Lijjat papad - Document Transcript 1. A PROJECT REPORT ON WOMEN’S CO-OPERATIVE SHRI MAHILA GRIHA UDHYOG LIJJAT PAPAD (RECOGNIZED BY KHADI & VILLAGE INDUSTRIES COMMISSION)” SUBMITTED BY Yogin Vora MBA Projects PROJECT GUIDE 2. EXECUTIVE SUMMARY SHRI MAHILA GRIHA UDHYOG LIJJAT PAPAD, popularly known as “Lijjat”, needs no introduction. Lijjat is woman’s organization manufacturing different products of village industries, having its central office at Mumbai. Lijjat is spread all over India. It has 69 centers and 31 divisions in different states. In 1959, Girgaum, Mumbai Shri mahila griha udyog Lijjat Papad made a beginning under the blessing of Shri Chhanganlal Lkaramshi Parekh popularly known as ‘Pujya Chhaganbapa’ who was a member of the servants of India society and a highly successful social worker. In 1996 it was recognized by the khadi & village industries commission under the chairmanship of Pujya Uchhangral N. Dhebar. A deeper insight by the report shows Lijjat’s achievements and services renders to the society and how it has help the Indian economy to grow tremendously in the past few years and in the tears to come. What is the reason for its success? The working of the organization, management future plans. Lijjat is the story of a business house that has created wealth for a nation and the story of pioneers like Pujya Chhaganbapa, Pujya Uchhangral N. Dhebar. 3. Table Of contents SECTION 1 LIJJAT IN GENERAL INTRODUCTION¬ HISTORY¬ THE BEGINNING¬ AWARDS HISTORY¬ SECTION 2 BASIC PRACTICES & PHILOSOPHY BASIC THOUGHT¬ THREE GOLDEN RULES¬ PHILOSOPHY THAT GUDIDES¬ LIJJAT SECTION 3 CULTURE¬ ROLE IN WOMEN EMPOWERMENT¬ 4. SECTION 4 ¬ ORGANISATION STRUCTURE AND MANAGEMENT HOW THE SYSTEM WORKS¬ SECTION 5 PRODUCTION¬ & PACKAGING PROCESS DIVETDIVETRSIFICATIONS¬ SECTION 6 MARKET POSITIONING¬ ANALYSIS¬ SECTION 7 CHALLENGES AND POTENTIAL¬ CONTRIBUTION TO SOCIAL¬ SERVICE PHILOSOPHY¬ 5. SECTION 8 PROBLEMS FACED BY LIJJAT¬ PAPAD &THEIR SOULTION FACTORS FOR SUCCESS¬ SECTION 9 CONCLUSION¬ ¬ BIBLIOGRAPHY. 6. SECTION 1 Introduction Be it an evening snack, or a banquet or a meal at home, The Papad finds its due place on the dining table. No Indian meal is complete without it, and India’s biggest ‘Papad’ success story is Undoubtedly, Lijjat. Everyone enjoys ‘rags to riches’ stories and everyone likes tales of stupendous success achieved through sheer determination. The story of Shri Mahila Griha Udyog Lijjat Papad is all that much more. Shri Mahila Griha Udyog Lijjat Papad, popularly know as “Lijjat”, is an Indian women’s organization manufacturing different Products of village industries. The organization’s registered office is Situated in Mumbai and it has 69 centers and 31 divisions on different states. Lijjat is spread all over Indian. Stared in 1959 with a capital of Rs. 80, Lijjat
today has a Annual turnover of around Rs.315 crore (Rs. 3.15 billion), with Rs.12 In exports and has around 42,000employees. Lijjat is primarily a cottage industry, urban by its origin, that has spread to the rural areas. It is considered as one of the most remarkable enterprenual initiative by woman that is identified with women empowerment in India. Lijjat shows how an organization can infuse Gandhian simplicity in all its activities.7. Shri Mahila Griha Udyog Lijjat Papad is registered under The KVIC Act- (Khadi & Village Industries Commission) The Khadi and village Industries Commission (KVIC) is a statutory organization established in 1956 by an Act of parliament. It plays a pivotal role in the strengthening of rural economy by promoting and developing Khadi and village industries. The main objectives of the KVIC include skill improvement. Providing employment in rural areas, and transfer of technology, rural industrialization and promoting self-reliance among the people and to build up a strong rural community base. The functions of the KVIC are generally to plan, promote, organize and assist in implementation of programmers for the development of Khadi and village industries.8. HISTORY Lijjat Papad is a women’s organization of the women, by the women and for the women. It was stared in 1959, Girgaum, Mumbai with 7 lady members of the residential tenements of “Lohana Niwas” gathering on the terrace of the building for a function by rolling 4 packets of papads and the decision to make papads, everyday. Thus Shri Mahila Griha Udyog Lijjat Papad made a beginning under the Blessing of Shri. Chhanganlal Karamshi Parekh popularity Known as ‘Pujya Chhanganlal’ who was the member of the Servants of India society and a highly successful social worker. He was a noble man gifted with down-to-earth ideas. The turning point of the institution came in 1966 when then Chairman of Khadi & Village Industries Commission Pujya Uchhangral N. Dhebar visited the Institution and got it recognized by the Khadi & Village Industries Commission it was also registered under Bombay Public trust Act 1950 and also registered under Societies Registration Act, 1860. The Objective of the institution is to provide employment to the ladies to enable them to earn decent and dignified livelihood. Any women can render physical work in this institution without distinction of caste, creed and color and agrees to abide by the Institution can become a member of the Institution from the date on which she starts working. Every branch is headed by a Sanchalika to see the production of the branch. There is Central managing Committee consisting of 21 members out of, which there are 6 elected Office Bearers i.e. President, Vice- President, 2 Secretaries and 2 Treasurers. Another important fact about the Institution is that a male person cannot become its member and any male employee whether working honorary or on Salary basis has no right whatsoever over Institution. All the branches are autonomous units for the purpose of profitability and the profit or loss as the case may be of such unit is borne by the owner sister member of that branch by increasing or decreasing her rolling charges accordingly. The credit for rapid progress9. goes to the constant vigilance on the part of sister members maintaining the quality of Lijjat Papad with their hard work. Besides Lijjat Papad the institution has other products like Khakhra, Masala, and Vadi, SASA Detergent Powder & Cakes, Bakery Products, Liquid Soaps, Gehu Atta & Chapattis. At present it has
