategy to get a better understanding of the industry context in which the firm involves so that an effective strategy to compete with rival can be developed. There are 5 forces or factors to create the competitiveness of the company which is the threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers and intensity of rivalry.
Threat of the new entrants is the seriousness of the barriers occurred or presented by the existing competitors to the new entrants to enter the relevant industry or market. A high threat of entry means that the new comers are likely to be attracted to the profits of the industry and can enter the market with ease. New entrants enter the market can threaten or decrease the profit gained by the existing competitors which mean high threat of entry will result the industry become more competitive. The glove industry has high threat of entrants as only RM1 million to RM1. millions is needed to start a line (CIMB Research Report, 2007). Cheap labor, low level of technology skills needed and natural gas access as well as the procurement price for latex due to bulk purchase making the barrier of entry high for the new entrants. However, although it is cheap to enter the industry, new comers may not be competitive as they have to differentiate themselves from other existing competitors and need to compete in terms of volume to enjoy the economies of scale. Moreover, threat of substitutes is the availability of product a consumer can purchase instead of the industry’s product.
The availability of close substitute products can make an industry more competitive and decrease the profitability of the particular market. The threat of substitutes for rubber glove industry is relatively low as the industry is dominated by the main 6 players, namely Top Glove, Supermax, Kossan Rubber, Hartalega, Latexx Partners and Adventa. Top Glove is the traditional industry leader but recent research showed that Hartalega has had taking on Top Glove in term of the success on the development of R&D (Research and Design) of Hartalega.
The other reason for the low threat of substitutes is low rubber glove cost and making no incentives for the research house to find other alternatives. The bargaining power of suppliers explains the pressure the suppliers can exert on business by raising prices or reducing the quality of purchased goods and services. Powerful suppliers can squeeze the profitability out of an industry to recover cost increases in its own prices. (Pearce, 2012). The main raw material for rubber glove industry is latex.
The steady easing in the price of latex since April 2011 and currently stable price appeared to be favorable to the glove manufacturers. Top Glove has ventured upstream into rubber plantations to secure a stable latex supply. Meanwhile, Kossan Rubber is concerning on the niche market that might get better margin, Supermax is putting effort on downstream distribution network and Hartalega is creating more values on its innovation technological of the production lines. So, the bargaining power of suppliers might be low as the results of effort that the glove manufacturers have putted.
Furthermore, the bargaining power of buyers refers to the pressure the buyers can exert on business by force down the price, demand higher quality or more services and play competitors off against each other in term of the expense of industry profits. Strong buyers can pressure sellers to lower the prices for the products, improve products’ quality or offer better services. As mentioned just now, the substitutes for the rubber glove is low as the industry is dominated by the main six players. So, the bargaining power of buyer is tentatively low as well.
It is because there is not much alternatives the buyers can choose to purchase. The buyers for glove industry are mainly as doctors or laboratory users. Lastly, intensity of rivalry explains to the extent to which firms within an industry put pressure on other competitors and limit their profit potential. High intensity of rivalry means competitors aggressively other competitors’ target and aggressively pricing products. The industry leader for rubber glove industry is always Top Glove where Hartalega is the world’s largest synthetic glove manufacturer.
There is a high intensity of rivalry in the rubber glove industry. For instance, on the topic of labor costs with respect to the monthly minimum wages to be RM 900 in Peninsular Malaysia and RM800 in Sabah and Sarawak, OSK Research Sdn Bhd. analyst Jerry Lee noted that Top Glove Corporation Bhd. might be the most impacted and Hartalega Holdings Bhd. is the least affected due to its innovation in automating its production lines. On this issue, Top Glove might be affected due to the ineffectiveness of handling the labor issue.
It may affect its image of industry leader. As a conclusion, the threats of new entrants is high, threat of substitutes is low, bargaining power for both suppliers and buyers are low and there is high intensity of rivalry. So, the rubber glove manufacturing industry is attractive and still can earn good profit the 5 forces can be managed well by the relevant firms in the industry. 4. Operating Environment The operating environment describes the conditions, entities, events, and factors that surrounding the organization that will affect the choices and activities.
