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    OPN602 Assignment 2

    Uploaded by

    Arpita Mouli Mustafi
    Kurlon's supply chain faces problems due to seasonal fluctuations in raw material supply and prices. Competition is increasing, requiring lower costs and a variety product range. Analysis of sales data for a mattress SKU found skewed monthly patterns, likely due to Kurlon dumping excess inventory with retailers at month's end. Inventory management and production planning processes need improvement. Recommendations include better forecasting, supply chain performance management, integrated IT systems, coordinated sourcing based on price trends, and cross-functional coordination to address Kurlon's supply chain issues.

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    OPN602 Assignment 2

    Uploaded by

    Arpita Mouli Mustafi
    31 views4 pages
    Kurlon's supply chain faces problems due to seasonal fluctuations in raw material supply and prices. Competition is increasing, requiring lower costs and a variety product range. Analysis of sales data for a mattress SKU found skewed monthly patterns, likely due to Kurlon dumping excess inventory with retailers at month's end. Inventory management and production planning processes need improvement. Recommendations include better forecasting, supply chain performance management, integrated IT systems, coordinated sourcing based on price trends, and cross-functional coordination to address Kurlon's supply chain issues.

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    OPN602 Assignment 2

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    Kurlon's supply chain faces problems due to seasonal fluctuations in raw material supply and prices. Competition is increasing, requiring lower costs and a variety product range. Analysis of sales data for a mattress SKU found skewed monthly patterns, likely due to Kurlon dumping excess inventory with retailers at month's end. Inventory management and production planning processes need improvement. Recommendations include better forecasting, supply chain performance management, integrated IT systems, coordinated sourcing based on price trends, and cross-functional coordination to address Kurlon's supply chain issues.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    31 views4 pages

    OPN602 Assignment 2

    Uploaded by

    Arpita Mouli Mustafi
    Kurlon's supply chain faces problems due to seasonal fluctuations in raw material supply and prices. Competition is increasing, requiring lower costs and a variety product range. Analysis of sales data for a mattress SKU found skewed monthly patterns, likely due to Kurlon dumping excess inventory with retailers at month's end. Inventory management and production planning processes need improvement. Recommendations include better forecasting, supply chain performance management, integrated IT systems, coordinated sourcing based on price trends, and cross-functional coordination to address Kurlon's supply chain issues.

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    © All Rights Reserved
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    of 4

    Assignment 2

    OPN602
    Arpita Mustafi
    ID: 17364015
    Sec: 01
    Q1. Evaluate the performance of Kurlon supply chain and the causes of the problem faced by
    Kurlon?
    Ans:
     Firm performance in 1997, inventories and receivables were Rs 390.6 million out of a total
    asset base of Rs 624.5 million and total income of 1.12 billion. The PAT, Rs 40.1 million
    in that year, could be substantially improved by reducing the current assets in inventories
    and receivables.
     Problem in the supply chain is the fluctuation in the coir production owing to seasonality
    in coconut husk supply and fluctuation of the latex price as the price changes by around
    12% in 1 month.
     Competition in the Indian domestic market is heating up and the success of a firm would
    be measured by how it was providing a high variety of products at low cost.

    Q2. Evalute the performance of the Delhi area office on the supply chain dimension? For your
    analysis you may like to focus on SDL 72*35*4.
    Ans:
    Analysis for one specific SKU (72 * 35 * 4):
    The sales data shows interesting pattern:
     Week 28 represents Diwali.
     Skewed sales pattern: Last week accounts for about 62% of sales.
     Unlikely that sales pattern at retailers show similar patterns (high skew at month end). Very
    likely that Kurlon is dumping products with retailers at month end resulting in high
    receivables and low sales in first week of the month.

    Analysis of supply chain planning:


     Forecasting capability at region is quite poor.
     Inventory management is not proper and, in general, Delhi stock points keep significantly
    higher stocks.
     Analysis of data would shows that Kurlon needs to improve processes in the area of
    production planning and dispatch planning.
    Weekly receipts using the material flow balance equation:

    SDL (72*35*4)
    Period Indent sales Operating stock Receipt
    1 210 0 404 0
    2 90 68 404 330
    April
    3 90 180 666 108
    4 30 402 594 78
    5 330 56 270 306
    6 480 235 520 822
    May
    7 300 213 1107 126
    8 150 508 1020 294
    9 150 6 806 150
    10 0 55 650 0
    June
    11 0 249 895 0
    12 0 646 646 0
    13 450 24 0 318
    14 300 73 294 330
    July
    15 330 140 551 582
    16 150 569 993 0
    17 60 12 424 474
    18 330 28 886 228
    August
    19 300 136 1086 0
    20 0 631 950 6
    21 48 0 325 328
    22 480 18 653 210
    September
    23 300 150 845 384
    24 0 436 1079 6
    25 36 0 649 240
    26 2370 294 889 1068
    October
    27 270 544 1663 1662
    28 270 1198 2781

    Q3. What is your evaluation of company’s planning processes?

    Ans:
    Though this is not the focus of the case, one can identify vulcanizing or quilting as the bottleneck
    processes, depending on the likely product mix.

     We can examine the impact of skewed sales pattern on production planning.


     We can examine the role of annual planning to take care of peak sales during Diwali.
    Q4. What specific actions do you recommend to Narendra Kudva to address the supply chain
    performance problems?
    Ans:
     Improper forecasting mechanism at regions: Kurlon can explore possibility of designing
    better forecasting models.
     Kurlon should put in place supply chain performance management system.
     Ad-hoc inventory policies followed, owing to pressures at the retailer end, push strategy,
    improper understanding of the demand and various uncertainties at different stages.
     A substantial amount of skewness is caused internally owing to the push strategy: Inventory
    norms to be defined. Focus on supply chain integration with retailers.
     Order placements are through costly means such as telephone and fax. There is lack of an
    integrated IT strategy. Design appropriate IT strategy.
     Purchase department orders raw materials in huge quantities owing to anticipated price
    fluctuation. This leads to high stock-piling. Kurlon should keep monitoring price trends
    and based on recent price trends use appropriate sourcing strategy.
     Too much importance given to economies of scale in transportation. Focus on total cost.
     Poor coordination between various functions.

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