69 centers * 31 divisions in different states and gives, self- Employment to about 42000 sister member all over Indian. The sales which have amounted to only Rs. 6,196/- in the first year. i.e.1959 have already touch the level of Rs. 300 crores which includes Rs. 12 crores of exports. Lijjat Papad has earned reputation not only in Indian but also in every nook and corner of the world. The worldwide demand for crisp and alluring Lijjat Papads always keep growing. At present about 30 to 35 percent production of Lijjat Papad is being exported. The main consumer countries include U.K., U.S.A, Middle East and also in Singapore, Honk- Kong, Thailand Holland, Australia, Europe, Japan & and other countries.10. The Beginning It all began on 15th March 1959 which was a warn summer day with the sun shining brightly in the cloudless sky. A majority of the women inhabitants of an old residential building in Girgaum (a thickly populated area of South Bombay), were busy attending their usual domestic chores. A group of seven women gathered on the terrace of the building and started a small inconspicuous function. The function ended shortly, the result production. This pioneer batch of 7 ladies had th bait rolling. As the days went by, the additions to this initial group of 7 was ever-increasing. The institution began grow. It the early days were not easy. The institution had its trials and tribulation. The Faith and patience of the member were put to test on several occasions –they had no money and started on a borrowed sum of Rs. 80/- Self-reliance was the policy and no monetary help was to be sought ( not even voluntarily offered donations) so work started on a commercial footing. Today, Lijjat is more than just a household name for ‘Papad’ (India’s most popular crispy bread). Started with a modest loan of Rs 80, these women took its turnover from Rs 6,196 in the first year to Rs 300 crore in the next decades, involving over 40,000 women on its revolutionary march. Gandhian business strategy, equally well executed by his followers, late Chhanganlal Karamshi Parekh and Damodar Dattani, who worked tirelessly from behind the scene. Their vision was clear – an exclusive women’s organization run managed by them, a quality product that these women had the expertise to make, and, finally, a work environment which is not competition – driven and mechanized but based on pure labour and love for the organization and its people, Lijjat is today guided by separate divisions of advertising, marketing, sales promotion and exports. There is greater coordination between branch offices (different production and marketing units) and centralized marking, advertising and exports departments. The cooperative now has annual sales exceeding Rs 301 crore (Rs 3.1 billion). What’s more stunning than its stupendous success is its striking simplicity. With quality consciousness as11. the principle that guided production, Shri mahila Griha Udyog Lijjat Papad grew to be the flourishing and successful organization that it is today. PIONEERS OF SHRI MAHILA UDYOG LIJJAT PAPAD12. Awards History The Institution has received an award from Khadi & Village Industries Commission as a “Best Village Industry” for the period 1998-1999 to 2000-2001. On 6th September 2003 the institution received the Economic Times award of “Businesswomen of the Year 200-2002 for Corporate Excellence”. In January 2003 it received the award for “Best Village” at the hands of Hon’ble Prime Minister Shri Atal Bihari Vajpayee at new Delhi.
13. On 21st December 2005 institution has received has received the “Brand Equity Award at the hands Hon’ble President of India, DR.A.P.J Abdul kalam presented by PHDCCI at VIGYAN BHAVAN, New Delhi.14. SECTION 2 Basic thoughts 1. It is a voluntary organization of sisters. 2. The organization is neither for the poor sisters nor for the rich ones-poor Sisters should remove the thoughts of poverty from should their mind and the rich sisters remove thoughts of their affluence. 3. It never accepts charity or grant. 4. It believes in running the business wisely and with practice good business ethics with dealers and consumers. 5. The organization strictly observes the practice of maintaining the the accounts regularly, writing the books daily and preparing balance sheets every month. 6. The organization is like a family and sisters run it as if they all belong to the same family. 7. The organization is like a revered place of worship. 8. No one can change these basic thoughts of the organization. Three Golden Rules Besides basic principles like self-reliance, co-ownership and faith in dignity of labour, the institution has also formed three ‘Golden Rules’ 1. All the rights of the institution must belong to members only. 2. There must be maintenance of “Lijjat” quality at any cost. 3. There must be clean and time bound accounting system.15. Philosophy that guides ‘Lijjat’ Shri mahila Griha Udyog Lijjat Papad is synthesis of three different concepts, namely: 1. The concept of Business. 2. The concept of Family. 3. The concept of Devotion. All these concepts are completely and uniformly followed in this institution. As a result of this synthesis, a peculiar Lijjat way of thinking has developed therein. The institution has adopted the concept of business from the very beginning. All the dealings are carried out on sound and pragmatic commercial footing quality goods and sells them at reasonable price. It has never accepted nor is it ever going to accept any charity, donation, gift or grant from quarter. On the contrary members donation collectively for good causes from time to time. Such as construction of houses for Earthquakes affected families of Chincholi- Jogan (Latur) & Bhujpur, Kutch etc. Besides the concept of business the institution has adopted the concept of mutual family affection, concern and trust which are the ‘idée fixe’ of the members. All the affairs of the institution are tackled on the very same pattern as a family carries out its own daily household chores. But the most important concept adopted by the institution is the concept of devotion. For the members as well the employees and the well wishers, the institution is never merely a place to earn one’s livelihood. It a temple, a church, a mosque, a gurudwara, a place of worship to devote one’s energy not for his or her own benefits but for the benefit of all. In this institution work is worship.16. SECTION 3 Culture Lijjat Patrika, the in-house magazine, is published and circulated for a nominal rate to those interested in the activities of Lijjat. It is publish in many languages, including English, Gujarati, Marathi, and Hindi. It has emerged as a strong mode of communication for information related to significant events and initiatives at Lijjat, in addition to presenting articles on women. Member sisters across all branches of Lijjat recite an all religion prayer before beginning their daily activities. The sisters are free to choose their activities and each activity is given equal importance. Leaving the organization is voluntary. No