A firm needs to depend on the operating environment because it will affect the organization in acquiring the needed resources or in term of profitability. The factors are the firm’s competitive position, the composition of its customers, its reputation among suppliers and creditors and its ability to attract qualified employees (Pearce, 2012). A firm’s competitive position explains the position of the particular firm in the relevant industry. It can be the leader industry or just a follower in the industry.
By accessing the competitive position of the firm, the organization able to more accurately forecast both its short and long term growth and its profit potential. Hartalega is the world’s largest synthetic glove manufacturer where Top Glove is the industry leader in rubber glove industry. Although Hartalega is not the industry leader but it acquires sufficient resources and technology in generating more high quality gloves with its new automated production lines and glove removal system. And they are expert and have improved in R&D development.
The high efficiency production lines enable Hartalega to produce 40,000 pieces of gloves per hour per line, the highest among the industry where the glove removal system is capable of removing not only latex but also nitrile gloves up to a speed of 30,000 pieces of gloves per hour. These technologies make Hartalega to become the world’s largest synthetic glove manufacturer. Customer profile is the firm analyzes and identifies what type of the customers that the company served, what kind of customers they have and etc.
The traditional approach of this factor is to segment the customers in term of geographic, demographic, psychographic and buyer behavior information (Pearce, 2012). This can allows the company to know the needs of each segment with ease and then satisfy their needs. The products that Hartalega offer are examination, surgical, laboratory, Clean Room Packed Class 100, Food Grade and so on. They also provide synthetic gloves to latex sensitive users from proteins that may cause allergic reaction.
Basically, the customers that Hartalega served are generally on the international market where Hartalega export their products to overseas to gain high profit. Medline, the largest manufacturer and distributor of healthcare supplies and services in US, is one for the two major customers of Hartalega. The next factor is the firm’s reputation among their suppliers. Firm regularly relies on its suppliers for financial support, services, resources and equipment. It is clearly seen that suppliers play an important role in determining an organization’s success or not.
Hartalega has a strong reputation as the highest quality and lowest cost producer of nitrile gloves has enabled the firm to boost their sales every year. The financial support and resources that can be acquired from their suppliers are significant to the organization itself. Although the raw materials for produce the glove have increased which is latex, but Hartalega still can manage to handle the situation by adjusting the price for the gloves. And the buyers can accept the adjustment in price that Hartalega made.
That means the increase of price in raw material by the suppliers still can be acceptable by Hartalega and their buyers. Moreover, the reputation of the company does affect the reliability for their creditors. If the reputation of the organization is low, then the creditworthiness of the firm might be affected. That mean if the company is currently influence by negative rumors or news, probably the firm’s market share will be affected. Hartalega was affected by negative news which state that Hartalega was causing water and air pollution near Taman Suria, Batang Berjuntai in 2010.
However, Hartalega has successful dismissed allegations of pollution where The Department of Environment (DOE) has claimed that Hartalega is complied with the Malaysian environment regulatory standard. This might affect the reputation and the creditworthiness of Hartalega and might caused the market share decrease in this particular time frame. Other than that, Hartalega Chairman, Kuan Kam Hon claimed that Hartalega recorded revenue of RM931. 1 million, representing a significant 27% jump from RM734. million in the previous financial year while profit after tax increased to RM201. 4 million compared with RM190. 3 million for the last fiscal year. That means the company are currently gaining profit and they are able to implement a dividend policy which pay out minimum of 45% of the Group’s annual net profit as dividends to their shareholers. These few conditions showed that Hartalega are doing well in their business and able to earn profit in the industry. Lastly, the ability of the firm to attract capable employees is one of the components for the operating environment.
The management for the human capital within the organization is vital for the organization to develop competitive advantage so that the organization can compete with their competitors. The organization needs to determine whether their workers or staffs are capable, skillful and experience or not. The more effective the management of human capital, the more easier the firm to achieve success in the industry. Hartalega has implemented a competitive remuneration package to their employees in order to recruit and retain performance centric individuals.
They adopted several training programmes to encourage professional development and develop leadership skills among their employees such as Supervisor Development Programme and Group Leader Apprentice Programme. This programme is to invite talented students to learn the necessary skills and knowledge in manufacturing rubber gloves. The qualified students are able to become permanent workers for Hartalega. 5. Internal Analysis Value chain analysis is to understand how a business creates customer value by examining the contributions of different activities within the business to that value (Pearce II, J.
