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Final a project report on lijjat paad

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Final a project report on lijjat paad

  3. 3. Contributed by members of DECLARATIO I, SHAIKH FAHAD student of TYBMS Shri Chinai College of Commerce andEconomics (Semester vth ) hereby declare that I have completed this project on WOME ’S CO-OPERATIVE SHRI MAHILA GRIHA UDHYOG LIJJAT PAPAD in the academic year2008-2009. This information submitted is true and original to best of my knowledge. Signature of the Student ( ) CERTIFICATE I, DR.VI ITA PIMPALE hereby certify that SHAIKH FAHAD student of T.Y.BMSShri Chinai College of Commerce and Economics (semester v) has completed the project onWOME ’S CO-OPERATIVE SHRI MAHILA GRIHA UDHYOG LIJJAT PAPAD in theacademic year 2008-2009. The information submitted is true and original to the best of myknowledge.Signature of the Project Guide(___________________________) Project Source URL
  4. 4. Contributed by members of ACK OWLEDGEME T It gives me immense pleasure in presenting this project on the topic of“WOME ’S CO-OPERATIVE.” In this project, i have given brief descriptionabout the organization, which has been started by the women’s organization.I’m thankful to SHRI CHI AI COLLEGE Of COMM. & ECO., for offeringme this course. I wish to take this opportunity to express my deep sense of gratitude toDr. Vinita Pimpale, faculty of SHRI CHI AI COLLEGE OF COMM. & ECO,for being my guide for this project. She has been a constant course ofinspiration and i sincerely thank her for her suggestion and help in preparingthis report. I would also like to express my deep sense of gratitude to the members ofthe organization for their co-operation and providing adequate informationabout the company and related information. Last but not the best; i would like to express my sincere gratitude to myparents, teachers, and friends for their support, co-operation and their prayerswithout which my project would not have been completed. Project Source URL
  5. 5. Contributed by members of EXECUTIVE SUMMARY SHRI MAHILA GRIHA UDHYOG LIJJAT PAPAD,popularly known as “Lijjat”, needs no introduction. Lijjat iswoman’s organization manufacturing different products of villageindustries, having its central office at Mumbai. Lijjat is spread allover India. It has 69 centers and 31 divisions in different states. In 1959, Girgaum, Mumbai Shri mahila griha udyog LijjatPapad made a beginning under the blessing of Shri ChhanganlalLkaramshi Parekh popularly known as ‘Pujya Chhaganbapa’ whowas a member of the servants of India society and a highly successfulsocial worker. In 1996 it was recognized by the khadi & villageindustries commission under the chairmanship of Pujya Uchhangral . Dhebar. A deeper insight by the report shows Lijjat’s achievements andservices renders to the society and how it has help the Indianeconomy to grow tremendously in the past few years and in the tearsto come. What is the reason for its success? The working of theorganization, management future plans. Lijjat is the story of abusiness house that has created wealth for a nation and the story ofpioneers like Pujya Chhaganbapa, Pujya Uchhangral . Dhebar. Project Source URL
  9. 9. Contributed by members of Project Source URL
  10. 10. Contributed by members of SECTIO 1Introduction Be it an evening snack, or a banquet or a meal at home, The Papad finds its due placeon the dining table. o 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 successachieved through sheer determination. The story of Shri Mahila Griha Udyog Lijjat Papadis all that much more. Shri Mahila Griha Udyog Lijjat Papad, popularly know as “Lijjat”, is an Indianwomen’s organization manufacturing different Products of village industries. Theorganization’s registered office is Situated in Mumbai and it has 69 centers and 31 divisionson different states. Lijjat is spread all over Indian. Stared in 1959 with a capital of Rs. 80, Lijjat today has a Annual turnover of aroundRs.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 isidentified with women empowerment in India. Lijjat shows how an organization can infuseGandhian simplicity in all its activities. Project Source URL
  11. 11. Contributed by members of Shri Mahila Griha Udyog Lijjat Papad is registered under The KVIC Act- (Khadi &Village Industries Commission) The Khadi and village Industries Commission (KVIC) is astatutory organization established in 1956 by an Act of parliament. It plays a pivotal role inthe strengthening of rural economy by promoting and developing Khadi and villageindustries. The main objectives of the KVIC include skill improvement. Providingemployment in rural areas, and transfer of technology, rural industrialization andpromoting 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 inimplementation of programmers for the development of Khadi and village industries. Project Source URL
