Business Case Studies
Posted 08 Aug 2019, Editor's Desk
Lijjat Papad Company was started in South Mumbai by seven women on 15th March 1959.
They started preparing papad at an operational cost of Rs. 80 and made a profit of 50 paise.
They kept on increasing their manpower (which included only women).
Lijjat Papad Company did not have an owner; they made everyone an owner. This is called cooperative movement.
In cooperative movement, if there is a loss or a profit, it will be for everyone. So, let us study some of the vitals of the Lijjat Papad business.
Empowerment of Women
Lijjat Papad Company has encouraged the housewives to use their cooking skills and become the owner of an organization. These women started earning between Rs. 10,000-15,000, which lead to the empowerment of women from a disadvantaged background.
Lijjat has provided respect to women. Some of the women of Liijjat were able to make their children study in AIIMS and IIT. The women working in the Lijjat Papad Company are called Lijjat sisters.
Built a Strong Channel
Every day, Lijjat sisters are picked up by a Lijjat Papad Company bus from their homes to the Lijjat branch center, which has three windows:
(i) Deposit Window
At this window, the Lijjat sisters deposit the Papad made by them. After receiving the Papad, a quality check is done and the Lijjat sister receives a deposit slip.
(ii) Payment Window
Lijjat sisters show the deposit slip at the payment window and get their daily wages.
(iii) Collection Window
At this window, Lijjat sisters get the kneaded dough to make more Papad.
After collecting the dough, the Lijjat sisters get back into the buses that drop them at their homes.
The Branch head of a Lijjat Papad Company center is called “Sanchalika”. She gets the full training from the company and an aluminum rolling board.
This rolling board is standardized. It keeps the shape, size, weight, and thickness of a Papad standardized.
Standardization in the Papad is the reason why 4.8 Billion Papads made by 45,000 Lijjat sisters all over India have similar tastes.
The Cooperative Movement triggered by women entrepreneurs led Lijjat Papad Business to spread their legs to 82 branches in 17 states of India. Today, they export papad worth Rs 80 crores in 25 countries. They have a turnover of Rs. 1600 crores.
They have also come up with different products like masala, Mirchi, soap, detergent, and readymade chappati.
They are able to expand their business because of their stringent sourcing policies.
They maintain standardization in their raw materials like asafoetida (heeng), black pepper (kali mirch), and urad dal by bringing them from specific places.
They never use machines for making Papad. Whenever they need to expand, they increase the number of Lijjat sisters.
They distribute the profit among the Lijjat sisters. They have a profit-sharing model.
As a result, they are able to bring unity among the Lijjat sisters and are ready to work extra for the company.
Lijjat Papad Company has strong foundational policies. It has 0% gossips and 100% transparency policy.
In this policy, whispering and politics are not allowed and if someone wants to say anything then they have to say it aloud.
As a result, a common purpose and vision are designed for the empowerment of women for poor communities to increase their economic participation.
Octogenarian Jaswantiben Jamnadas Popat is the co-founder of Lijjat Papad Company. If she had wanted, she would have become the owner of the billion-dollar company.
But, she wanted to empower the women and give them respect so that they can make their children study.
From starting, the business model of Lijjat Papad Company is business-oriented instead of NGO oriented.
They have a sound foundation of accounts and finance. They have focused on sales, marketing, branding, and promotion from starting.
They have standardized the sourcing and the quality, size, and shape of the Papad.
They have never accepted donations instead they have given donations. They want to keep their cash flow statement positive.
So, they keep their accounts and finance so strong that they have never taken supplies on credit and they make the payment of suppliers instantly.
Also, they have never given goods on credit to their distributors. They take instant payment from the distributor. They make daily payments to Lijjat sisters.
The growth of the Lijjat sisters is also very transparent. They join as a roller and then gradually go through various departments to become the Branch head.
After promotion, the Branch head is posted to the corporate office of Lijjat Papad Company in Mumbai where she becomes a member of the committee. This committee has 21 members who govern the whole business.
Among these 21 members, some become the treasurers, some vice presidents, and some presidents.
This committee conducts weekly and monthly review meetings- branch wise, department wise, division wise, and product-wise.
Lijjat Papad Company also has a quality control team branch wise. One member from the quality team visits the home of Lijjat sisters to ensure that they are using all the quality parameters while making the Papad.
The coming period is not good for Lijjat Papad Business because today is the time of innovation, automation, process orientation, and Blue Ocean.
Any big businessman can purchase machines for rolling and making Papad with the help of only 450 women.
He can give growth, promotion, incentive, and training to the talented manpower and can make Papad at high speed and grow the business rapidly through a scalable model.