member sister can be asked to leave unless or until she goes against the organizational principals. There is no fixed retirement age at Lijjat. Once, when the president Jyoti Naik was questioned about this anomaly, she said that there was no need to make provision for a retirement age, as the emphasis obviously was on earning one’s bread through daily work, all through one’s life. Because of Lijjat’s main motive of generating self- employment for women, no machinery is used at the production level, and everything is done manually. However, computers are now being used in some of Mumbai branches for accounts and administration.17. Role in women empowerment The growth of the Lijjat is often seen in the larger canvas of women and their empowerment. The organization has undertaken various efforts to promote literacy and computer education for member-sisters and their families. A literacy campaign for sisters began through literacy classes at Girgaum on June 18, 1999. Later, the managing committee decided to start such class in all its branches from 1980 onwards, Lijjat started giving Chhaganbapa Smurti Scholarships to the daughters of the member-sisters. The member-sisters used their organization as a medium to promote their and their families’ welfare. In the Valod centre they set up an educational and hobby centre for the rural women. Orientation courses in typing, cooking, sewing, knitting, and toy making as well as other courses like child welfare, first aid and hygiene were taught. The first ever pucca (tarred) road in Valod to be built and inaugurated in 1973 was with the help of the Lijjat, Valod branch. In 1979, Lijjat teamed up with UNICEF to organize a seminar in Mumbai on “child Care and Mother Welfare”, as part of the International Year of the child celebrations. In October 1984, Bhadraben Bhatt representation Lijjat at the UNISCO sponsored international workshop on “The role of women in the assimilation and spread of technological innovation” held at NITIE, Powai. Alkaben Kalia represented Lijjat at the National level meeting on women convened by National Commission on Self Employed Women. At the behest of Mother Teresa, the member-sisters also took part in some activities of Asha Dhan, an institution to care for destitute women. Lijjat member-sisters also tried to start a co-operative bank, but the effort was not very successful.18. Key elements of Empowerment Information With increasing business and other advances, the need for information dissemination and communication among member sisters at various branches has increased. The monthly regional meetings, annual general meetings, and all -India conventions of branches are held to keep the members aware of organizational activities and strategies, and to discuss issues such as quality activities and strategies, and to discuss issues such as quality maintenance, production rates, the handling of accounts, and everyday problems to assure a better work environment. Lijjat Patrika, the in-house magazine, is publish and circulated for a nominal rate to those interested in the activities of Shri Mahila Griha Udyog. Lijjat Patrika has emerged as a strong mode of communication for information related to significant events and initiatives at Lijjat, in addition to presenting articles on women. Initially most sisters were uneducated, but realize the important of education for their children, especially daughters. Lijjat offers scholarships for these children to encourage better performance in studies. A literacy campaign for sisters also began through
literacy classes at Girgaum on June 18, 1999. at first, it was explained that a literate woman can read or write a letter, maintain a bank accounts, pay bills, teach her children, assist her husband in his work, and live independently. Later, the managing committee decide to start such classes in all its branches. Besides other interactive and information-based activities, participation in various trade fairs and exhibitions held across India contributed to the popularity of the Lijjat brand. Such participation also builds self-confidence, through exposure and training opportunities, for the member sisters who play a significant role in the overall functioning of Lijjat.19. Key elements of Empowerment The combination of inclusion and the active participation of women have endured as Lijjat’s backbone for 43 years. The interests of all sisters are treated equally, because they sisters from the Lijjat family. Any woman, irrespective of her religion, caste, or class, can become a member after signing a pledge of devotion, which is her assurance for earning an honest income through cooperative work. Member sisters across all branches of Lijjat recite an all-religion prayer before beginning their daily activities. The sisters are free to choose their activities, such as making the masala (blend of multiple spices), pounding the flour, weighing the flour, preparing the dough, rolling papads, receiving papads after weighing, checking the papads, packing the papads, distributing wages, and handling the accounts. Each activity is given equal importance, and sisters perform these activities with mutual cooperation and consent. When a new branch of Lijjat opens, a neighboring Lijjat branch helps it by guiding and training new members. Leaving the organization is voluntary. No member sister can be asked to leave unless or until she goes against the organizational principles. Because of Lijjat’s main motive of generating self- employment for women, no machinery is used at the production level, and everything is done manually. However, computers are now being in some of the Mumbai branches for accounts and administration. Any sister can apply for a loan from the organization without specifying the reasons. As well as acquiring some financial independence, women have also realized the importance of social independence. Because women own the organization, lower-middle- class women find it very comfortable to work in such an environment.20. Accountability Lijjat presents an explicit example of organizational accountability. The managing committee members are selected from the member sisters on the basic of common consent. Any member sister can express her interest to be a managing-committee member and be selected after due procedure. The discussions are held openly, and decision powers lie in the hands of the sisters who are present on that day. A single member’s object can nullify the decision of the whole group. A member can ask an employee to quite without specifying the reason, but no employee can ask a member to quite. However, a member can be asked to quite by another member (or members) if found be involved in false practices or misconduct. Account books are easily accessible, ensuring transparency in Lijjat’s working. Lijjat follows its own financial accountability principle; for instance, there is only a 0.5 rupee margin between the production cost and selling price of a 200-gram Papad pack. There is a “piece rate” system, and sisters are paid on the basis of the number of papads they roll.