  12. 12. Contributed by members of www.mbaguys.netHISTORY Lijjat Papad is a women’s organization of the women, by the women and for thewomen. It was stared in 1959, Girgaum, Mumbai with 7 lady members of the residentialtenements of “Lohana iwas” gathering on the terrace of the building for a function byrolling 4 packets of papads and the decision to make papads, everyday. Thus Shri Mahila Griha Udyog Lijjat Papad made a beginning under the Blessing ofShri. Chhanganlal Karamshi Parekh popularity Known as ‘Pujya Chhanganlal’ who wasthe member of the Servants of India society and a highly successful social worker. He was anoble 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 . Dhebar visited the Institution and gotit recognized by the Khadi & Village Industries Commission it was also registered underBombay 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 themto 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 theInstitution from the date on which she starts working. Every branch is headed by a Sanchalika to see the production of the branch. There isCentral managing Committee consisting of 21 members out of, which there are 6 electedOffice Bearers i.e. President, Vice- President, 2 Secretaries and 2 Treasurers. Another important fact about the Institution is that a male person cannot become itsmember and any male employee whether working honorary or on Salary basis has no rightwhatsoever over Institution. All the branches are autonomous units for the purpose of profitability and the profitor loss as the case may be of such unit is borne by the owner sister member of that branchby increasing or decreasing her rolling charges accordingly. The credit for rapid progress Project Source URL
  13. 13. Contributed by members of www.mbaguys.netgoes to the constant vigilance on the part of sister members maintaining the quality of LijjatPapad with their hard work. Besides Lijjat Papad the institution has other products like Khakhra, Masala, andVadi, 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 amountedto only Rs. 6,196/- in the first year. i.e.1959 have already touch the level of Rs. 300 croreswhich includes Rs. 12 crores of exports. Lijjat Papad has earned reputation not only in Indian but also in every nook andcorner of the world. The worldwide demand for crisp and alluring Lijjat Papads alwayskeep growing. At present about 30 to 35 percent production of Lijjat Papad is beingexported. The main consumer countries include U.K., U.S.A, Middle East and also inSingapore, Honk- Kong, Thailand Holland, Australia, Europe, Japan & and othercountries. Project Source URL
  14. 14. Contributed by members of www.mbaguys.netThe Beginning It all began on 15th March 1959 which was a warn summer day with the sun shiningbrightly in the cloudless sky. A majority of the women inhabitants of an old residentialbuilding in Girgaum (a thickly populated area of South Bombay), were busy attending theirusual domestic chores. A group of seven women gathered on the terrace of the building andstarted 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 thisinitial group of 7 was ever-increasing. The institution began grow. It the early days were not easy. The institution had its trials and tribulation. TheFaith and patience of the member were put to test on several occasions –they had no moneyand started on a borrowed sum of Rs. 80/- Self-reliance was the policy and no monetary helpwas to be sought ( not even voluntarily offered donations) so work started on a commercialfooting. Today, Lijjat is more than just a household name for ‘Papad’ (India’s most popularcrispy bread). Started with a modest loan of Rs 80, these women took its turnover from Rs6,196 in the first year to Rs 300 crore in the next decades, involving over 40,000 women onits revolutionary march. Gandhian business strategy, equally well executed by his followers, late ChhanganlalKaramshi 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 qualityproduct that these women had the expertise to make, and, finally, a work environmentwhich is not competition – driven and mechanized but based on pure labour and love for theorganization 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 andmarketing units) and centralized marking, advertising and exports departments. Thecooperative now has annual sales exceeding Rs 301 crore (Rs 3.1 billion). What’s morestunning than its stupendous success is its striking simplicity. With quality consciousness as Project Source URL
  15. 15. Contributed by members of www.mbaguys.netthe principle that guided production, Shri mahila Griha Udyog Lijjat Papad grew to be theflourishing and successful organization that it is today. PIO EERS OF SHRI MAHILA UDYOG LIJJAT PAPAD Project Source URL
  16. 16. Contributed by members of Awards History The Institution has received an award from Khadi & Village Industries Commissionas 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’blePrime Minister Shri Atal Bihari Vajpayee at new Delhi. Project Source URL
  17. 17. Contributed by members of On 21st December 2005 institution has received has received the “Brand EquityAward at the hands Hon’ble President of India, DR.A.P.J Abdul kalam presented byPHDCCI at VIGYA BHAVA , ew Delhi. Project Source URL
  18. 18. Contributed by members of SECTIO 2Basic 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. o 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. Project Source URL
  19. 19. Contributed by members of www.mbaguys.netPhilosophy 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 aresult 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 thedealings are carried out on sound and pragmatic commercial footing quality goods and sellsthem at reasonable price. It has never accepted nor is it ever going to accept any charity, donation, gift orgrant from quarter. On the contrary members donation collectively for good causes fromtime 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 mutualfamily affection, concern and trust which are the ‘idée fixe’ of the members. All the affairsof the institution are tackled on the very same pattern as a family carries out its own dailyhousehold 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 merelya place to earn one’s livelihood. It a temple, a church, a mosque, a gurudwara, a place ofworship to devote one’s energy not for his or her own benefits but for the benefit of all. Inthis institution work is worship. Project Source URL
