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Case Study Kurlon Ltd. Is the largest manufacturer of mattresses, pillow and coir mats in India. The mattresses accounts for about 80% of Kurlon’s
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
Deputy Works Manager,Banglore
Shift Engg.
VP Finance
Deputy Works Manager, Bhubaneswar
VP Marketing
Manager
Assistant Manager
AssistantManager
Assistant Manager
Assistant Manager
Production
Maintenance
Inspection
Dispatch.
Shift superintendent
Shift Supervisor
Assistant Manager
Sales Officer
Workers
.
Page 1 of 5
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)
31-03-96(Rs million)
Source of Fund Net Worth Share Capital Reserves and surplus
70.9
70.9
110.9
90.2
187.7
169.3
44.0
46.9
181.8
150.9
29.2
13.1
624.5
541.3
62.6
59.1
201.7
198.0
27.3
24.2
0.5
2.7
102.8
81.4
189.3
202.6
3.2
0.3
50.1
39.0
6.6
5.3
86.5
61.4
9.2
15.1
238.2
184.1
41.4
32.8
624.5
541.3
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
Total
Source: Prowess
Page 2 of 5
Exhibit 2:Income-expenditure statement
31-03-97(Rs million)
31-03-96(Rs million)
Manufacturing
950.4
871.3
Trading and others
171.8
158.6
557.8
545.5
8.0
5.3
103.3
110.7
Wages and salaries
36.7
30.9
Energy(power and fuel)
19.5
14.2
Other manufacturing expenses
10.8
10.4
Indirect Taxes
7.1
8.9
Repairs and maintenance
8.9
7.1
122.2
93.8
Distribution
89.5
79.3
Miscellaneous expenses
41.1
33.0
Interest
47.4
42.0
Depreciation
21.3
18.3
48.6
30.6
8.5
0.5
40.1
30.1
Income
Expenditure Raw Material Stores and spares Purchase of finished goods
Advertising and marketing
Profit before tax(PBT) Tax Provisions Profit after Tax(PAT)
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?
