Lijjat - A Women’s Enterprise with a DifferenceIntroduction his case study highlights the growth of the Shri Mahila Griha Udyog Lijjat Papad (popularly known just as Lijjat) over a period of four decades. Lijjat is an endeavour managed solely by women which has attracted worldwide attention. The prime reason for its success can be attributed to adherence to some core principles and practices by its members and by following a simple process of manufacturing with great stress on maintaining quality. The study traces the evolution of Lijjat from a tiny endeavour of a group of women to its present scale of operations and attempts to develop an understanding of the underlying factors that contributing to its phenomenal success as well as the scope for replicating such models or processes in other sectors for generating sustainable livelihoods. Lijjat is an atypical model since the members believed and practiced principles of co-operation and collective ownership from the very beginning and in the process built an institution that could compete and survive in a fiercely competitive market on its own strength. We are conditioned to expect that cooperative economic ventures must have an in-built element of subsidy, at least in the initial stages (e.g. NDDB and the milk revolution, or even sugar production). However, Lijjat's success is entirely without any official support or subsidy. It is also noteworthy that the venture began without any external agency or promoter. It was the upscaling of a cottage industry by a group of completely untrained and semi skilled women. These several factors make Lijjat an unusual and a typical livelihood model. The fact that Lijjat not only helped its members attain a steady income but also indirectly contributed to their empowerment, which makes it unique among all the cases, studies in this series. Case Methodology In order to understand the process and its impact, the following methodology was used: • • • • Discussion with the key officials at the headquarters of Lijjat as well as in the branches Semi-structured interviews with the members Sharing of preliminary findings with Lijjat functionaries to check the veracity of the conclusions drawn Study of the secondary material on the organization Based on the above, inferences were drawn about major learnings from the intervention and the potential for replicating it in other areas. Process of Intervention Lijjat Papad is a highly decentralised enterprise where the production process is broken up into several self-contained steps which engage a large number of women with low skills using their homes as a work place. Seven women initiated the venture in 1957 to earn additional income through the use of their idle time. Even though these women made initial losses, they persisted in their operations using ingredients from their houses. Their low overheads and attractive 1 including the exports. the branch does not open for work the next day till the accounts are finalised. This paucity of space forced the Lijjat sisters into their single most innovative production decision.prices rapidly created a demand for their product. Despite the effort required to achieve this level of updation through a largely manual system the exercise is treated as a routine and not exceptional. Thus was born. Marketing was ensured through seven sales offices across the country. A daily record of sales and payments is maintained and a statement of accounts is prepared every evening by the accountant and vetted by the Sanchalika 1. the practice of equal profit sharing among the group. With the profits of the first six months. The strategy of identifying commission agents and cash only sales resulted in ready availability of funds in the business rapid and continuous growth. Papads were prepared at home premises using a simple technology through rolling and drying. As the scale of operations grew. The quality check of the papads was done by experienced members in the branch on the spot at the time of delivery through visual inspection and the rejection percentage was intimated and recorded. machinery or overheads. This enabled the group to respond to the growing demand without having to invest upfront in workspace. Even today. more and more women entered the production process and the number rose to 25 within three months. if the accounts are incomplete. with a keen eye on every detail leading to high quality standards and timeliness. At the end of each month a profit and loss account as well as balance sheet has to be completed. Lijjat has also geared up towards changing times and explored new markets. at one stroke. each of the members of the group bought 5 grams of gold. again unconsciously. This has given a tremendous sense of discipline to both workers and managers alike and has evolved to the level of an ethic. printing and 1 The woman heading the branch is called the Sanchalika. Another innovative and strong aspect is the system of accounting. the physical capacity to produce papads dramatically multiplied. Thus. more and more in-house divisions were formed . grinding masala. In addition to streamlining the production process as described above. This is the standard operating practice of Lijjat Papad even today. Lijjat also carved out a market niche for itself through systematic brand building over the years. The new model of decentralised production was simplicity itself. Payment for the production was made the following day to each member. but by the third year the physical space required for rolling out the volume of papads in demand was simply not available. irrespective of their individual contribution. As demand increased. The prepared papads were then delivered to the branch office the next morning while another batch of pre-mixed dough is collected for the next day production. Additional rooms and space were rented as and when required for rolling and drying papads. Over time the intervention kept expanding horizontally. This was a significant decision to decentralise the production of papads from a centralised location to the homes of the members of the group.processing of flour. 