There is no credit method for running operations in the organization. Every payment is done on a daily basis, except for the outside supply of raw material. In the initial days of Lijjat, the profits of the first six months were shared equally among all sisters in the form of gold. This sharing practice is still in effect, but now the decision whether to share the profits in gold or in cash is made at the branch level. Profits and losses are shared equally among the members of a given branch. The cost of national- level advertising is borne by all branches and divisions, depending on their individual production abilities. The polypropylene division provides money for advertisements and recovers it through additional charges on the bags that it supplies to the branches and divisions across India.21. Local Organizational Capacity Lijjat became a formally complete organization by the seventh year of its existence, and afterward was recognized as a public trust. Initially, Lijjat’s activities were limited to the former Bombay, but in 1966 it started to establish centers in neighboring urban areas, followed by branches in other states such as Gujarat, Andhra Pradesh, Punjab, and Madhya Pradesh. After continued success and phenomenal growth during the last four decades, Lijjat has been able to make its presence felt worldwide. A number of people, including officials from countries such as Israel, the United Kingdom, Sri Lanka, Sudan, Iran, and Uganda, have visited India to see Lijjat’s methods of operation. They occasionally promote similar organizations in their own countries. When they started their venture, the seven women were determined not expect donations or help from anyone to run the organization, even if they suffered losses. This practice has become financially sound after establishing itself in the market through consistent quality in its production. Lijjat has emerged as an organization that not only denies any donations from other parties, but also provides help to the needy. For instance, after the earthquake in Gujarat in January 2001, all the branches of Lijjat gave a total donation of more than Rs 4.8 million, including Rs1 million from the central office. There are a number of other such instances that have contributed to enhancing the self-esteem of the member sisters.22. SECTION 4 Organization Structure and Management In order to ensure that the working of the trust was professional, an organization structure and certain professional guidelines were put in place. Member-sisters owned the enterprise. Any women, irrespective of caste or religion willing to work in any capacity could become a member by signing a pledge of devotion to the basic tenets of the organization. It was a commitment to earn legitimate honest income thought wok on a co- operative basis. Six Offices - Bearers 1. Smt. Jyoti J. Naik - President 2. Smt. Pratibha E. Sawant - Vice-President 3. Smt. Sunanda R. Belnekar - Secretary 4. Smt. Swati R. Paradkar - Secretary 5. Smt. Priyanka G. Redkar - Treasurer 6. Smt. Sheetal S. Koyande - Treasurer23. Lijjat believes in the philosophy of sarvodaya and collective ownership. It accepts all its working members as the owners and an equal partaker in both profit and loss. The members are co-owners and fondly referred to as "sisters". All the decisions are based on consensus and any member-sister has the right to veto a decision. Men can only be salaried employees (accountants, drivers or security guards), and not the members of the organization (i.e. they are not the owners). The running of the organization is entrusted to a managing committee of twenty-
one members, including the President, the Vice-President, two secretaries, and two treasures. Sanchalikas are in-charge of various branches and divisions. The office bearers of the managing committee and the sanchalikas are chosen from among the member-sisters on the basis of consensus every three years. Each branch has a committee eleven member-sisters, again chosen by consensus. The central office at Mumbai previously coordinated the activities of various branches. But, as the organization grew, the authority was decentralized in terms of work and sharing of profits at the branch level. However, the sanchalikas still need the managing committees approval before they undertake any new project or activity. All the branches follow the same set of instructions and have similar accounting system. To co-ordinate various branches in a region or state, there are branch coordination committees and area meetings of various branches in a state. The annual general meeting is attended by member-sisters representing branches and divisions all over India. Currently, Lijjat has branches in seventeen Indian states -- Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana, Jharkhand, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, and West Bengal. Account books are easily accessible to all the member-sisters, ensuring transparency. Lijjat follows its own financial accountability principle. There is no credit method for running operations in the organization. Every payment is done on a daily basis, except for the outside supply of raw material. Profits and losses are shared equally among the members of a given branch. In the initial days of Lijjat, the profits of the first six months were shared equally among all sisters in the form of gold. This sharing practice is still in effect, but now the decision whether to share the profits in gold or in cash is made at the branch level. The cost of national-level advertising is borne by all branches and divisions, depending on their individual production abilities. Because of Lijjats main motive of generating self-employment for women, no machinery is used at the production level, and everything is done manually. However, computers are now being used in some of the Mumbai branches for accounts and administration.24. The quality of papads can vary due to quality of water used in various parts of India. To avoid any inconsistencies, the final products are tested in the Lijjats laboratory in Mumbai. In the monthly meetings, the quality issue and modifications are tested. The central office purchases and distributes all ingredients to maintain the quality of the final product. For example, the urad dal is imported from Myanmar, asafetida is imported from Iran, and black pepper comes from Kerala. The committee often makes surprise visits to various branches to assure that production conditions are hygienic. When a new branch of Lijjat opens, a neighboring Lijjat branch helps it by guiding and training new members. On successive failures of a branch to abide by the organizations philosophy of consistent quality and production of papads, the central committee reduces the daily wages of its members by 1 rupee. The member-sisters are also rewarded for extra effort. For instance, in 2002, the member-sisters at the Rajkot branch received Rs 4,000 each as bonus, while the member sisters at Mumbai and Thane branches received a 5-gram gold coin as an incentive. Several issues of
