Case Study

Kurlon Limited
Group A4

18006 ANURADHA PRADEEP

18032 AMITABH PATHAK
18039 HARSHITA J
18041 MUGDHA JHALDIYAL
18061 SKANDA NARASIMHA M A
18063 SUDARSHAN R N
Background
• Kurlon Limited is the largest manufacturer of mattresses, pillows and
coir mats in India.
• The total sales of Kurlon mattresses accounts for 80 percent.
• Kurlon has approximately 65% share in the branded rubbered coir
mattresses market.
• Kurlon produces mattresses in 126 different configurations.
• Two manufacturing facilities, Bangalore and Bhubaneswar.
• Kurlon mainly used in hospitals, universities, hotels and homes.
• One of the trusted brand leader in India.
 Production Flow

Sheet- Pad-
Untwisting Sheeting Pressing Vulcanizing Cooling
cutting cutting

Tape edging
Cutting and Molding
Quilting Cloth
Foam Making
Fabrication

Bundle Store
Regional distribution centre Retailers
Bangalore
1) Evaluate the performance of the
Kurlon Supply chain.
Particulars 1997 1996
Days of Raw materials 32.78 26.10
Days of Work in Progress 5.23 8.99
Days of Finished goods 37.01 28.48
Length of value chain 75.03 63.56

Supply chain cost 118.66 102.40

Supply chain inefficiency 0.12 0.12

Supply chain working

capital 202.20 149.40
Supply chain working
capital productivity 4.70 5.83
ROA 0.21 0.15
Inventory Turnover Ratio 5.85 6.81
 April May June July August September October
0 56 6 24 12 0 0
68 235 55 73 28 18 294
180 213 249 140 136 150 544
402 508 646 569 631 436 1198
650 1012 956 806 807 604 2036
1300 2024 1912 1612 1614 1208 4072
Chart Title
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4000

3500

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0
April May June July August September October

Exhibit 8a Series1 Series2 Series3 Series4 Series5 Series6

 12000

Chart Title
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0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

No of SKU's Annual sales Source Exhibit 6

It is seen that 56 out of total 126 SKU’s had non zero sales, from which only 37 have accounted for 99% of the
sales. Hence all the product should not have Made to Stock. The other product in the 56 should be made to
order(MTO).For the other 70 SKU’s the production should be stopped or produced only if ordered
3000

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500

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

period weekly sales for 1997-1998

The weekly sales data how’s that at the end of the week the sales are getting high which means that the sales
are target driven. Instead sales should be divided evenly among all the weeks.
 Production
1800

1600

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600

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0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

The production is initially stagnant after which it keeps increasing and decreasing. There is no pattern.
What are the causes of problems
faced by Kurlon?
• In 1997, inventories and receivables were Rs.390.6 million and total was
Rs.624.5 million. The total income is 1.12 billion
• The PAT is Rs.40.1 million which should be improved by reducing the current
assets in inventory and receivable. The inventory turnover ratio is poor and there
is slow movement .
• The cost of supply chain is also increasing which needs to be controlled.
• Fluctuation in the supply chain raw materials(coir) due to the seasonal
availability
• Fluctuation in the price of the raw material(coir) where the price changes by
around 12% in one month.
 2) Evaluate the performance of the Delhi
Area Office on the supply chain
dimensions? Focus on 72*35*4.
Chart Title
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

I S

We can see that there is no relation between sales and indent. This gap is because of the large amountof
transportation time

Exhibit 8a
 S and OS

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

S OS

We can see that the inventory is always greater than sales. This means that company is not managing
inventory properly.
Recommendations: proper forecasting of sales should be done, proper inventory management should be
done
 Chart Title
2,500

2,000

1,500

1,000

500

-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Indent Dispatch OS

Exhibit 8b
Graph No. 1
 Balance
2,000

1,500

1,000

500

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0 5 10 15 20 25 30

(500)

(1,000)

(1,500)

Graph No. 2
 Production
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Graph No. 3
Analysis
• The production is initially stagnant after which it keeps increasing and
decreasing. There is no pattern. (Graph No. 3)

• Also, there is no proper relation between indent, dispatch and OS. This is
a clear sign of mismanagement. Proper forecasting needs to be done.
(Graph No. 1)
• The graph showing the values for balance is erratic. This confirms the
previous statement. (Graph No. 2)
3) What is your evaluation of the
company’s planning process?
• Transportation cost was increasing as they followed a centralized
distribution system.
• There was no formal forecasting Annual planning should take care of
peak sales during the festive season
• The company had 126 configurations out of which one third were only
produced by individual retailer orders
• Plans to increase the machinery and manpower decisions when the
current system is no that efficient.
4) What specific action do you
recommend to Narendra Kudva to address
Supply Chain performance problem?
• In order to reduce storage costs, average days of stock of RC pad and
foam (as work in progress) should be reduced.
• Keep distribution centers in the proximity of retail stores in order to
meet demand.
• It should do proper forecasting to plan the amount necessary to produce
and dispatch. The company should have a more uniform and
uninterrupted production process based on forecast.
• Information system has to be improved.
• The configurations having higher sales should be identified and stocked.
• A proper customer feedback system should be developed to know the
market needs.
Thank You!