Logistics and Supply chain

management
Case Study on Kurlon limited

Submitted to
Prof.RajendraTodalb
agi

Submitted by :
Group no. 10 (Section A)
Anshuman 16008
Binka Gowda 16012
Manoj kumar 16023
Nayanashree Herale 16028
Nidhi Padmakumar 16029

KURLON LIMITED

Kurlon is the largest manufacturer of mattresses, pillows and coir mats in India.

The Company was the market leader in rubberized coir mattress market in India
with approximately 65% of market share.

It produces mattresses in 126 different configurations and mattresses alone

accounts for about 80% of companys total sales.

Manufacturing Units

In 1998 Bangalore and Bhubaneshwar

By

20152 Manufacturing Units at Bangalore, 1 at Bhubaneshwar,

Gwalior and Uttaranchal

By 2015 The Company has increased the number of sales offices, dealers and
warehouses in India and have also started exporting their products.

Products

It Produces mattress in 126 configurations.

They have four different brand names

Apsara (non-quilted , cotton cloth covering),(42 configuration each)

Super Deluxe (Quilted , Cotton Cloth Covering),(42 configuration each)

Romantique
each)

Classic (Quilted , Printed Viscose cloth covering) , (21 configuration each)

(Quilted , Plant Viscose cloth covering), (21 configuration

SKU-Wise sales data on annual sales at Delhi ASO:

Top 9 SKUs accounts for 80% of sales

Top 37 SKUs accounts for 99% of sales.

70 SKUs had zero sales.

Section wise data of various

products at Delhi ASO
SKU Wise Data at Delhi ASO

10% 1%
13%

76%

SDL
Apsara
Klassic
Romantiq
ue

Production Process

Coir mattress consists of rc pad, foam layer, covering cloth.

Rc pads and foam - made in-house

Cloth-procured from a cloth mill.

Fabrication - in-house.

RC PAD MANUFACTURING

Coconut fibre and latex combined in the ratio 3:2.

Coconut fibres are soaked in water to make them flexible.

For the reduction of moisture content in the fibre, coir fibres kept in rope form for 80 days.

Operations in Rc Pad manufacturing

Untwisting,sheeting,sheet cutting -computer controlled continuos process.

Pressing, vulcanizing, cooling, pad cutting.

UNTWISTING

Coir ropes placed in coir room.

Moisture content check before untwisting operation.

Moisture content desired- should be less than 15 %.

After untwisting fibres should be atleast six inches, only then it is fed to the next operation.

Average yield rate for untwisting-85%.

Sheeting

Coir fibres are continuously fed to a conveyor in a sheet form of specific width and thickness.

This specified width is the required rc pad length with trim allowance.

During the process a chemical consisting of latex, clay and bonding chemicals is sprayed across the entire
breadth of the pad.

Sprayed sheet passes through a chamber which is heated to 100 deg c.

The chemical permeates in to the coir sheet.

Sheet is flowed at a speed of 5.2 inches per second.

Sheet cutting

Rc sheets are cut in to widths ranging from 62-86 inches.

Outputs to cutting operations are called fleeces.

Computer control ensures that the effective output rates of the sheet cutting and the previous two operations
are balanced.

Pressing

Specific number of fleeces are pressed at a temperature of 120 deg C and pressure of 2.5 bar.

Output is called semi finished composite rc pad.

They could be of three lengths- 75,78,81.

To obtain 2.5 inch thick rc pads, 5 fleeces are pressed and for 3.5 inches, 7 fleeces are pressed.

Pressing time for 2.5 inch pads-27 min, for 3.5 inch pads-31 min.

Vulcanizing

Purpose-make pads elastic and springy.

Pads loaded in a tray which is fed to vulcanizing chamber.

A tray accommodates 18 semi-finished pads.

Vulcanizing operation lasts for 30 minutes.

This operation has the least capacity among the manufacturing operations.

Cooling

Vulcanized pads are cooled before sending to the pad cutting section using overhead fans.

Minimal time taken for this operation.

Pad Cutting

Vulcanized composite Rc pads cut in to different widths in this operation.

Trimming of edges to make the edges smooth and even.

Sheeting and sheet cutting done in a way that the Rc pads have 2 inchtrim allowance on
all the four edges.

Foam making

Ordinary foam sheets-0.5 inch thick, bonded form sheets-1.5 inch thick.

Raw material used is polyurethane granules.

These granules are converted to foam using foam moulding machine.

After 24 hours of curing,form edges are trimmed to get the required foam dimensions.

Set up time is minimal.

Fabrication process:

Two operations quilting and tape edging.

Rc pads and foams shifted manually to fabrication shop first.

On an average items are stocked for approximately three days in the fabrication shop.

Covering cloth comes in bales. Each bale is used to fabricate 150 mattresses.

Models differentiated based on cloth type(cotton/plain viscose/printed viscose).

Price movement of Latex

Price Movement for Latex
70
60
50
40
Price

30
20
10
0

Week

Source: Economic Times Agri-commodity

prices

Process

Mode of operation

Distribution of Kurlon Product is through multi-echelon inventory system.

Two central warehouses are in Bangalore and Bhubaneswar plant.

Bundle store of Bangalore central warehouse is adjacent to the fabrication shop.

Lots size of 160 or 320 mattresses are transferred to the regional warehouses.

Kurlon has long term rate contracts with different transportation such as 14000
for ordinary truck (160 mattresses) and 24000 for jumbo truck (320 mattresses).

Time taken to transport from Bangalore central warehouse to Delhi regional

distribution centre vary from 3-10 days.