Lijjat Patrika enumerate the names of the names/numbers of the member-sisters, who were rewarded with the cash or gold, for their extra efforts.25. How the system works The entire cycle starts with a simple recruitment process. Any woman who pledges to adopt the institutions values and who has respect for quality can become a member and co- owner of the organization. In addition to that, those involved in the rolling of the papads also need to have a clean house and space to dry the papads they roll every day. Those who do not have this facility can take up any other responsibilities, like kneading dough or packaging or testing for quality. Packed papads are sealed into a box (each box holds 13.6 kg) and the production from each centre is transported to the depot for that area. Mumbai alone has sixteen branches and six depots. Each depot stocks production from the nearby three to four branches -- roughly about 400 boxes. In some smaller towns or villages, the branch itself serves as the depot. The depots are our storage areas as well as pick up points for distributors. Distribution flow chart26. Their distributors pick up the quantity of papad they require and pay cash on delivery because they pay their bens (members are called bens, or sisters) every day. Since they have an estimate of the quantity each distributor takes, they produce accordingly. This ensures that they neither stock inventory nor pay heavily for storage. They have about 32 distributors in Mumbai. Each distributor picks up an average of 100 boxes per day from the depot. This is where their job ends. They are not involved in how and where a distributor delivers as long as he stays within the area they have marked for him. Generally each distributor has his three-wheeler and about eight to ten salesmen to deliver to retail outlets within his territory. To select a distributor, they first give an advertisement in newspapers for the areas they have marked. Members from their marketing division personally go and check the godown facilities and only on their approval do they appoint distributors. A distributor pays them Rs150,000 as deposit. They make it clear to them that they must pay on delivery if they want our distributorship. This system is followed all over India and it works well for them. When they discover that there is demand in a particular place, they open a new branch, like the recently opened one in Jammu and Kashmir. Whether or not they have a centre in an area, their goods reach there. For example, they do not have any centre in Goa, but they have appointed a distributor for that area to ensure that Lijjat papads reach Goa. Their communication with distributors is regular through monthly meetings where they discuss their problems and also the issues that they may have about quality, price, reach, etc. They do not have individual door-to-door salesmen or women selling from homes -- only the appointed distributor for the area. The same system is followed for other products, but they may have different distributors and depots for different products. Exports Their exports alone account for Rs 10 crore (Rs 100 million). They are not directly involved in exporting, but recognized professional merchant exporters (who also export other food products) place an export order. Only on receiving the full advance through a cheque do they begin production. Because all exports are done from Mumbai, the supply also comes from here. Export production is of the same quality as daily production. In fact, they send some of the daily production for export.
27. Collection flow chart Again with exporters, our responsibility ends with delivery. They are, both, expected and encouraged to check the goods on collection. After that, where and how they export is their call. At present, 30 per cent to 35 per cent of the production of Lijjat Papad is being exported, mainly to countries like the United States, the United Kingdom, the Middle East, Singapore, Hong Kong and Holland. Distributing profits They have accountants in every branch and every centre to maintain daily accounts. Profit (or loss, if any) is shared among all the members of that branch. They have a committee of 21 that decides how the profits are to be distributed. They generally buy gold coins -- 5gm or 10 gm, depending on the profit. Everyone gets an equal share of profit, irrespective of who does what work, irrespective of seniority or responsibility. Even a ben who has recently joined gets the same share as others who have been with us longer. Each branch calculates its profit and divides it equally among all its members. Mumbai has 12,000 members, the rest of Maharashtra has 22,000, and Gujarat has between 5,000 and 7,000 members.28. SECTION 5 Production & Packaging Process The production process begins at 4.30 a.m. in the morning when the entire sister members come to collect their respective dough. They collect it and go back to their homes and start rolling rolling the dough. The rolled dough is then dried on a piece of cloth under sunlight. The next morning the sister members bring these papads back. In the second stage the rolled papads are send to the quality control department for the regular quality under the supervision of quality control executive. Lijjat has been maintaining of the same standard since the day of its existing. The checking of the papads is done in a batch, and if any of the Papad does not conform to the Lijjat standard then the whole batch is disposed off. The institution ensures that these defective papads do not reach the market; hence they are disposed in the sea instead of garbage bin. This guarantees that they never reach the market. In case of any mistake, the institution not only tries to find out that who has made the mistake, instead they also try to mistakes is borne by all the sister members, in case of heavy losses, but if the loss is small or minute then the member who has made the mistake itself bears the loss. The institution itself carries out the packaging process instead of having collaboration with others. These plastic bags are manufactured without any technical help or machinery; instead it is hand- made. These employees are also women. The packaging29. department comprises of 70 sister members. The bags that are used for packing papads are Polpopryin (PP) bags. These bags are manufactured at a factory situated at Dahisar. Diversifications Lijjat has several divisions and manufacturing units: • Flour Division (Vashi) • Masala Divisions and Quality Control Laboratory (Cotton Green) • Printing Division (Cotton Green) • Advertising Division, Bandra • Khakhra Division, (Buhari, Valod district) • Chapati Divisions at Wadala, Borivali, Mulund and Kandivali • Polypropylene set-up (Kashi-Mira Road) • Vadi factory (Valod) • Bakery Division (Valod) • Detergent Powder and Cake manufacturing unit (Dahisar) and office (Boriovali)30. SECTION 6 Market Positioning As a business enterprise, the declining sales figure for three consecutive years – Rs 298 crore (1999-2000), Rs 288 crore (200-2001) and Rs 281 crore (2001-2002), is a matter of concern for Lijjat