  20. 20. Contributed by members of SECTIO 3Culture Lijjat Patrika, the in-house magazine, is published and circulated for a nominal rateto those interested in the activities of Lijjat. It is publish in many languages, includingEnglish, Gujarati, Marathi, and Hindi. It has emerged as a strong mode of communicationfor information related to significant events and initiatives at Lijjat, in addition topresenting articles on women. Member sisters across all branches of Lijjat recite an all religion prayer beforebeginning their daily activities. The sisters are free to choose their activities and eachactivity is given equal importance. Leaving the organization is voluntary. o member sister can be asked to leave unlessor until she goes against the organizational principals. There is no fixed retirement age atLijjat. Once, when the president Jyoti aik was questioned about this anomaly, she saidthat there was no need to make provision for a retirement age, as the emphasis obviouslywas 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, nomachinery is used at the production level, and everything is done manually. However,computers are now being used in some of Mumbai branches for accounts andadministration. Project Source URL
  21. 21. Contributed by members of www.mbaguys.netRole in women empowerment The growth of the Lijjat is often seen in the larger canvas of women and theirempowerment. The organization has undertaken various efforts to promote literacy andcomputer education for member-sisters and their families. A literacy campaign for sistersbegan through literacy classes at Girgaum on June 18, 1999. Later, the managing committeedecided to start such class in all its branches from 1980 onwards, Lijjat started givingChhaganbapa Smurti Scholarships to the daughters of the member-sisters. The member-sisters used their organization as a medium to promote their and theirfamilies’ welfare. In the Valod centre they set up an educational and hobby centre for therural women. Orientation courses in typing, cooking, sewing, knitting, and toy making aswell as other courses like child welfare, first aid and hygiene were taught. The first everpucca (tarred) road in Valod to be built and inaugurated in 1973 was with the help of theLijjat, Valod branch. In 1979, Lijjat teamed up with U ICEF to organize a seminar in Mumbai on “childCare and Mother Welfare”, as part of the International Year of the child celebrations. InOctober 1984, Bhadraben Bhatt representation Lijjat at the U ISCO sponsoredinternational workshop on “The role of women in the assimilation and spread oftechnological innovation” held at ITIE, Powai. Alkaben Kalia represented Lijjat at the ational level meeting on women convened by ational Commission on Self EmployedWomen. At the behest of Mother Teresa, the member-sisters also took part in some activitiesof Asha Dhan, an institution to care for destitute women. Lijjat member-sisters also tried tostart a co-operative bank, but the effort was not very successful. Project Source URL
  22. 22. Contributed by members of www.mbaguys.netKey elements of EmpowermentInformation With increasing business and other advances, the need for information disseminationand communication among member sisters at various branches has increased. The monthlyregional meetings, annual general meetings, and all -India conventions of branches are heldto keep the members aware of organizational activities and strategies, and to discuss issuessuch 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 workenvironment. Lijjat Patrika, the in-house magazine, is publish and circulated for a nominal rate tothose interested in the activities of Shri Mahila Griha Udyog. Lijjat Patrika has emerged asa strong mode of communication for information related to significant events and initiativesat Lijjat, in addition to presenting articles on women. Initially most sisters were uneducated, but realize the important of education fortheir children, especially daughters. Lijjat offers scholarships for these children toencourage better performance in studies. A literacy campaign for sisters also began throughliteracy classes at Girgaum on June 18, 1999. at first, it was explained that a literate womancan read or write a letter, maintain a bank accounts, pay bills, teach her children, assist herhusband in his work, and live independently. Later, the managing committee decide to startsuch classes in all its branches. Besides other interactive and information-based activities,participation in various trade fairs and exhibitions held across India contributed to thepopularity of the Lijjat brand. Such participation also builds self-confidence, throughexposure and training opportunities, for the member sisters who play a significant role inthe overall functioning of Lijjat. Project Source URL
