Studying Labour Cooperatives with Lijjat

Papad
1

Definition of Cooperative:

A cooperative is an autonomous association of persons united voluntarily to meet

their common economic, social and cultural needs and aspirations through a
jointly-owned and democratically-controlled enterprise.

Values:

Cooperatives are based on the values of self-help, self-responsibility, democracy,

equality, equity and solidarity. In the tradition of their founders, cooperative
members believe in the ethical values of honesty, openness, social responsibility
and caring for others.

Labour Co-operative Societies:

Labour co-operatives societies are those which work for giving employment to the
group of labourers. The remuneration received after the work done is distributed
equitably among the labourers by organizing themselves into labor co-operatives.
Workers can do collective bargaining instead of individual bargaining.

Labour co-operative undertakes work in building construction, roads, factories,

irrigation canals, dam projects etc.

The labour co-operative societies take the contract for providing labour and
thereby eliminate the middlemen or contractors which increase their profit
margins. As a result, the labourer gets higher profits.

The labour co-operative societies are developed in the states of Punjab, Rajasthan,
Gujarat, Maharashtra, Haryana and Tamil Nadu.
Objectives Of Labour Co-operatives:

1. To impart skill training to members at reasonable rates and provides education.

2. To help in collective bargaining instead of individual bargaining.

3. Better working conditions for its members.

4. Better Payment of salaries/wages to its members.

5. To take the contract directly from Government or non-government organizations

so the workers are saved from exploitation.

6. To provide basic essential tools to members to carry forward the job.

7. Inculcate the habit of service in the members.

8. To eliminate the middlemen in order to give fair share of return on investment to

them on their day’s hard work.

Shri Mahila Griha Udyog Lijjat Papad

Shri Mahila Griha Udyog Lijjat Papad is a Women’s organisation manufacturing

various products from Papad, Khakhra, Appalam, Masala, Vadi, Gehu Atta,
Bakery Products, Chapatti, SASA Detergent Powder, SASA Detergent Cake
(Tikia), SASA Nilam Detergent Powder, SASA Liquid Detergent.

The organization is wide-spread, with it’s Central Office at Mumbai and it’s 69
Branches and 35 Divisions in different states all over India.

The organization started of with a paltry sum of Rs.80 and has achieved sales of
over Rs.300 crores with exports itself exceeding Rs. 12 crores. Membership has
also expanded from an initial number of 7 sisters from one building to over 40,000
sisters throughout India. The success of the organization stems from the efforts of
its member sisters who have withstood several hardships with unshakable belief in
‘the strength of a woman’. It has been registered under Societies Registration
Act, 1860 and got recognition from Khadi & Village Industries Commission as a
village industry.
Objectives of Lijjat:

 The main objective of Lijjat is to provide employment to women to enable

them to earn decent and dignified livelihood. Any women who can render
physical work to the organization without distinction of caste, creed and
color and agrees to abide by the objective of the organization can become a
member from the date on which she starts working.
 To get the work for the society and plan it in such a way that the women
labor will get regular employment.
 To get mutual understanding amongst women members, self service and
inculcation of saving habit among the women to be increased.
 To increase the dealings power of women members.

Organisational Structure of Shri Mahila Griha Udyog Lijjat Papad:

Every branch is headed by a Sanchalika or supervisors, for each centre to look after
the daily affairs and production of the branch. We have a Central Managing
Committee, which consist of 21 members out of, which we have 6 (Six) elected
Office Bearers i.e. President, Vice – President, 2 (Two) Secretaries and 2 (Two)
Treasurers.

Six Office – 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 – Treasurer

The cooperative form of organization has 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.
Core Value:

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

These concepts are completely and uniformly followed in the organization. The
organization has adopted the concept of business from the very beginning. It
believes Production of quality goods and at reasonable prices. It has never and will
not accept any charity, donation, gift or grant from any quarter. On the contrary,
the member sisters donate collectively for good causes.

The organization along with all its member sisters has adopted the concept of
mutual family affection, concern and trust. All affairs of the institution are dealt in
a manner similar to that of a family carrying out its own daily household chores.

But the most important concept adopted by the organization is the concept of
devotion. For the member sisters, employees and well wishers, the organization is
a place of worship to devote one’s energy not for his/her benefits but for the
benefit of all. In this institution work is worship.

How does it work?