A. , & Robinson, R. B. , Jr. , 2013). The value chain includes the primary activities and support activities. Primary activities involve inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities involve general administration, human resource management, research, technology, and systems development, and procurement. First is inbound logistics. Hartalega adopted the global supply chain management for their company with the raw materials, components, and parts from all over the world. Latex plays an important in the Hartalega Company.
Research analyst said the latex price rise soon. This situation will affect the Hartalega’s profit decrease. In the operations, Hartalega has high efficiency production lines. Hartalega from a beginning of a one line operation grow into a sizeable company of 43 production lines. They produce over 8 billion gloves annually. Hartalega is the highest speed production line in the industry. They can produce 40,000 pieces of gloves per hour per line. They never decrease the quality of gloves even though they produce the gloves at such high speed.
Their programmable logic controls measured and acquired every critical parameter. It is communicated to the Supervisory Control and Data Acquisition system and later fed to the Data Management System for trending and other analytical auditing. Third is outbound logistics. Customer can buy the product through the internet. Customers can order their products, make request and register to receive materials on some pages. Customers need to fill in their name, address email address and phone number only and submit to the Hartalega, and then Hartalega will deliver the product which is already order by customer to the ustomer. If the customer orders a gift online and they want Hartalega sent it directly to the recipient, customer need to submit the recipient’s address. In the marketing and sales, Hartalega is the largest producer of premium quality nitrile gloves in the world. They have good reputation as produce the nitrile gloves at the highest quality and lowest cost. It helped the Hartalega Company increase their sales during the year under review. Nowadays, many companies do their business in China and India. Hartalega also do their business in China and India.
It is because these countries have high population figures. Demand from existing customers grows and Hartalega also try to attract new customers. Next is service. Hartalega receive some complaint about ammonia gas and chemical waste pollution. The Department of Environment (DOE) already checks the Hartalega’s factory and cleared glove manufacturer Hartalega Holdings of allegation pollution. Selangor DOE director Che Asmah Ibrahim said that Hartalega Holdings has compliance with the rule and regulation and they no need close the factory. General administration or management is one of the supportive activities.
Profit margin of Hartalega has decrease compared with the previous financial year. Although their profit margin decreases, they also maintain the highest margins in the sector globally. Although margins narrowed slightly, it is because of this foresight that we still achieved an absolute increase in our bottom line on year on year basis. Second supportive activity is procurement. Procurement is a part of inbound logistics or purchasing activities. Hartalega adopted the global supply chain management for their company with the raw materials, components, and parts from all over the world.
Global supply chain management help the company compete all over the world and give company a competitive advantage. Company also can lower the supply chain cost if adopt the global supply chain management. Next is human resource management. Hartalega has implemented a competitive remuneration package to their employees in order to recruit and retain performance centric individuals. They also become the number one company for talent, they not only in the glove manufacturing sector but in the manufacturing sector large.
Hartalega has provided several training programmes to encourage professional development and develop leadership skills among their employees such as Supervisor Development Programme and Group Leader Apprentice Programme. This programme is to invite talented students to learn the necessary skills and knowledge in manufacturing rubber gloves. The qualified students are able to become permanent workers for Hartalega. Last is research and development. Hartalega Company is focused on research and development (R&D). They highly focused on research and development because they want to ensure continuous product innovation.
Research and development helps the Hartalega increase the barrier to entry. It is because the characteristics of synthetic nitrile, which needs careful R&D to ensure similar consistency to natural rubber gloves in terms of softness and elasticity. Besides that, R&D also helps the Hartalega successfully reduced raw material usage per unit and do not decrease the product quality. They also have raised the bar with their various inventions and have far surpassed the industry due to their engineering capabilities in their manufacturing processes.
Therefore, Hartalega highly focused on research and development because R&D helps Hartalega to benefit from maintaining the product quality at lower unit production costs, increases the barrier to entry, and the ability to reduce prices without affecting margins. Value chain analysis can helps Hartalega found the strength and weaknesses. First strength from Hartalega is company adopt the global supply chain management and it help the company lower the supply chain cost and give company a competitive advantage. Second is high efficiency production line.