  23. 23. Contributed by members of www.mbaguys.netKey elements of Empowerment The combination of inclusion and the active participation of women haveendured 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 forearning an honest income through cooperative work. Member sisters across all branches ofLijjat recite an all-religion prayer before beginning their daily activities. The sisters are freeto choose their activities, such as making the masala (blend of multiple spices), pounding theflour, weighing the flour, preparing the dough, rolling papads, receiving papads afterweighing, checking the papads, packing the papads, distributing wages, and handling theaccounts. Each activity is given equal importance, and sisters perform these activities withmutual cooperation and consent. When a new branch of Lijjat opens, a neighboring Lijjatbranch helps it by guiding and training new members. Leaving the organization is voluntary. o member sister can be asked to leaveunless or until she goes against the organizational principles. Because of Lijjat’s mainmotive of generating self-employment for women, no machinery is used at the productionlevel, and everything is done manually. However, computers are now being in some of theMumbai branches for accounts and administration. Any sister can apply for a loan from the organization without specifying thereasons. As well as acquiring some financial independence, women have also realized theimportance of social independence. Because women own the organization, lower-middle-class women find it very comfortable to work in such an environment. Project Source URL
  24. 24. Contributed by members of Accountability Lijjat presents an explicit example of organizational accountability. The managingcommittee 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 beselected after due procedure. The discussions are held openly, and decision powers lie inthe hands of the sisters who are present on that day. A single member’s object can nullifythe decision of the whole group. A member can ask an employee to quite without specifying the reason, but noemployee can ask a member to quite. However, a member can be asked to quite by anothermember (or members) if found be involved in false practices or misconduct. Account booksare easily accessible, ensuring transparency in Lijjat’s working. Lijjat follows its own financial accountability principle; for instance, there is only a0.5 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 papadsthey roll. There is no credit method for running operations in the organization. Everypayment 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 equallyamong all sisters in the form of gold. This sharing practice is still in effect, but now thedecision whether to share the profits in gold or in cash is made at the branch level. Profitsand 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 individualproduction abilities. The polypropylene division provides money for advertisements andrecovers it through additional charges on the bags that it supplies to the branches anddivisions across India. Project Source URL
  25. 25. Contributed by members of Local Organizational Capacity Lijjat became a formally complete organization by the seventh year of itsexistence, and afterward was recognized as a public trust. Initially, Lijjat’s activities werelimited to the former Bombay, but in 1966 it started to establish centers in neighboringurban 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, Lijjathas been able to make its presence felt worldwide. A number of people, including officialsfrom 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 similarorganizations in their own countries. When they started their venture, the seven women were determined not expectdonations or help from anyone to run the organization, even if they suffered losses. Thispractice has become financially sound after establishing itself in the market throughconsistent quality in its production. Lijjat has emerged as an organization that not onlydenies 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 totaldonation of more than Rs 4.8 million, including Rs1 million from the central office. Thereare a number of other such instances that have contributed to enhancing the self-esteem ofthe member sisters. Project Source URL
  26. 26. Contributed by members of SECTIO 4Organization Structure and Management In order to ensure that the working of the trust was professional, an organizationstructure and certain professional guidelines were put in place. Member-sisters owned theenterprise. Any women, irrespective of caste or religion willing to work in any capacitycould become a member by signing a pledge of devotion to the basic tenets of theorganization. It was a commitment to earn legitimate honest income thought wok on a co-operative basis.Six Offices - Bearers1. Smt. Jyoti J. aik - President2. Smt. Pratibha E. Sawant - Vice-President3. Smt. Sunanda R. Belnekar - Secretary4. Smt. Swati R. Paradkar - Secretary5. Smt. Priyanka G. Redkar - Treasurer6. Smt. Sheetal S. Koyande - Treasurer Project Source URL
  27. 27. Contributed by members of Lijjat believes in the philosophy of sarvodaya and collective ownership. It accepts allits working members as the owners and an equal partaker in both profit and loss. Themembers are co-owners and fondly referred to as "sisters". All the decisions are based onconsensus and any member-sister has the right to veto a decision. Men can only be salariedemployees (accountants, drivers or security guards), and not the members of theorganization (i.e. they are not the owners). The running of the organization is entrusted to a managing committee of twenty-onemembers, including the President, the Vice-President, two secretaries, and two treasures.Sanchalikas are in-charge of various branches and divisions. The office bearers of themanaging committee and the sanchalikas are chosen from among the member-sisters on thebasis 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 variousbranches. But, as the organization grew, the authority was decentralized in terms of workand sharing of profits at the branch level. However, the sanchalikas still need the managingcommittees approval before they undertake any new project or activity. All the branches follow the same set of instructions and have similar accountingsystem. To