management. Some of its home turf in Maharashtra and Gujarat has been captured by a growing completitive local market. But Lijjat has also expanded to the North – Delhi, Punjab, Himachal Pradesh and, with the latest branch in Jammu, to the Kashmir market as well. Though each branch is responsible for the marking of its products in the areas allotted to it, the new centralized marketing offices now procure surplus production from different branches and market it at an all-India level. This coupled with a healthy upward trend in the export of Lijjat Papad positions Lijjat as the strongest brand in the Papad industry. The other big brands in the Papad market are Bikaner, MDH and Saktibhog, but none seem to be able to make any dent in Lijjat’s share of the industry as their core business is not Papad. Lijjat marking its products through a wide network of dealers and distributors all across the country, and has never chosen to sell or push its products directly through the vast network of its office and sister-members even during the initial years. Rather, over the years, Lijjat has developed cordial and mutually beneficial relationships with its dealers. Siters claim they believe in doing the business wisely and on sound business ethics. Dealers are given a set commission of seven percent and retailer’s earnings are fixed between Rs 2.25 and Rs 26 on the investment of Rs 14 for 200 grams and Rs 150 for 2.5 Kilogram packs respectively. There are 24 dealers for Ranchi branch in cities like Ranchi, Jamshedpur, Dhanbad, Bokaro, Patna, Gaya. During the month of November 20002, around 40,000 packs of 250 gram pack of Papad are sold and the total income crossed Rs 0.65 million. According to the accountant at Lijjat’s Ranchi branch, who wishes to remain unnamed (as that would shift the attention from sister-members to employees and thus violate Lijjat’s31. principles and traditions), from 2003 Lijjat is aiming at a sales target of a million rupees every month. Thanks to sound advertising, Lijjat has already become a household name as a symbol of women’s strength and resurgence, and its recipe combining udad, noong, pepper and hing has conquered the Papad-eater’s palate.32. • Products Lijjat’s manufactures several products, of which the Papad is the most famous: • Papad (five flavors: lasan, moong, mirch, Punjabi and urad) • Khakhra • Appalam • Masala • Vadi • Gehu Atta(Wheat flour) • Bakery products • Chapati • SASA Detergent Power • SASA Detergent Cake (Tikia) • SASA Nilam Detergent power • SASA Liquid Detergent THE LIST OF PRODUCTS AVAILABLE:33. • Pricing Shri mahila Griha Udyog Lijat papad adopts a Cost Plus Pricing Strategy for all their products. The Lijjat products are targeted at the middle and lower segments of society. These segments are highly price sensitive and hence this method of pricing allows them to market their products extensively. While calculating the price the following expenses are taken into consideration: ♣ Cost of Raw material ♣ Rolling Charges ♣ Packaging Costs ♣ Selling Expenses ♣ Administrative expenses A certain makup is then added to these costs to account for the profits. • Promotions At Shri Mahila Griha Udyog Lijjat Papad, they believe that the best promotion they could possibly receive is by word of mouth. Therefore they concentrate more on cost effectiveness and quality rather than on more expensive modes of promotion like advertisements. Therefore annual expense on advertisement and promotion amounts to Rs. 60 lakes, a mere 0.2% of total turnover. The extremely famous ‘bunny rabbit’ campaign continues to be
aired on specific regional channels. For e.g. Alpha Guajarati, Alpha Bengali, Sun ect. They also advertise in English and regional newspapers. The distributors also need to be motivated properly, so that they in turn make a greater effort to sell large volumes of the products to the retailers. Targets are set quarterly for the distributors i.e. should they exceed this target; the distributor will receive a further 1% discount.34. ANALYSIS SWOT Analysis¬ Strengths • Sincere Hardwork • Development of woman by proding them a living / employment. • Maintaining the same standard over the last 45 years. • Having a unique status in the country. Weakness The institution does not believe in holding any weakness for a permanent or a long period of time. Threats -- In terms of competition -- • In the Papad industry, the major competition or threat is posed to the institution by Ganesh Papad. • In the spices industry, the Haldiram and MDH are the major competitors. • In detergent, there are many competitors like HLL, P&G ect.35. Employees / Members¬ There are approximately 42,00 sister members working for Lijjat Papad not as employees but as co-owners or partners. This is because they have a policy of believing that every person working for them is a member and not a employee. It is very well put in their mind that this institution is just for them. Ninety percent of the member are those women whose husbands are either disabled or drunkard or do not work. Organization Chart¬ The Organization chart as follow: Overall, there is a managing committee of 21 managers that manages the organization. Promoters¬ There are no promoters for the institution. This is because their services are not required.36. Markets¬ • Market Segmentation The institution does not do market segmentation because they do not target age group or income group because their product is for all the masses and classes. It is a product which is consumed in each and every house as it is affordable to all. The Papad is available in many denominations from Rs.11/- to Rs.270/- depending on the weight. Sources of Finance¬ Lijjat borrows funds/takes loans mainly from 3 banks: • Banks of India. • Bank of Baroda. • Dena Bank. The interest rates for the loans are @ 12% but this is where the institution gets a concession as 8% out of the out the 12% is paid by KVIC and remaining 4% by the institution itself. This is perhaps the only concession offered to the institution by the Government of India. Technical collaboration¬ The organization does not have technical collaboration with any other company as no machinery is used in production. Everything is manmade / handmade. As a main motive behind the building up of this institution is to provide as much employment as they can for women. Even the packaging is done on their own. Market share¬ Lijjat papad occupies 90% of the papad market in India. In spices and detergent industry the market share is 15-20 percent. Vanai¬ The institution has a trend of calling wages as vanai. The vanai paid to the members depends upon the number of kilos rolled by them. The minimum a member should roll is 5 Kgs. Some even roll upto 20 kgs. Every day. The rate of37. vanai is Rs. 18/- per kg. So this means that Rs.90 is the minimum paid to each member. Vanai is paid on daily basis when they deliver the rolled papads and clear the quality tests. The President and the vice-president are paid a fixed amount of vanai. They are not supposed to roll papads as according to the norms