The entire cycle starts with a simple recruitment process. Any woman who pledges
to adopt the institution’s values and who has respect for quality can become a
member and co-owner of the organisation. 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.

After a woman has signed the pledge form, which serves as her formal entry and
introduction to the formal working environment, she is considered as a sister-
member. The branch office normally operates from 6.00 to 10.30 am during which
time some sisters prepare the dough, while others receive ready papads from those
who had taken the dough home the previous day.

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 the storage areas as well as pick up
points for distributors.

Distribution and Exports:

The distributors pick up the quantity of papad they require and pay cash on
delivery because the organisation pay sisters every day. Since they have an
estimate of the quantity each distributor takes, they produce accordingly. This
ensures them neither stock inventory nor pay heavily for storage.

The cooperative have about 32 distributors in Mumbai. Each distributor picks up

an average of 100 boxes per day from the depot. This is where the job ends. The
organization is 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, first an advertisement in newspapers for the areas will be

given. Members from the marketing division personally go and check the godown
facilities and only on their approval do the distributors are appointed. A distributor
has to pay certain amount as deposit. Distributors have to pay final payment at the
time of delivery.

For example, they do not have any centre in Goa, but the organization have
appointed a distributor for that area to ensure that Lijjat papad reach Goa. The
communication with distributors is regular through monthly meetings where both
the party discusses their problems and also the issues that the organization may
have about quality, price, reach, etc.

The organization does 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.

The organization is 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 production begins. All
exports are done from Mumbai. Export production is of the same quality as daily
production. Again with exporters, the responsibility ends with delivery. At present,
30% to 35% 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.

Decentralization:

The Lijjat, have never shied away from sharing power in all of the activities. All
sister members of the institution are the owners.

Each and every member has the veto power. All decisions, major or minor, are
based on consensus among members. Any single member’s objection can nullify a
decision. Another important fact about the organization is that no male can become
a member and has voting rights.

Production is carried out not in one central location but in hundreds and thousands
of individual homes. The branch system ensures that every activity happens within
its own ambit. Testing for quality and packaging are done at every branch.

The branch is responsible for all activities from production to packaging to

collection and distribution of vanai (payment) and profit for its particular
geographical region.

Certain activities, however, are centralised. For one, all raw materials are
purchased in Mumbai and then distributed to the branches to ensure consistent
quality of Lijjat Papad.

The other centralized process is the grinding of flour. The organization own two
grinding mills, one in Vashi (Navi Mumbai) and one in Nashik (in Maharashtra).
Since the raw material is purchased in Mumbai, grinding the flour at their own
mills helps reduce costs. Pricing of the products is also done at the head office.
This price factors in the cost of raw materials, transport, taxes, distributors
commission, and profit percentage and so on.

Delivering Quality:

They proudly claim ‘consistently good quality’ to be their USP. From the moment
a new member joins, she is repeatedly told to make quality her mantra. At the
training session, sisters are taught to make the ‘perfect’ Lijjat papad. And every
member has absorbed the concept totally. It is evident in the fact that even without
modern machines, every consumer of Lijjat papad, wherever she is, gets the same
consistent quality of papad because every ben rolls the papad to the same
specification and every lot of papad goes through testing.

They get papad for testing from all centers everyday and if  any deviation is
found in the quality, for example, if the salt is less or more, etc, they immediately
intimate that particular centre to destroy the entire lot, even if amounts to a million
rupees worth of production.

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 rate. The 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 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 marketing, advertising
and exports departments.

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.

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 also makes the work more enjoyable. At the
workplace they are self-respecting, hard-working and sisterly to one another.

Achievements:

1. Received Award from Khadi & Village Industries Commission as

‘Best Village Industries Institution’.

2. The Economic Times Award given to the Institution for Corporate

Excellence “Business Woman Of the Year”
3. Received the “Best Village Industry Institution” award at the National
Convention on “Rural Industrialization”, held by Khadi & Village Industries
Commission along with Ministry of Agro and Rural Industries

Problems faced by Labour Co-operatives:

1. Lack of continuous work

2. Shortage of share capital

3. Competition from private sectors.

4. Lack of skill among members.

5. Lack of good and healthy working conditions.

Remedies:

1. Labour co-operatives must have skilled and unskilled kind of Jobs.

2. Labour co-operatives should be exempted from paying earnest money or

guarantee amount.

3. The machinery required for jobs should be provided to them on rental basis.

4. Assignment of work that is safe and perennial in nature.