co-ordinate various branches in a region or state, there are branch coordinationcommittees and area meetings of various branches in a state. The annual general meeting isattended 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, MadhyaPradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil adu, Uttar Pradesh, and WestBengal. Account books are easily accessible to all the member-sisters, ensuring transparency.Lijjat follows its own financial accountability principle. There is no credit method forrunning operations in the organization. Every payment is done on a daily basis, except forthe outside supply of raw material. Profits and losses are shared equally among themembers of a given branch. In the initial days of Lijjat, the profits of the first six monthswere shared equally among all sisters in the form of gold. This sharing practice is still ineffect, but now the decision whether to share the profits in gold or in cash is made at thebranch 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, nomachinery 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 andadministration. Project Source URL
  28. 28. Contributed by members of 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 inMumbai. In the monthly meetings, the quality issue and modifications are tested. Thecentral office purchases and distributes all ingredients to maintain the quality of the finalproduct. For example, the urad dal is imported from Myanmar, asafetida is imported fromIran, and black pepper comes from Kerala. The committee often makes surprise visits tovarious branches to assure that production conditions are hygienic. When a new branch ofLijjat 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 ofconsistent quality and production of papads, the central committee reduces the daily wagesof its members by 1 rupee. The member-sisters are also rewarded for extra effort. Forinstance, 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 anincentive. Several issues of Lijjat Patrika enumerate the names of the names/numbers of themember-sisters, who were rewarded with the cash or gold, for their extra efforts. Project Source URL
  29. 29. Contributed by members of www.mbaguys.netHow the system works The entire cycle starts with a simple recruitment process. Any woman who pledges toadopt 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 aclean house and space to dry the papads they roll every day. Those who do not have thisfacility can take up any other responsibilities, like kneading dough or packaging or testingfor quality. Packed papads are sealed into a box (each box holds 13.6 kg) and the productionfrom each centre is transported to the depot for that area. Mumbai alone has sixteenbranches and six depots. Each depot stocks production from the nearby three to fourbranches -- roughly about 400 boxes. In some smaller towns or villages, the branch itself serves as the depot. The depotsare our storage areas as well as pick up points for distributors. Distribution flow chart Project Source URL
  30. 30. Contributed by members of Their distributors pick up the quantity of papad they require and pay cash ondelivery because they pay their bens (members are called bens, or sisters) every day. Sincethey have an estimate of the quantity each distributor takes, they produce accordingly. Thisensures that they neither stock inventory nor pay heavily for storage. They have about 32 distributors in Mumbai. Each distributor picks up an average of100 boxes per day from the depot. This is where their job ends. They are not involved inhow and where a distributor delivers as long as he stays within the area they have markedfor him. Generally each distributor has his three-wheeler and about eight to ten salesmen todeliver to retail outlets within his territory. To select a distributor, they first give an advertisement in newspapers for the areasthey have marked. Members from their marketing division personally go and check thegodown 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 theymust pay on delivery if they want our distributorship. This system is followed all over Indiaand it works well for them. When they discover that there is demand in a particular place, they open a newbranch, like the recently opened one in Jammu and Kashmir. Whether or not they have acentre in an area, their goods reach there. For example, they do not have any centre in Goa, but they have appointed adistributor for that area to ensure that Lijjat papads reach Goa. Their communication withdistributors is regular through monthly meetings where they discuss their problems andalso 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 directlyinvolved in exporting, but recognized professional merchant exporters (who also exportother 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. Exportproduction is of the same quality as daily production. In fact, they send some of the dailyproduction for export. Project Source URL
  31. 31. Contributed by members of Collection flow chart Again with exporters, our responsibility ends with delivery. They are, both, expectedand encouraged to check the goods on collection. After that, where and how they export istheir call. At present, 30 per cent to 35 per cent of the production of Lijjat Papad is beingexported, 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. Theygenerally buy gold coins -- 5gm or 10 gm, depending on the profit. Everyone gets an equalshare of profit, irrespective of who does what work, irrespective of seniority orresponsibility. Even a ben who has recently joined gets the same share as others who have been withus 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 hasbetween 5,000 and 7,000 members. Project Source URL
