lijjat - case study

1SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD

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Case - Lijjat Papad- About the organization

Owned by Shri Mahila Griha Udyog Lijjat Papad

Based on the Gandhian concept of trusteeship or Sarvodaya

In 1966, registered under Bombay Public Trust Act, 1950 & Societies Registration Act, 1860.

A Village Industry Unit under ‘Processing of cereals & pulses industry’ group.

3 LIJJAT MASCOT

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Case - Lijjat Papad- About the organization

Objective – Provide employment to the ladies to enable them to earn a decent & dignified livelihood

Profits/ Losses are borne by all the 42,000 sister members collectively.

Total turnover – Rs. 315 crores, inclusive of Rs. 12 crores of Exports

Competitors – MDH, Bikaner, Saktibhog

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Organizational Structure

A Central Managing Committee

Branches are headed by a Sanchalika

Management Committee’s approval required for starting a new project or activity.

Divisions – Marketing, Advertising, Sales Promotion & Exports.

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SMGULP – Management Committee

President : Smt. Jyotiben J. Naik

Vice President : Smt. Kamalben D. Dhandore

Secretaries: Smt. Sunandaben R. Belnekar

Smt. Gangavatiben H. Naik

Treasurers : Smt. Mansiben S. Sawant

Smt. Kshamaben M. Sutar

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Lijjat Philosophy

Concept of Business.

The concept of Family & Devotion

Never accepts donation, charity, gift or grant from any quarter.

Donation for the affected families of Tsunami (25 lakhs to CM Relief Fund), Earthquakes in Latur and Bhujpur were provided from the contribution of sister members.

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Case - Lijjat Papad- About the organization

Awards & Accolades

Best Village Industry 1998-99, 2000-01 & 2003

ET Award of “Businesswomen of the Year” 2001-02 for Corporate Excellence

Featured on BBC World in the programme “Business Bizarre”

A Six Sigma Company

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Product Range

Besides Lijjat Papad,

Lijjat Bakery products, Lijjat Chapatis

Lijjat Gehu Atta, Lijjat Khakra.

Sasa Detergent powder and cake

Grounded spices, Black Pepper Powder, Wadi

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Variants for Lijjat Papad

ITEMS Small Size 100 gms (Rs.)

Mini Size 200 gms (Rs.)

Small Size 200 gms (Rs.)

Big Size 250 gms (Rs.)

Small/ Big Size 500 gms (Rs.)

Small/ Big Size 1kg. (Rs.)

Small/ Big Size 2.5kg(Rs.)

UDAD with Pepper

10.00 18.00 18.00 23.00 42.00 82.00 198.00

UDAD with Garlic – Chillies

10.00 18.00 18.00 23.00 42.00 82.00 198.00

UDAD with Red Chillies

10.00 18.00 18.00 23.00 42.00 82.00 198.00

Moong (50% Udad & 50% Moong)

10.00 18.00 18.00 23.00 42.00 82.00 198.00

UDAD Special 11.00 21.00 21.00 25.00 47.00 91.00 222.00

MOONG Special (50% Udad & 50% Moong)

11.00 21.00 21.00 25.00 47.00 91.00 222.00

Punjabi Masala Special

11.00 21.00 21.00 25.00 47.00 91.00 222.00

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Production

63 branches, 40 divisions all over India;16 Branches in Mumbai & its suburbs.

Head office at Bandra

Raw material purchasing is centralized to keep uniformity in tastes

Own laboratory in Mumbai to test & code the final product.

Compulsory for each sister member to roll 3 kgs of papad everyday.

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Production

Branch Office normally operates from 5:00 am to 10:30 am

On an average, papad rolling members can roll 1.5 to 2 kg of papad per hour

Production costs borne by the papad rollers.

Intentionally no introduction of any kind of technology for production of papads

30-35% of production is exported to UK, US, Japan, Europe, Australia, Middle East etc.

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Marketing & Distribution

Each branch markets its own products in the allotted area

Centralized Marketing Office

Advertising in vernacular newspapers, television & radio

It attends the trade fairs which are organized/ promoted by the KVIC

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Marketing & Distribution

Wide network of Dealers & Distributors & excellent Goodwill

Upfront deposit: 25,000 to 2,50,000

Dealers Commission – 7%

Retailers Margin

-Rs. 2.25 per 200 grams sold at Rs.14

-Rs. 26 per 2.5 Kg. sold at Rs. 150

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Finance

Accounting year from 1st April to 31st March

Sales for papad – 11.81 crores (Audit report 2003-2004)

Purchase of Raw Material exempt from tax

Papad as a product is exempt from Sales Tax.

It gets an interest subsidy from the KVIC

The organization seeks financial assistance from Bank of India, Bank of Baroda, Dena Bank and KVIC

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Human Resource

Workforce – 42000 women

Organization is by the women, of the women & for the women

Sign the Pledge Form to become a member.

Interaction through Area Meetings, AGM’s & All India Convention

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Human Resource

Woman of any caste, creed, colour, who can render physical work can become a sister member

Minimum age should be 18 years

Training for new members is on-the-job for 15 days

Allotment of work decided by sister members by consensus

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Human Resource

Payment, called ‘vanai’ made straightaway; average monthly ‘vanai’ for each sister member is Rs-2000 to Rs.3000 for roughly 6 hours of work.

For 1 kg. Papad rolled, Rs.70/- paid as ‘vanai’

During Festivals & special occasions, ‘extra vanai’ is paid to the sisters.

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Welfare Facilities for the ‘Sisters’

Minibuses to come to the branches everyday

Preventive Health Care programmes

Compulsory primary education for all sister members

Scholarships or Grants to the dependents of the sister members

No Retirement Benefits

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Corporate Social Responsibility

Give - back policy

Rehabilitation of Chincholi, Latur & Bhujpur

Draught Relief Work

Participation in Asha Dhan activities

Tsunami Donation

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Lijjat – Critical Success Factors

Merging of Ownership with Membership

Consistent quality of the product

Informal Work Environment

Make Leaders out of ordinary women

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Threats to Lijjat

Fake Lijjat papads in market.

Fast growth has caused few state governments to withdraw tax exemptions

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Future Plans

Expansion of production facilities and establishment of new facilities to cope with the increasing demand.

Diversification will be looked at, if:

- proposal for the same is put forth by a sister member or well wishers

- the idea can generate jobs on a large scale