only the person who has previously rolled papads can become the vice-president or the president or the president. They are entitled for the vanai only when they attend the office and perform their respective duties. If on a particular day they remain absent then the vanai is not paid to them. This norm is applicable for the secretary and treasurer also. ¬ Prices of Papad Available Dealer Price List General Category 100 gms. 200 gms. 250 gms. 500 gms. 1 kg 2.5 Kgs. 11.00 21.00 26.00 49.00 95.00 232.00 Special category 100 gms. 200 gms. 250 gms. 500 gms. 1 kg. 2.5 Kgs 12.50 24.00 30.00 58.00 113.00 277.0038. Consumer price List 100 gms. 200 gms. 250 gms. 500 gms. 1 kg. 2.5 Kgs. 13.00 25.00 31.00 59.00 114.00 278.00 Special Category 100 gms. 200 gms. 250 gms. 500 gms. 1 kg. 2.5 Kgs. 15.00 29.00 36.00 69.00 135.00 332.0039. Export Prices¬ Export Prices ranges from Rs.21/- To Rs.24/- SECTION 7 Challenges and potential The story of seven illiterate and poor women who borrowed Rs 80 to start a Papad business, and took its turnover from Rs 6,196 in the first year to Rs 300 crore in the next four decades, involving over 40,000 women on its revolutionary march, is fanciful at any a well thought-out Gandhian business strategy, equally well executed by his followers, late Chhaganlal Karamshi parekh and Damodar, who worked tirelessly from behind the scene. Their vision was clear – an exclusive women’s organization run and managed by them, a quality product that these women had the expertise to make, and, finally, a work environment which is not competition-driven and mechanized but based on pure labour and love for organization and its people. Lijjat is today guided by separate divisions of advertising, marketing, sales promotion and exports. There is greater coordination between branch office (different40. production and markeing units) and centralized marking, advertising and exports departments. Transfer of finished products centralized marketing offices from different branches was worth Rs 113.52 crore and ad-spend stood at Rs 2.55 crore for 2000-2001. But more than its much-hyped sales figure, Lijjat’s experiment in the realm of corporate governance stands out as one of a kind. All the centers are’ autonomous; profits remain with the respective branches and are normally used to augment the business after a due share is distributed as extra vanai charge to sister-members. Employees, numbering about 5,000 including the chairperson herself, are in no way superior to sister-members, and are therefore expected to behave accordingly. Besides, the phenomenal growth and expansion og Lijjat into a muti-product company has opened up new employment opportunities for the sister-members; eligible candidates are chose and trained to work in its modern Polypropylene, Sasa detergent & cake and printing divisions. Lijjat’s Ranchi branch was established in November 1997 bifurcating it from the only branch in Bihar at Muzaffarpur. It pays Rs 11,000 per month as rent for the building which houses’ its office and workshop. A “trekker” (thirteen-sister passenger vehicle has also been purchased for the conveyance of sister-members from home to the Lijjat office and back. This branch has 165 sister-members and sold Papad worth Rs 0.65 million in November 2002. Vanai charge on Deepawali this year. The Muzaffarpur branch, according to Lijjat sources, paid Rs 2,500 as extra according to Lijjat sources, paid RS 2,500 as extra vanai charge to its sister-members. Similarly, the Mumbai and thane branch distributed gold coins of five grams to
each of the 4,056 sister-members a couple of months ago. The branch averages around their rupees as gross profit and one rupee as net profit from per Kilogram of Papad. “As an experiment, Lijjat has insulated its sister-members from joblessness. These women also work from their homes, where help from other family members not only adds up to the income but makes the work more enjoyable. At the workplace they are self- respecting, hard-working and sisterly to one another. More importantly, besides the strength of womanhood, Lijjat is also an experiment in the restoration of the essence of womanhood. The Lijjat women offer an alternative to the highly competitive and stressful41. work environment defined and dominated by men in which a woman competes with a man more as a man than a woman,” says elderly Gandhian, TK Sumaiya, Bombay Sarvodaya Mandal. Contribution to social service On several occasions, the Lijjat member-sisters have undertaken social service activities such as distributing nutritious food for poor children, donating money for conducting community marriage, instituting prize- money fore spread of primary education, undertaking blood donation drive, organizing heath camps, plantation drives and even making donations to Government bodies. In 1999, the Mumbai City felicitated Smt. Rukminiben B. pawar, Lijjat President, as an outstanding woman in the field of social work. Lijjat undertook the rehabilitation Of chincholi (Jogan), the earthquake affected village in the Latur district of Maharashtra. The institution provided the finance and supervised the work of construction of fifty- eight houses for the people of the village. Member-sisters donated money from their daily vanai (wage).42. After the 2001 Gujarat earthquake, all the branches of Lijjat gave a total donation of more than Rs 4.8 million, including Rs 1 million from the central office. Lijjat built forty houses for the rehabilitation of the people of Bhujpur (Bhachau) in Kutch District. SECTION 8 PROBLEMS FACED BY LIJJAT PAPAD &THEIR SOLUTION o The papads are prepared in different parts of India, the quality of the water used usually varies, and so can the quality of final product. To prevent any inconsistencies, Lijjat has its own laboratory in Mumbai, where the final products are tested and coded. In the monthly meeting, the quality issue and modifications are also discussed. Currently there is a problem of fake Lijjat papads being introduced in the market. In June 2001,three persons are arrested in this connection in Bihar, but the threat exists in the global market also.43. With increasing business and other advances, the need for information dissemination and communication among member sisters at various branches has increased. The monthly regional meeting, annual general meeting, and All-India convention of branches are held to keep the members aware of organization activities and strategies, and to discuss issues such as quality maintenance, production rates, the handling of accounts, and everyday problems to assure a better work environment. 1) Previously Detergent, along with all the other products of Lijjat was exempt from sales tax. Recently the Government has passed a new provision, which does not include detergent in the PCPI (Processed Cereals and Pulses Industties) list of products. Therefore, Shri Mahila Griha Udyog Lijjat Papad is Libable to pay the Sales Tax for their Sasa Detergent Powder. Negotiation is currently being carried out with government to exempt