  32. 32. Contributed by members of SECTIO 5Production & Packaging Process The production process begins at 4.30 a.m. in the morning when the entire sistermembers come to collect their respective dough. They collect it and go back to their homesand start rolling rolling the dough. The rolled dough is then dried on a piece of cloth undersunlight. The next morning the sister members bring these papads back. In the second stage the rolled papads are send to the quality control department forthe regular quality under the supervision of quality control executive. Lijjat has beenmaintaining of the same standard since the day of its existing. The checking of the papads isdone in a batch, and if any of the Papad does not conform to the Lijjat standard then thewhole batch is disposed off. The institution ensures that these defective papads do not reachthe market; hence they are disposed in the sea instead of garbage bin. This guarantees thatthey never reach the market. In case of any mistake, the institution not only tries to find out that who has made themistake, instead they also try to mistakes is borne by all the sister members, in case of heavylosses, but if the loss is small or minute then the member who has made the mistake itselfbears the loss. The institution itself carries out the packaging process instead of havingcollaboration with others. These plastic bags are manufactured without any technical helpor machinery; instead it is hand-made. These employees are also women. The packaging Project Source URL
  33. 33. Contributed by members of www.mbaguys.netdepartment comprises of 70 sister members. The bags that are used for packing papads arePolpopryin (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) Project Source URL
  34. 34. Contributed by members of SECTIO 6Market Positioning As a business enterprise, the declining sales figure for three consecutive years – Rs298 crore (1999-2000), Rs 288 crore (200-2001) and Rs 281 crore (2001-2002), is a matter ofconcern for Lijjat management. Some of its home turf in Maharashtra and Gujarat hasbeen captured by a growing completitive local market. But Lijjat has also expanded to the orth – Delhi, Punjab, Himachal Pradesh and, with the latest branch in Jammu, to theKashmir market as well. Though each branch is responsible for the marking of its products in the areasallotted to it, the new centralized marketing offices now procure surplus production fromdifferent branches and market it at an all-India level. This coupled with a healthy upwardtrend in the export of Lijjat Papad positions Lijjat as the strongest brand in the Papadindustry. The other big brands in the Papad market are Bikaner, MDH and Saktibhog, butnone seem to be able to make any dent in Lijjat’s share of the industry as their core businessis not Papad. Lijjat marking its products through a wide network of dealers and distributors allacross the country, and has never chosen to sell or push its products directly through thevast network of its office and sister-members even during the initial years. Rather, over theyears, 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. Dealersare given a set commission of seven percent and retailer’s earnings are fixed between Rs2.25 and Rs 26 on the investment of Rs 14 for 200 grams and Rs 150 for 2.5 Kilogram packsrespectively. There are 24 dealers for Ranchi branch in cities like Ranchi, Jamshedpur,Dhanbad, Bokaro, Patna, Gaya. During the month of ovember 20002, around 40,000packs 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 (asthat would shift the attention from sister-members to employees and thus violate Lijjat’s Project Source URL
  35. 35. Contributed by members of www.mbaguys.netprinciples and traditions), from 2003 Lijjat is aiming at a sales target of a million rupeesevery month. Thanks to sound advertising, Lijjat has already become a household name as asymbol of women’s strength and resurgence, and its recipe combining udad, noong, pepperand hing has conquered the Papad-eater’s palate. Project Source URL
  36. 36. Contributed by members of • 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 ilam Detergent power • SASA Liquid DetergentTHE LIST OF PRODUCTS AVAILABLE: Project Source URL
  37. 37. Contributed by members of• Pricing Shri mahila Griha Udyog Lijat papad adopts a Cost Plus Pricing Strategy for alltheir products. The Lijjat products are targeted at the middle and lower segments ofsociety. These segments are highly price sensitive and hence this method of pricing allowsthem 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 expensesA 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 theycould possibly receive is by word of mouth. Therefore they concentrate more on costeffectiveness and quality rather than on more expensive modes of promotion likeadvertisements. 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 tobe 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 agreater effort to sell large volumes of the products to the retailers. Targets are set quarterlyfor the distributors i.e. should they exceed this target; the distributor will receive a further1% discount. Project Source URL
  38. 38. Contributed by members of A ALYSIS 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 longperiod 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. Project Source URL
