A Diagnostic Study Report on Supply

Chain in Craft Clusters

Table of contentsChapter

no: Particulars

1 Primary Objective Secondary Objective

2 Introduction Economic Activities

Products available in the cluster

3 Description of present business process and supply chain

4 Value Chain Analysis

5 Intervention by NGOs and Govt. in the Burdhwan District

6 Problem identification

7 SWOT analysis

8 Conclusion

9 References

ObjectivesO Primary objective:To gain insight through a diagnostic study into

specialties, resources, environment, demography and specific realities of the targeted craft cluster

O Secondary objectives:• To study the existing and potential supply chain

formats of the clusters• To understand the value chain analysis• To be able to find out strength, weakness,

opportunity and threat in context of the targeted craft cluster

SodepurO It is a part of Panihati Municipality under

Barrackpore sub-division and North 24 Parganas district of the state of West Bengal.

O Economic activities: It is the hometown of great artisans of Indian

handicraft, The leather craft is also the only source of income

for many residence. Other occupation is agriculture

Product of the cluster

Problem facing

Raw MaterialMachinery and

Production

O Absence of Raw Material Dealer in the Cluster causes High Inventory requirement

O Intermediary dealers have monopolistic control over the Raw materials

O High Working Capital Procuring Raw Material from Tamil Nadu

O Low ProductivityO Inconsistent

FinishingO Low Quality of Raw

MaterialO Lack of Knowledge

and AwarenessO Major Operations

are ManualO Lack of Application

of Sophisticated Machinery

Products & MarketingDesign & Production

O Lack of Order from Exporters

O Low Participation in Local Market

O Absence of Direct Export Initiative

O Inadequate Exploring Alternative Channels of Marketing like trade fairs

O Minimum Machinery Application in design

O Lack of Knowledge in design diversification

O Man power requirement –• Inadequate skilled manpower

• Low Productivity• Low Wage Rate

• Remained a Traditional Family Business• Lack of Knowledge and Awareness

• Finance and working capital:• High Working Capital Requirement

• High Cost of Raw Material• Shortage of finance

Background of the Entrepreneurs and their Enterprises

• Market-• Technology-• Input available-• Innovative

capability

• Competition-• Skill base-• Financial

constraint-

• Skill-• Business

environment-• Market-• Input

available-

• Market-• Technology-• Input-• Innovative

capability

S W

OT

EXISITING FORMAT of

supply chain management

Source: Final DSR, leather cluster- kolkata

POTENTIAL FORMAT

IN SUPPLY CHAIN

Source: Final DSR, leather cluster- kolkata

Reasons for adapting the potential supply chain format

O Better support to the artisans

O Better financial help

O Larger exposure of the market demand

O Better supply chain

O More revenue

Behala Situated in South

West Kolkata

officially known as South Suburban

Municipality until it was merged with the

Kolkata Municipal Corporation (KMC) on

January, 1984.

O Economic activities:• Stores: Clothes, jeweler, electronic items,

sports goods, books and footwear can be found in stores from Taratala to Manton.

• Hawker:• Shopping malls and factory outlet

Products:Behala in West Bengal is known for Tangail

and Baluchari Sarees.

Problem facing

Absence of

support system

Market Dynam

ics

Financial

facility

City Econo

my

S

• Brand equity • Product diversification• Linkage with supportive Institute,

W

• Absence of marketing platform of state apex body• Infrastructure• Quality of dye

O

• Scope of product diversification• Website for cluster catalogue• Large volume of buyers- buying house, ITC etc.

T• Emergence of power loom• competition

Existing format in supply chain

Source: http://nopr.Niscair.Res.In/bitstream/123456789/627

0/1/IJTK%208(4)%20502-509.Pdf

VALUE CHAIN ANALYSIS

SOURCE:

Burdhman district

O Economic activities: Agricultural based economy

Known for hand-woven fabrics, textiles and sarees,

Cooperative, consortium encourages waiving, Many people specially women are placed at the

cottage industry.

Products : dupattas, stoles, sarees and dress materials.

Problem

facing

Labor problem

Quality of raw

material

Delay in supply raw

material

competition

-Product development-Human resources-Financial support

-Raw material supply-absence of alternative

marketing channel-labor problem

-Scope for product diversification-exposure visit- Geographical

Indication

- Competition

-decline demand

- Increase demand for low cost power loom

products

S WO T

Existing format in supply chain

Source:: http://nopr.niscair.res.in/bitstream/123456789/6270/1/IJTK%208(4)%20502-509.pdf

Existing format of the supply chain

REASONS FOR IMPLEMENTING THIS PROTENTIAL FORMAT

O • Removal of the mahajan system

O • Better revenueO • Organized supply chain formatO • Artisans gain better

knowledgeO • A consortium gives a better

exposure and helps the artisans in gaining the raw materials at a lower cost. It helps in getting them a better exposure too

Value chain analysis

Source:

NHDCO National Handloom Development Corporation Limited

(NHDC) was set up in February 1983 as a Public Sector Undertaking by the Government of India.

O MISSION : To be a National Level Agency for the promotion and development of the Handloom Sector.

