2002 IW Best Plants: Coco-Mat

Sleeping Beauty Mattress-maker Coco-Mat has made social responsibility and intense employee involvement the keys to fast growth and manufacturing excellence. By Tom Mudd Coco-Mat, Xanthi, Greece At A Glance

  • 2001 European Quality award winner, small and medium sized enterprises, the European Foundation for Quality Management
  • 1988 First Place, Ethical Values Industry, Business and the Environment Programme, Cambridge University
  • 300% revenue growth from 1995-2000

When a Coco-Mat delivery van pulls up outside your house to deliver a comfy mattress or a tasteful table, the people making the delivery do something odd: They don burgundy overshoes that look for all the world like bedroom slippers. "It's to keep them from tracking mud into the house," explains Paul Efmorfidis, vice president and co-founder of the family-owned bedding and furniture company. "They wear gloves, too." And all that's assuming the guys bringing your mattress have arrived in a van. Sometimes deliveries from the Coco-Mat headquarters and principal showroom in Kifisia, an Athens suburb, come by horse and cart. It's a surprise to see horses being used by a successful business, but Efmorfidis says that the company has a tendency to use any technology-however old or new -if it helps. And, from a glance at the numbers, it would seem to. Since 1995 total sales have grown 300% to US$7.6 million in 2000. During that same period, Coco-Mat has seen its profitability increase by a massive 754%. "We're very successful," Efmorfidis admits, "but we're more proud of our ethical values. What we're trying to do, in a way, is sell our ideas." In this case, these are ideas that you can sleep on, because Coco-Mat mainly sells mattresses, ranging in price from 252 to 1,056 euros (US$243 to US$1,019). The company has been making the mattresses since 1989, when Paul Efmorfidis and his brother Michael invented a coconut fiber and natural latex mattress and founded the company. The company's principles are based on a commitment to social responsibility. In its manufacturing operations, Coco-Mat produces almost no waste, sometimes through very clever means. Scrap mattress-covering cloth, for one example-is used to stuff old-fashioned rag dolls. And leftover latex from mattress production is shredded and becomes the stuffing of pillows. The raw materials themselves have to be sustainable, Efmorfidis stresses. Coco-Mat uses cotton rather than synthetic cloth to cover the mattresses, while the interiors consist mainly of virgin latex and shredded coconut fibers, which arrive in the factory in great coils from another Coco-Mat facility in Sri Lanka. Also included in the mattresses is seaweed, which Coco-Mat gets pretty much for nothing from the nearby Aegean, and horsehair, both of which are believed by some to have health benefits. Aside from sustainability, Coco-Mat places great emphasis on employee involvement, which it couples with an incentive program that rewards everything from attending TQM seminars to participating in company sporting events. Theoretically, employees can increase their pay by 40% if they check off every item on an incentive list, but Efmorfidis says no one has pulled off that feat yet. "We have a continuous sort of university in our company," says Efmorfidis. "We teach our people things over and over again." Coco-Mat also goes more than the extra mile to hire people with disabilities. In the Athens headquarters, the woman answering the phones has cerebral palsy, and had never worked before starting with the company. She and all the other employees not only work together, but they also vacation together. Their accommodation comes courtesy of the company at a coastal resort called Manor House, which Coco-Mat set up a few years ago. (While intended primarily to be a fringe benefit of working for Coco-Mat, Manor House also turns a small profit, Efmorfidis says.) Pursuing a socially responsible model of doing business has won Coco-Mat praise from the Greek Ministry of Development and the European Union, and won the company first place in Cambridge University's Research, Business & the Environment Programme. But Coco-Mat excels at more than ethical practices and social responsibility, proof of which exists in the company's achievements in the prestigious European Quality Awards competition staged by the European Foundation for Quality Management. Coco-Mat was named a finalist in 2000 and captured the award a year later. Coco-Mat has been able to decrease lead time on class-A purchased materials by 69% during the last five years, while trimming its supplier list from 61 to 42. The company helps its suppliers improve by offering to guide them through such quality-control programs as ISO 9000, with the result that 40% of suppliers have won certification. Efmorfidis says frequent human contact between Coco-Mat executives and suppliers has been vital to managing the company's supply chain. He asks that major suppliers visit him in Greece at least twice a year, and Coco-Mat executives travel to Asia to meet the suppliers twice as often. "Face-to-face talks are important," he says. Just as important is making suppliers feel that they hold a stake in the company and that Coco-Mat values their business relationship. One way of doing that is soliciting suggestions from them on how Coco-Mat can improve its operations. Major suppliers can also visit the Coco-Mat resort for free. Efmorfidis also sees technology as a key to the company's success. The company teamed up with the University of Thrace to help develop a software program that matches mattresses to different body types. The result is that most of Coco-Mat's Greek retail outlets are equipped to measure customers' bodies and send those measurements to the factory with the mattress order. At the factory in Xanthi, a diverse workforce-there are 15 nationalities represented among the 196 employees-turns out the company's products using both state-of-the-art equipment and old-fashioned craftsmanship. Earning 40% more than the average local industrial wage, factory workers range from machine operators to master carpenters, but they all speak with one voice when they talk about working for the company. At times, their enthusiasm for Coco-Mat and its products is almost scary. "I have an Nefeli myself," says one worker, referring to one of the company's top-of-the-line mattresses. "I couldn't sleep on anything else." Production of the mattresses involves a number of processes. There's the manufacturing of springs from steel wire for the traditional mattresses the company manufacturers. After being assembled, each set of springs is sheathed in cotton to eliminate noise. But Efmorfidis insists springs are not ideal for bedding. Instead, he talks up the benefits of mattresses that get their elasticity from coconut fibers and latex. The cores of these mattresses are created by pressing together sheets of fibers that have been sprayed with latex. These are topped with several inches of latex foam manufactured in the plant. First, liquid latex from Asia is processed to achieve 96% purity; next, it goes through a machine that produces the foam. The layers of coconut fiber leaves and foam are then encased in thick cotton cloth. The coconut fiber-latex mattresses cost more to make and are subsequently sold at a 50% premium over spring-based models. All of this goes on in two main facilities within a sprawling industrial park in Xanthi. The addition of a second building at the other side of the industrial park was made necessary, a tour guide explains, by the Efmorfidis brothers' decision to start making furniture. "Those two guys are crazy," the tour guide says, smiling, "but a good kind of crazy."