  39. 39. Contributed by members of Employees / Members There are approximately 42,00 sister members working for Lijjat Papad not asemployees but as co-owners or partners. This is because they have a policy of believing thatevery person working for them is a member and not a employee. It is very well put in theirmind that this institution is just for them. inety percent of the member are those womenwhose husbands are either disabled or drunkard or do not work. Organization ChartThe 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 servicesare not required. Project Source URL
  40. 40. Contributed by members of Markets • Market Segmentation The institution does not do market segmentation because they do not target age groupor income group because their product is for all the masses and classes. It is a productwhich is consumed in each and every house as it is affordable to all. The Papad is availablein 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 aconcession as 8% out of the out the 12% is paid by KVIC and remaining 4% by theinstitution itself. This is perhaps the only concession offered to the institution by theGovernment of India. Technical collaboration The organization does not have technical collaboration with any other company asno machinery is used in production. Everything is manmade / handmade. As a main motivebehind the building up of this institution is to provide as much employment as they can forwomen. Even the packaging is done on their own. Market share Lijjat papad occupies 90% of the papad market in India. In spices and detergentindustry the market share is 15-20 percent. VanaiThe institution has a trend of calling wages as vanai.The vanai paid to the members depends upon the number of kilos rolled by them. Theminimum a member should roll is 5 Kgs. Some even roll upto 20 kgs. Every day. The rate of Project Source URL
  41. 41. Contributed by members of www.mbaguys.netvanai 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 notsupposed to roll papads as according to the norms only the person who has previously rolledpapads can become the vice-president or the president or the president. They are entitledfor the vanai only when they attend the office and perform their respective duties. If on aparticular 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 58.00 113.00 277.00 Project Source URL
  42. 42. Contributed by members of www.mbaguys.netConsumer 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 69.00 135.00 332.00Export Prices Export Prices ranges from Rs.21/- To Rs.24/- Project Source URL
  43. 43. Contributed by members of SECTIO 7Challenges and potential The story of seven illiterate and poor women who borrowed Rs 80 to start a Papadbusiness, and took its turnover from Rs 6,196 in the first year to Rs 300 crore in the nextfour decades, involving over 40,000 women on its revolutionary march, is fanciful at any awell thought-out Gandhian business strategy, equally well executed by his followers, lateChhaganlal 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, aquality product that these women had the expertise to make, and, finally, a workenvironment which is not competition-driven and mechanized but based on pure labour andlove for organization and its people. Lijjat is today guided by separate divisions of advertising, marketing, salespromotion and exports. There is greater coordination between branch office (differentproduction and markeing units) and centralized marking, advertising and exportsdepartments. Transfer of finished products centralized marketing offices from differentbranches 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 ofcorporate governance stands out as one of a kind. All the centers are’ autonomous; profitsremain with the respective branches and are normally used to augment the business after adue share is distributed as extra vanai charge to sister-members. Employees, numberingabout 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 andexpansion og Lijjat into a muti-product company has opened up new employmentopportunities for the sister-members; eligible candidates are chose and trained to work inits modern Polypropylene, Sasa detergent & cake and printing divisions. Lijjat’s Ranchi branch was established in ovember 1997 bifurcating it from theonly branch in Bihar at Muzaffarpur. It pays Rs 11,000 per month as rent for the building Project Source URL
  44. 44. Contributed by members of www.mbaguys.netwhich houses’ its office and workshop. A “trekker” (thirteen-sister passenger vehicle hasalso been purchased for the conveyance of sister-members from home to the Lijjat officeand back. This branch has 165 sister-members and sold Papad worth Rs 0.65 million in ovember 2002. Vanai charge on Deepawali this year. The Muzaffarpur branch, accordingto Lijjat sources, paid Rs 2,500 as extra according to Lijjat sources, paid RS 2,500 as extravanai charge to its sister-members. Similarly, the Mumbai and thane branch distributedgold coins of five grams to each of the 4,056 sister-members a couple of months ago. Thebranch averages around their rupees as gross profit and one rupee as net profit from perKilogram of Papad. “As an experiment, Lijjat has insulated its sister-members from joblessness. Thesewomen also work from their homes, where help from other family members not only addsup 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 thestrength of womanhood, Lijjat is also an experiment in the restoration of the essence ofwomanhood. The Lijjat women offer an alternative to the highly competitive and stressfulwork environment defined and dominated by men in which a woman competes with a manmore as a man than a woman,” says elderly Gandhian, TK Sumaiya, Bombay SarvodayaMandal. Project Source URL