this product from Sales tax as well. 2) The rolled papads need to be dried for a certain number of hours. This entire process in done in the ‘bhagini’s’ homes. Therefore in the monsoon when it rains it is difficult to dry the papads outdoor. This now has to be indoors. The ‘bhaginis’ stay in small houses and space is a constraint hence fewer papads are produced during the monsoon season. This is the reason that Lijjat does not export in monsoons. The solution adopted by Lijjat is to provide extra money to the bhaginis during monsoons to purchase kerosene lamps to enable faster drying of papads. Our suggestion is to hire an additional space during monsoon a central position near the depots, with kerosene lamps where the bhaginis can come and dry their papads. This will lead to higher production which can be exported. 3) Another problem expressed by them is competition in sales of their detergents (Sasa) from established brands like Nirma. We feel one of the reasons for this problem is lack of advertising, as stated earlier, Lijjat spends only 0.2% of their total turnover equal to Rs. 60b Lkhs on promotions. They need to increase their investment in advertising through electronic media and print media, which will create greater awareness about their detergents and increase sales. Also, currently they don’t use direct selling to sell44. their products. They rely mainly on word of word of mouth which has been successful for their papads but has not worked so well for their other products like detergents. We feel they should adopt direct selling as it involves low cost and it will definitely widen their reach and create more awareness about their products. 4) Lijjat currently exports through merchant exporters and does not involve itself in direct exporting. We feel they can save on the margin that the merchant exporters make, by appointing their own distributors in the main countries and this will enable them to reduce cost and increase profit margin. Factors for Success o The merging of ownership with membership has encouraged uniform and sustained organizational growth. o The consistent quality of the product has been a primary factor in establishing and maintaining Lijjat’s brand in the market for the last four decades. o The Sarvodaya philosophy proved vital in forming Lijjat’s foundation. o Lijjat has emerged as an innovative organization in which women from religion, caste, or class can become members. The pledge and all- religion prayer also encourage cooperative work among women, irrespective of caste or religion.45. o Transparency in operations and nonhierarchical structure has helped in establishing organizational accountability among member sisters. o Lijjat encourages its members to give to others whatever they can, instead of expecting help from others. Lijjat does not accept donations, but gives donations, which enhances members; self-esteem and pride in their own organization. o Calling the members “sisters” creates an informal work environment. Frequent meetings, open interaction, and consensual distribution of tasks reduce the possibility of disputes resulting from communication gaps and help work to go smoothly. o Lijjat provides economic opportunities through a domestic activity. Once involved in this activity, the women acquire confidence and status as they make money in a respectable manner. The more enterprising responsible and experienced member sisters climb the administrative ladder. Lijjat exemplifies a remarkable way of making leader out of ordinary women. SECTION 9
Conclusion The most interesting lesson managers can pick up from Shri Mahila Grihan Udyog Lijjat Papad, sticking to its core values the past forty years. The institution thus paves the way for women to become self-reliant and self- confident. In the process Lijjat provides them the platform for improving their status in the society, which is their justified right.46. The ladies are brimming with confidence. Lijjat is an institution which has stood the trial of time and tribulation and has achieved success because when basic management principles and uncompromising quality consciousness are applied in conjunction with sound business principles, there can be only one way for the ladies of the Lijjat-a brighter and happier tomorrow, the pride and joy of fulfillment. Lijjat makes almost equal money for its entire people and makes just enough money. No one would become a millionaire by setting up another Lijjat. If this aspect of Lijjat’s operations is not very good news for machine and money- driven corporate owned by tycoons, the essential message that Lijjat’s success conveys has definitely fired the imagination of women and rural folks. In many parts of Maharashtra and Gujarat, locally manufactured and marketed eatables are catching on. There is hardly any NGO or voluntary organization nowadays which does not try create employment and funds, small or big, along Lijjat’s line. As a business house, Lijjat itself has been trying to rewrite its own success with another product with varying degree of success. Grounded spices, Khakhra, black pepeer powder, detergent powder and cake, Vadi, bakery products, wheat filthier are on Lijjat’s menu but Papad with a sales figure of Rs 288 crore remains at the top. Among similar ventures which came a cropper are incense sticks, leather bags, Tiffin boxes and matchsticks. But most promising among them is the chapatti division with six branches in Mumbai. Here, the women come in to work at around seven in the morning and make chapatti as they are prepared in homes. Packed Lijjat chapatti, four for Rs five, are available at retail shops in Mumbai. These centers also procure orders from hotels, office canteens, etc. and the catering in Mumbai includes some big names from the hotel and catering industry. ‘As the pace of life increases, little time is available to most people in metros like Mumbai to cook their own food. There are good prospects for women forming small groups and catering to the local demand for homemade chapatti or similar products,” says Ashok Bhagat, a leading social worker engaged in tribal welfare activities in the Gumla district of Jharkhand.47. Next time there is Lijjat Papad on the table, you sure can see a Chandrasekhar or Suja’s dimpled fingers deftly roll out the crisp Papad. It is made with love and care, just like from their mama’s kitchen. Bibliography www.lijjat.com Information from the Lijjat prospectus Visited Lijjat’s office.