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Nurturing Employees When a resort on the Aegean Sea became available a few years ago, Coco-Mat snatched it up. The reason, explains vice president and co-founder Paul Efmorfidis, was to give workers at the plant and in the company headquarters a place where they can spend their vacations. That's only one example of the broad array of extras Coco-Mat offers to keep its employees happy. There's also a 12-part incentive plan that rewards employees for learning English or Greek (a majority of the factory workforce consists of immigrants from the former Soviet Union), developing computer skills, not smoking, visiting a nursing home or even planting trees. The company also places an emphasis on continuous training of its workforce, offering each employee an average of 100 hours of formal on-the-job training a year. Don't Keep the Customer Waiting The average seller of furniture in Greece will offer customers a four-hour delivery window, meaning that customers could lose a half-day waiting for their purchases to arrive. Coco-Mat, by contrast, offers a two-hour window and the furniture arrives in the first half-hour of that 120-minute period 65 percent of the time. That record is nothing short of miraculous given the hideous traffic and substandard roads of Athens, but it's still not good enough for logistics manager Nikos Landrovalis, who says he wants customers to get a one-hour window. Learning from Others Coco-Mat's managers travel frequently to attend conferences and conduct benchmarking exercises. During a recent visit to a food company, vice president Paul Efmorfidis "We learned that all these difference processes can be applied in different types of companies," he says. That visit also gave him an opportunity to learn about the challenges of managing a much bigger company. Also, because of Coco-Mat's commitment to sustainability, Efmorfidis and others within the company attend and speak at environmental conferences. "From these," he says, "we sometimes get ideas. But it's also a very good marketing tool, because the people who attend these conferences would be interested in products like ours. But the main reason is to introduce our philosophy."

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