Continued..

If certain configurations are not available as per the indent, then some other
configuration is loaded.

Kurlon distribute its products to 42 regional distributors centres across the

country.

Work order is sent by manager of each regional distributors to head office

which is forwarded then to despatch section.

Before the 25th of the previous month, work order is sent, which specifies
both size & variety of the mattress on an weekly basis.

Work order is based on demand forecast for the next month and also stocks
available at the regional warehouse.

There is no formal forecasting involved in finalizing the work orders for

coming month.

Retailers

There are 5000 retailers spread across the country who stock kurlon products.

Kurlon retailers stock other branded mattresses hence kurlon product must
be well stocked.

Frequency of order placement is at weekly basis.

On an average retailers hold 1-2 weeks of stock of fast-moving mattresses.

Average time for replenishing retail order is 1-2 days.

Customisation involves reduction of length and width or reduction of both

from a standard sized mattresses.

Kurlon charges 100 per alteration and takes weeks time to deliver.

Future Plans

Kurlonhas planned to introduce two different types of mattresses in the Indian market.

TheKurlonboard has cleared a proposal of a joint venture company with DUPONT.

DUPONT will provide the know-how for manufacturing core pads with imported fibrefill
using vertical fold technology.

The joint venture company would manufacture these core pads.

Separate manufacturing facilities at Bangalore to handle the manufacture of spring

mattresses as well as the finishing of fibrefill mattresses.

The product range is expected to cross 200 configurations by introducing these new
products.

1.Evaluate the performance of the Kurlon supply chain?

What are the causes of the problems faced by Kurlon?

They are not supplying according to the indents.

They are sending only full truckloads (160 or 320 mattresses). The
material needed for two or more regions never clubbed in one truck
load. It takes 3 to 10 days to reach Delhi Regional Distribution Centre.

There is a mismatch between indents and dispatches.

The company takes one month time to deliver non moving

configuration.

The production schedule is not effective as no proper planning process

is involved.

Causes:

They are not following any proper forecasting techniques.

Some retailers are placing orders for quantity as low as six mattresses.

Too much of focus on economies of sale rather than total costs.

Month
April

May

June

July

August

September

SDL 72*35*4

Opening
Period Indent Dispatch Stock
Production
1
480
120
1956
0
2
366
540
1836
0
3
168
354
1296
0
4
120
120
942
0
5
402
696
822
150
6
774
1284
276
1038
7
552
246
30
264
8
264
372
48
1488
9
462
612
1164
438
10
1050
180
990
432
11
276
564
1242
996
12
288
686
1674
8
13
778
396
996
0
14
498
588
600
396
15
714
1146
408
1638
16
198
90
900
486
17
180
690
1296
726
18
570
522
1332
246
19
564
90
1056
54
20
78
6
1020
0
21
276
630
1014
114
22
762
762
498
468
23
840
636
204
1164

Performance Analysis
Ratio calculation

Formulae

Supply chain wc productivity

swc=inv+account receivables-a/c payables

swc

swcp=net sales/swc

swcp

2015

1997

1996

-48.04

372.42

154.1

-0.8445

3.01326

6.68332

kurlon is having low supply chain working capital productivity instead of having high sc wc productivity.It supposed to increase its
productivity.

Length of sc

DRM

rm*365/crm

dwip

sfg*365/cp

DFG

fg*365/cs

81.62238

93.54815

79.35907

total lenghth of chain

110.247

130.893

113.141

21.23899

32.78326

7.385766

26.09533

4.56188

7.68689

Duration of time taken by the materials flow is minimised. Performance of the company is regarded as good.

Efficiency of scm

SCC

DC+inv*icc

icc( assume)

supply chain inefficiency

scc/ns

18.662

48.38

40.02

0.2

0.02331

0.04311

inefficiency is decreased compared to 1996 &97. efficiency of internal supply chain management is good.

0.03886

2.Evaluate the performance of the Delhi area office on the supply

chain dimension? For your analysis you may like to focus on SDL
72x35x4.

Continued.

SDL 72*35*4 is the top selling model.

We can see that there no or very less relationship

between sales, Indent and Opening Stocks.

The Delhi Area office not receiving the goods

exactly as per the indents placed. We can find a
mismatch between the indents and received
numbers.

The Delhi area office is maintaining huge

inventories without any proper planning.

It looks that they are giving too much of

importance for economies of scale (Truck Loads)

3.What is your evaluation of the companys planning

process?

They do not have following proper Techniques.

Forecasting

Inventory management Techniques

Production Planning

Dispatch planning

Analysis at Regional Level

No proper planning for non standard sizes even though it constitutes about 10-30 percent of total
demand.

No proper safety measures as four fires in the last fifteen years resulted in 2-3 days losses each time.

Some times the stock levels are zero even if there is demand.

4.What

specific actions do you recommend to

Nagendra Kuduva to address supply chain performance
problems?

Purchase new vulcanizing chamber as it was not able to cope with other processes.

The company should have minimum order constraint.

Implement better forecasting tools and better performance measure systems.

Even after keeping excess inventories also, stock outs are very common and sometimes they are
dispatching the products that are not ordered by ASOs. They can classify the products based on ABC
Analysis so that it will reduce excess inventories and cost.

Purchase department orders raw materials in huge quantities owing to anticipated price fluctuation.
This leads to stock piling. They should monitor the price trends and the sourcing strategy should be
based on current prices.

The primary focus should be on total cost. Too much of importance should not be given to economies
of scale.

Thank You!