Third is customer can buy the product through the internet. Fourth is good reputation at the highest quality and lowest cost and it helping the Hartalega increase their sales. Next is Hartalega has provided several training programmes to encourage professional development and develop leadership skills among their employees. It helps Hartalega attract new employee and help their existing employee become more talented. Superior success in R&D activities leading to product innovative is strength from Hartalega. On the other hand, Hartalega also have some weaknesses.
First is Hartalega receiving some complaint about ammonia gas and chemical waste pollution. Although Department of Environment said that Hartalega Holdings has compliance with the rule and regulation and they no need close the factory but it also influence the reputation of Hartalega. Another weakness is profit margin of Hartalega has decrease compared with the previous financial year. 6. Strategy Formulation TOWS Martix | Strengths 1. Global supply chain management 2. High efficiency production line 3.
Online purchasing 4. Good reputation 5. Training programmes 6. Strongly R&D| Weaknesses 1. Receive compliant influence reputation 2. Profit margin decrease | Opportunities 1. Industry recognition 2. Global hospital suppliers and industrial laboratory 3. Synthetic glove | a) Strengths- Opportunities (SO) 1. Market development (S3, S4, O2) 2. Product development (S6, O2)| b) Weaknesses-Opportunities (WO) 1. Concentrated growth (W2, O2, O3)| Threats 1.
High latex price 2. Government regulatory 3. High intensity of rivalry | c) Strengths - Threats (ST) 1. Innovation (S6,T3)| d) Weaknesses- Threats (WT) 1. Vertical Integration (W2, T1, T3)| a) Strengths-Opportunities Strategy (SO) SO strategy is using the firm’s internal strengths to take advantage of external opportunities. It is the most favourable situation which allows the firm to faces several environment opportunities and has numerous strengths that encourage pursuit of those opportunities (Pearce & Robinson, 2013). 1.
Market development (S3, S4, O2) Hartalega have a good reputation as produce the nitrile at the highest quality and lowest cost in the world and online purchasing. The main buyers for Hartalega are doctors or laboratory users. Therefore, Hartalega can use their main buyers as one of their company strengths to take advantage to global hospital supplies and industrial laboratory market. Hartalega able to offer the highest quality, lowest cost and at the same time they can provide variety types of gloves to hospitals and industrial laboratory.
Besides that, customers around the world also can easily and convenience to make an order directly for the company website, this is because Hartalega had prepared the online purchasing method for their customer and business partners. These will make more and more hospitals and industrial laboratory around the world recognize and use Hartalega’s gloves. On the other hand, this method can help Hartalega to increase their sales and profit as well. 2. Product development (S6, O2) Hartalega is expert on their research and development (R&D).
Therefore, Hartalega can use this strength to develop more different types of gloves to attract more customers from global hospital supplier and industrial laboratory market. In addition, due to them expert in R&D, they not only focus the needs of the hospital and industrial laboratory, but also can try to satisfy the need for other different customer in order to help Hartalega to increase their market share also. So, they can come out different types of qualities of the product to fulfil different groups of the customers’ need. ) Weaknesses-Opportunity Strategy (WO) WO strategy is to improve company internal weaknesses by taking advantage of external opportunities. A firm faces an impressive market opportunity but is constrained by weak internal resources (Pearce & Robinson. 2013) 1. Concentrated growth (W2, O2, O3) Hartalega can increase their production of synthetic gloves and expand more into global hospital supplier and industrial laboratory market. This is because the costs of raw material to produce synthetic glove is cheaper than latex (Hartalega, 2012).
Therefore, Hartalega can major expansion of synthetic gloves to global hospital supplier and industrial laboratory market will help them substantial cost savings to counter price competition and overcome the profit margin (Hartalega, 2012). So, Hartalega can avoid the high rises of latex price. By avoiding fluctuation of latex price, their profit earned will be more stable and able to increase the profit too. c) Strengths-Threats Strategy (ST) ST strategy is using the firm’s strengths to avoid or reduce the impact of external threats.
