Case Study Kurlon Ltd. Is the largest manufacturer of mattresses, pillow and coir mats in India.

The mattresses accounts for about 80% of Kurlons total sale. Its mattresses over the years become the trusted brand leader in India. They are mainly used in hospitals, universities, hotels and homes. Kurlon has approximately 65% share in branded rubberized coir mattresses market. It produces mattresses in 126 different configurations. The mattresses are produced in two different facilities, Bangalore and Bhubaneswar. The Bangalore plant caters the demands of southern, western and northern part of India. The Bhubaneswar plant caters the demand of eastern part of India. Kurlon has pioneered most of the product innovation in mattresses in the Indian market. For example, Kurlon is the first mattresses manufacturer to introduce quilting, which improved the aesthetic appeal of mattresses significantly .The firm follows a traditional organizational structure. A Vice President (VP) heads each important functional area. Kurlon employs 500 people, in the executive and worker level. The organizational structure is as shown below
Chairman

President & CEO

VP Production

VP Finance

VP Marketing

Deputy Works Manager,Banglore

Deputy Works Manager, Bhubaneswar

Manager

Assistant Manager Production

Assistant Manager Maintenance

Assistant Manager Inspection

Assistant Manager Dispatch.

Assistant Manager

Shift Engg.

Shift superintendent

Shift Supervisor

Sales Officer

Workers

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Kurlon has witnessed rapid growth in sales and market share in last couple of years. In the previous year, however sales and growth in market share stagnated and net profit had not increased as expected. Following exhibits reflects the performance of Kurlon in Indian mattresses market.

Exhibit 1: Balance Sheet 31-03-97(Rs million) Source of Fund Net Worth Share Capital Reserves and surplus Total borrowings Secured Loans Unsecured Loans Current liabilities & provisions Current Liabilities Provisions Total Employments of Funds Gross fixes assets Land and building Plant and machinery Other fixed assets Capital work-in-progress Less: Cumulative Depreciation Net Fixed assets Investment Inventories Raw material Stores and spares Finished goods Semi-finished goods Receivables Cash and bank balance 50.1 6.6 86.5 9.2 238.2 41.4 39.0 5.3 61.4 15.1 184.1 32.8 62.6 201.7 27.3 0.5 102.8 189.3 3.2 59.1 198.0 24.2 2.7 81.4 202.6 0.3 181.8 29.2 624.5 150.9 13.1 541.3 187.7 44.0 169.3 46.9 70.9 110.9 70.9 90.2 31-03-96(Rs million)

Total

624.5

541.3

Source: Prowess

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Exhibit 2:Income-expenditure statement 31-03-97(Rs million) Income Manufacturing Trading and others Expenditure Raw Material Stores and spares Purchase of finished goods Wages and salaries Energy(power and fuel) Other manufacturing expenses Indirect Taxes Repairs and maintenance Advertising and marketing Distribution Miscellaneous expenses Interest Depreciation Profit before tax(PBT) Tax Provisions Profit after Tax(PAT) 557.8 8.0 103.3 36.7 19.5 10.8 7.1 8.9 122.2 89.5 41.1 47.4 21.3 48.6 8.5 40.1 545.5 5.3 110.7 30.9 14.2 10.4 8.9 7.1 93.8 79.3 33.0 42.0 18.3 30.6 0.5 30.1 950.4 171.8 871.3 158.6 31-03-96(Rs million)

Source: Prowess Questions: a. Evaluate the performance of the Kurlon Supply Chain in terms of efficiency,working capital productivity and length of various stages . b. What are the causes of the problem faced by Kulon? c. Does organizational structure has anything to do with the performance of the supply chain?