Supply Chain Management

Case Study Analysis of Kurlon Limited (A)

-By Rahul Sathish (1901131)

Facts of the case:

This case highlights the functioning of Kurlon Ltd., its production process and how the managing
director is presented with the task of optimizing the supply chain management of the company.

Kurlon Ltd. manufactures mattresses, pillows and coir mats in India. However 80% of their sales is
from the sales of mattresses.

The mattresses are produced at two manufacturing facilities, Bangalore and Bhubaneswar. The
Bangalore plant caters to the demand of southern, western and northern parts of India while
Bhubaneswar takes care of the eastern region.

Kurlon mattresses comes in three lengths, seven widths and four different brand names. They are
Apsara ( Non quilted, cotton cloth covering), super deluxe (Quilted, cotton cloth covering),
Romantique (Quilted, plain viscous cloth covering) and Klassic (Quilted, printed viscous cloth
covering). The dimensions of all these four brands accounts to 126 configurations. Since furniture
manufacturing in India is an unorganised sector, cots and other furnitures gets manufactured in a
wide variety of sizes. When it comes to production, the Bangalore plant produces about 65% of
Kurlon’s total mattresses output.

The coir mattresses produced by Kurlon consists of an RC pad, a foam layer and a covering cloth. The
production process is as follows:

RC Pad manufacturing:

Kurlon makes RC pads by combining coconut fibre (Coir) and latex in the ratio 3:2. To counter
uncertainities of availability and price, fluctuations of these materials, Kurlon often stocks them.

Operations in RC pad manufacturing: Untwisting, Sheeting, Sheet cutting, Pressing, Vulcanizing,

Cooling and Pad cutting.

Average yield rate of untwisting is 85%. The untwisting, sheeting and cutting operations together
engage 10 workers.

The pressing requires 10 workers in each shift while the vulcanizing and cooling requires 5 workers
per shift. The pad cutting section engages 10 workers per shift.

When it comes to distribution, the finished goods needs to be transported from Bangalore central
warehouse to regional distribution centres. These regional distribution centers (42 spread across the
country) supply the products to about 5000 retailers.
 Analyisis.

1)Evaluate the performance of Kurlon’s supply chain. What are the causes of problems faced by
Kurlon?

Ans. Kurlon has a highly responsive supply chain. It tries to manufacture 126 configurations of a
single product which is distributed into 4 brands. However, when it comes to performance, it is
highly efficient. Kurlon has takes measures to ensure that the wastage is minimal (85% output in
production stages) and also ensures that there are enough personnels for each stage of production.
Kurlon also keeps stock to deal with uncertainties.

In order to reduce the problems faced by Kurlon, they can implement a better forecasting technique.
Better techniques will ensure that the right quantity of products reach the right outlets and hence
the sales can be enhanced .

2) What is your evaluation on the company’s planning process?

Ans. Kurlon’s planning process is not sophisticated but is quite effective. It includes two kinds of
planning. Short term and long term planning.

In the long term planning, the company evaluates the capacity, machinery and the manpower. It
decides whether any modifications are required. It also identifies the demand for Diwali month
(October), which is usually high and thus higher inventory is required at this point.

When it comes to short term planning, this is done every month and is a production scheduling
exercise. This planning is based on orders received for the coming month.

3) What specific actions do you recommend to Narendra Kudwa to address supply chain
performance problems?

Ans. Kurlon could focus on building production plants at more locations. Since there are only two
production plants, the lead time increases significantly and also the transportation charges goes up.
If Kurlon could come up with two more production plants (At locations where raw materials are
available), particularly in western and north regions, they could save up on lot of costs in the long
term. However, setting up a production plant is expensive in its own regard.

Kurlon should also focus on its forecasting techniques. They need to have a forecasting algorithm in
place instead of depending on the sales representatives. This would eliminate the problems of stock
out or piling up of products at several retail outlets. Thus, the revenues would also go up.

Finally, Kurlon could conduct an analysis of the configurations of all the products and find out which
ones are high in demand. They could eliminate the ones which are ordered less frequently and save
up useful time while producing more of the ones in demand.