A firm that has identified several key strengths faces an unfavorable environment (Pearce & Robinson, 2013). 1. Innovation (S6, T3) As mention on above, R&D is the strength for Hartalega. Therefore, Hartalega can use this strength to create the barrier to entry. R&D can help Hartalega successfully to reduce raw material usage per unit and maintain the product quality and increase the barrier to entry. So, Hartalega can offer the cheaper price to their customer compare with their competitors such as Top Glove.
Hartalega also keep on focusing on their R&D in order to develop more different types of innovation product and try to beat down their competitors and become the leader in the rubber glove industry. d) Weaknesses-Threats Strategy (WT) WT strategy is a defensive tactics aimed at reducing internal weakness and avoid external threats. This is the least favorable situation, with the firm facing major environment threats from a weak resource position (Pearce & Robinson, 2013). 1. Vertical Integration (W2, T1, T3) Nowadays, the price for one of the raw material to produce glove which is latex is keep on rising.
This situation was affected Hartalega’s profit to decrease. Therefore, Hartalega can benchmark other companies’ product and make a comparison on how other competitors performs their product activity effectively. This is useful to Hartalega to improve the management control. The objective of benchmarking is to identify the best practices in performing an activity and learn how to down the costs of the raw material, less defects, or other outcomes related to excellence achieved (Pearce & Robinson, 2013). Hartalega can apply backward vertical integration to control their raw material price.
For example, Hartalega can follow its competitor which is Top gloves has ventured upstream into the rubber plantation to secure a stable latex supply. 7. Recommendation A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. (Riley, 2012) Differentiation is one of the most practical ways in which Hartalega can gain advantage over other competitors in the rubber gloves industry.
Differentiation can be achieved by Hartalega through high quality, efficient low cost manufacturing of gloves. Hartalega is recommend to continuously enhance their flexibility and efficiency in their production process scheduling, saving more time, employees efforts and the company’s money. Besides that, Hartalega needs to ensure all operations from the top to bottom must run efficiently by adopting programmable logic controller able to the monitoring of the operation automatically and promote continuous production that help in increase production and minimize cost.
Hartalega should focus on customers’ satisfaction because it had placed a lot of emphasis in R&D to produce a wide and diversified range of high quality and value-added glove products in order to fulfil the expectation of their customers. The company also collaborates closely with related government agencies and Ministries to keep itself abreast of the latest development in rubber research technology. Hartalega also can uses state-of-art technology and efficient automatic glove manufacturing machine to obtain the highest yield and to remain as one of the most cost-effective and highest quality producer in the industry.
With all these advantages and strategies, Hartalega is able to compete and stand out in the industry. For the Goods and Service Design, Hartalega can print instructions and methods of wearing gloves on the packaging. Besides, Hartalega can focus on detailed product design such as creating innovative glove with functions and amenity features for all type range of gloves use in surgical and clinical practice and operation.
In addition, Hartalega products packaging must provide with its product outlook and description that meet the preferences of their customer across different countries and cultures. Concerning fluctuation price on raw material, Hartalega needs to find multiple sources of raw materials to avoid high fluctuation of cost on raw materials. Therefore, Hartalega is recommended to invest more and expand their own rubber plantation acreage, this would reduce their dependence on raw rubber from other suppliers.
Hartalega has to maintain and enhance its products and operation quality endlessly, therefore, Hartalega always needs to audit their operation and the product quality control to ensure low / no defects in their production based on the Six Sigma and Total Quality Management procedure. On the other hand, Hartalega needs to review foreign countries’ Acceptable Quality Level to improve in their company’s quality management system (Bheda, 2010) Perhaps, Hartalega needs to adopt total quality management or R&D on high quality latex to ensure producing high quality products that meet their customer expectation.
In conclusion, each key analysis and discussion on Hartalega manufacturing operation will help in understanding and makes improvement from each operation processes based on the studies of latest operation management system. With this, Hartalega will be able to maintain or strengthen each of its manufacture’s operation and its products positioning in the world market.
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Hartalega Holdings Berhad Strategic Management. (2017, Feb 22). Retrieved from https://phdessay.com/hartalega-holdings-berhad-strategic-management/
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