  45. 45. Contributed by members of www.mbaguys.netContribution to social service On several occasions, the Lijjat member-sisters have undertaken social serviceactivities such as distributing nutritious food for poor children, donating money forconducting community marriage, instituting prize- money fore spread of primaryeducation, undertaking blood donation drive, organizing heath camps, plantation drives andeven 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 affectedvillage in the Latur district of Maharashtra. The institution provided the finance andsupervised the work of construction of fifty-eight houses for the people of the village.Member-sisters donated money from their daily vanai (wage). After the 2001 Gujarat earthquake, all the branches of Lijjat gave a total donation ofmore than Rs 4.8 million, including Rs 1 million from the central office. Lijjat built fortyhouses for the rehabilitation of the people of Bhujpur (Bhachau) in Kutch District. Project Source URL
  46. 46. Contributed by members of SECTIO 8PROBLEMS FACED BY LIJJAT PAPAD &THEIR SOLUTIOo The papads are prepared in different parts of India, the quality of the water usedusually varies, and so can the quality of final product. To prevent any inconsistencies, Lijjathas 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 June2001,three persons are arrested in this connection in Bihar, but the threat exists in theglobal market also. With increasing business and other advances, the need for information disseminationand communication among member sisters at various branches has increased. The monthlyregional meeting, annual general meeting, and All-India convention of branches are held tokeep the members aware of organization activities and strategies, and to discuss issues suchas quality maintenance, production rates, the handling of accounts, and everyday problemsto 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. egotiation 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. Project Source URL
  47. 47. Contributed by members of The solution adopted by Lijjat is to provide extra money to the bhaginis duringmonsoons to purchase kerosene lamps to enable faster drying of papads. Our suggestion isto hire an additional space during monsoon a central position near the depots, with kerosenelamps where the bhaginis can come and dry their papads. This will lead to higherproduction which can be exported.3) Another problem expressed by them is competition in sales of their detergents (Sasa) from established brands like irma. 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 sell 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. Project Source URL
  48. 48. Contributed by members of www.mbaguys.netFactors for Successo 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.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. Project Source URL
  49. 49. Contributed by members of SECTIO 9Conclusion The most interesting lesson managers can pick up from Shri Mahila Grihan UdyogLijjat 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 thesociety, which is their justified right. The ladies are brimming with confidence. Lijjat is an institution which has stood thetrial of time and tribulation and has achieved success because when basic managementprinciples and uncompromising quality consciousness are applied in conjunction withsound business principles, there can be only one way for the ladies of the Lijjat-a brighterand happier tomorrow, the pride and joy of fulfillment. Lijjat makes almost equal money for its entire people and makes just enough money. o one would become a millionaire by setting up another Lijjat. If this aspect of Lijjat’soperations is not very good news for machine and money-driven corporate owned bytycoons, the essential message that Lijjat’s success conveys has definitely fired theimagination of women and rural folks. In many parts of Maharashtra and Gujarat, locallymanufactured and marketed eatables are catching on. There is hardly any GO orvoluntary organization nowadays which does not try create employment and funds, small orbig, along Lijjat’s line. As a business house, Lijjat itself has been trying to rewrite its own success withanother product with varying degree of success. Grounded spices, Khakhra, black pepeerpowder, detergent powder and cake, Vadi, bakery products, wheat filthier are on Lijjat’smenu but Papad with a sales figure of Rs 288 crore remains at the top. Among similarventures which came a cropper are incense sticks, leather bags, Tiffin boxes andmatchsticks. But most promising among them is the chapatti division with six branches inMumbai. Here, the women come in to work at around seven in the morning and make Project Source URL
  50. 50. Contributed by members of www.mbaguys.netchapatti as they are prepared in homes. Packed Lijjat chapatti, four for Rs five, areavailable at retail shops in Mumbai. These centers also procure orders from hotels, officecanteens, etc. and the catering in Mumbai includes some big names from the hotel andcatering industry. ‘As the pace of life increases, little time is available to most people inmetros like Mumbai to cook their own food. There are good prospects for women formingsmall 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 Gumladistrict of Jharkhand. ext time there is Lijjat Papad on the table, you sure can see a Chandrasekhar orSuja’s dimpled fingers deftly roll out the crisp Papad. It is made with love and care, just likefrom their mama’s kitchen. Project Source URL
  51. 51. Contributed by members of www.mbaguys.netBibliographyWorld Wide from the Lijjat prospectusVisited Lijjat’s office. Project Source URL
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