O OBJECTIVES:

1. To carry on in India or elsewhere, the business of buying, stocking, marketing or otherwise controlling the distribution of all types of yarn for the benefit of handloom sector.

2. To procure, stock distribute and sell all types of raw materials, dyes & chemicals needed by the handloom sector.

Role of NHDC IN SUPPLY CHAIN:

O Specialty of cluster. Objective is to reduce raw material problem, now

the 60% supply through Govt. contribution and 40% cluster by

consortium.

Burdhaman Handlooms developers and producer’s private ltd,

O It is a consortium.

O No of members are at least 10 to make the facility center, with facility centre consortium form.

O One cluster is made of 150 people, consists of 200*10 = 2000 artisans work on daily basis.

O Finish product – traditional tangi sarees.

O Main season for the product- 3-4 months before Durga Puja upto 1 month after puja. Other seasons of demand are – local and international fairs for marketing, Bengali new year.

Getting the order

Getting the finish product

Distributed to Tantuja, and

sometimes to NHDC

1.Gets the order from Tantuja and raw

material from yarn bank , NHDC.

2. Distribute the order to common facility centers,

3. Common facility centers distribute the

order to self improved waivers.

Gram kalan gram samabay samity, samudragar

O It is a cooperative,

O No of members are: 394. Product line: saree 100% cotton, tangai, Stoll is only for export.

O Role of the cooperation are: business performance, services to the members, planning for future way of extension, to help earning of waivers.

Supply chain -

Raw material : source from NHDC, at the rate of 6 % reimbursement duty benefit on tax. Problem facing in raw material: quality, delay in supply of raw material. If raw material collect from other source they have to pay much more than NHDC charges.

O Getting duty drawback in distribution

O It is a part of Panihati Municipality under Barrackpore sub-division and North 24 Parganas district of the state of West Bengal.

O Economic activities: It is the hometown of great artisans of Indian

handicraft, The leather craft is also the only source of income

for many residence. Other occupation is agriculture

Product of the cluster

Problem facing

Raw MaterialMachinery and

Production

O Absence of Raw Material Dealer in the Cluster causes High Inventory requirement

O Intermediary dealers have monopolistic control over the Raw materials

O High Working Capital Procuring Raw Material from Tamil Nadu

O Low ProductivityO Inconsistent

FinishingO Low Quality of Raw

MaterialO Lack of Knowledge

and AwarenessO Major Operations

are ManualO Lack of Application

of Sophisticated Machinery

Products & MarketingDesign & Production

O Lack of Order from Exporters

O Low Participation in Local Market

O Absence of Direct Export Initiative

O Inadequate Exploring Alternative Channels of Marketing like trade fairs

O Minimum Machinery Application in design

O Lack of Knowledge in design diversification

O Man power requirement –• Inadequate skilled manpower

• Low Productivity• Low Wage Rate

• Remained a Traditional Family Business• Lack of Knowledge and Awareness

• Finance and working capital:• High Working Capital Requirement

• High Cost of Raw Material• Shortage of finance

Background of the Entrepreneurs and their Enterprises

• Market-• Technology-• Input available-• Innovative

capability

• Competition-• Skill base-• Financial

constraint-

• Skill-• Business

environment-• Market-• Input

available-

• Market-• Technology-• Input-• Innovative

capability

S W

OT

EXISITING FORMAT of

supply chain management

Source:Final DSR, leather cluster-kolkata

POTENTIAL FORMAT

IN SUPPLY CHAIN

Source:Final DSR, leather cluster-kolkata

Reasons for applying the potential supply chain format:

O • Removal of the mahajan system

O • Better revenueO • Organized supply chain formatO • Artisans gain better

knowledgeO • A consortium gives a better

exposure and helps the artisans in gaining the raw materials at a lower cost. It helps in getting them a better exposure too

Case study

A diagonostic report on cluster development programme of shantipur handloom cluster, nadia, west bengal

HIGHLIGHTS OF CASE STUDY

Introduction of shantipur cluster

Small town of nadia district Comes under ranaghat sub division Known for jacquard sarees and dhoti Exporter since 17th century Gangajamuna, nilambri, rajmahal

Advantages of cooperative model over traditional model

O More integrated process flowO Better organisational infrastructureO Cost effective technologyO Lack of direct participation of share

holder in administration

conclusion

O The craft cluster study has helped us in gaining immense knowledge about the various Indian crafts and the working conditions of our craftsmen.

O We were able to interpret various problems faced by the people working in this field. Personal interviews helped us understand the social, economical and cultural variations. The craft industry is on its verge of extinction due to various factors. People are oriented towards machine made products as compared to hand made items. Other than that, the workers are payed very less wages. We are of firm belief that the government should take quick action in stabilizing the condition and help the workers financially.

bibliographyO JournalsO DIAGNOSTIC STUDY REPORTFORLEATHER

GOODS CLUSTER, SANTINIKETANO Diagnostic Study Report onImplementing

BDS in theKolkata Leather ClusterO Diagnostic Study of the Handloom Cluster of

Burdhwan District, Under the IHDC Scheme

O WebsitesO http://nopr.niscair.res.in/bitstream/

123456789/6270/1/IJTK%208(4)%20502-509.pdf