2 . Thus a systematic production process evolved. whereas word of mouth publicity combined with good quality and attractive pricing created an ever increasing demand for the product.70 approximately. The days that she is not allotted packing duty. which is about 15 minute ride on the bus run by Lijjat enterprise. Lijjat also expanded into producing and marketing other products. such as powder detergent which have become fairly successful. from a one stop organisation which completed all processes under one roof.70/-. She has also become a Lijjat packer for the past nine years. Thereafter she goes to the Bandra centre. Gaura Bai's husband is a daily labourer who earns less than Gaura Bai.A Lijjat Sister's Story Dharavi supplies papad to 5 Lijjat centres in Mumbai.m. Gaura Bai Wadkar is 32 years old and lives in a jopadpatti in the Dharavi slums. but feels she is not educated enough to be in a decision making position and is not in a position to give time to educate herself. the organization today has 63 branches and 40 divisions spread out in 17 states of India. while its low cost model kept competitors from eating into its market share. The mode of replication is also highly systematic. she rolls papad daily. she gets around Rs. A few experienced members physically relocate to the city or site of the new branch.30 a. when she cooks for the day. Gaura Bai. Lijjat scaled up its operations through a strategy of replicating the standard operating structure and procedures of the Mumbai model in other parts of the country. On other days. Her appearance testifies a life full of activity and work combined with an air of quiet competence and efficiency. Gaura Bai takes home 5 kgs of prepared dough which takes her 4 hours to prepare. On days of packing duty (which is about 4 times a week) she is engaged in packing until 10 or 11 a. The average monthly income is around Rs.polypropylene packing were formed one by one. Scaling up Strategy From an initial membership of 7 women in Mumbai. This is because she is busy in the Centre till 11 AM in the morning.m. She would love to be in a managerial position in Lijjat. 3.m. The need for expansion was caused by a "demand pulli. Again. she takes home 3 kgs of dough for rolling the papads. In addition. She has to devote around four-to five hours daily to roll the papads. due to irregular employment. allowing her to send both sons and daughter to school.000 women across the country. She feels that her association with Lijjat has helped her in own self development. the quantum of which depends on her engagement in packing at the Centre. On such packing duty days. the organisation today boasts of a membership of around 42. she picks up dough and gets back home by 6-6. Her day begins at 4 a. The decentralised production model enabled Lijjat to rapidly respond to market demand. Gaura's papad rolling has brought a stable income into her home.000. 3 . Packing fees are generally worth 5-6 kgs of dough which is around Rs. Punjab. where affinity and perhaps more responsive for growth and diversification than a conscious scaling up strategy. The strong concentration in Mumbai. Haryana. Due to their consistent high quality. selecting and training core staff. If one or more of the team members deputed from the head office need to return to Mumbai before the systems are fully functional. 11 in the rest of Maharashtra and 12 in Gujarat. thereby ensuring that quality inputs are used in its production processes. The attempt was to use 4 . This is the key to the high level of standardisation that Lijjat has been able to achieve. The remaining 23 branches are spread across the states of Andhra Pradesh. The Khakra division set up in 1974. This led to the opening of more branches. This handholding period generally last up to 6 months but can continue till such time the new unit is able to run its own affairs efficiently. Uttar Pradesh and West Bengal. new volunteers replace them to complete the job. Besides its branches in several parts of the country it has also established its own support divisions catering to most input supply and output packaging needs. Maharashtra and Gujarat reflects the origins and growth of the organisation as a natural progression of sorts. The brand recognition of Lijjat was also used periodically into both related and unrelated product. Rajasthan. Members are deputed to fan out and are given the responsibility of ensuring proper functioning of the unit. the demand for Lijjat products far outstripped its supply. Lijjat is an excellent case of in-built expansion and diversification of a successful livelihood strategy. where operations were concentrated and then later in other parts of Maharashtra. Tamil Nadu. reasonable pricing. it nurtures additional branches in a similar manner. Gujarat and other states. 17 being in Mumbai and its suburbs. When the new branch stabilizes. Madhya Pradesh. Jharkhand. Jammu &Kashmir. In the first 7 years of its existence (1959 to 1966) Lijjat functioned as an unregistered organisation. This can last for a period of several months. In 1966-67 it was registered as a public trust and recognised by the Khadi & Village Industries Commission (KVIC) for tax breaks and interest subsidies. Yet the professional manner in which it was managed by women without any formal training in running an enterprise reflects on their motivation and self-learning abilities. This in essence is the basic manner of branch expansion. Delhi. Largely by virtue of word of mouth publicity of the home fresh nature of the product and the authentic cottage nature of the enterprise. first in Mumbai city. Today Lijjat has 62 branches. The allied divisions include dal and flour mills. regularity and reliability of its supply chain. Some go-downs were also constructed to support logistics. It also supports the notion that entrepreneurship is an acquired asset and need not always be attained through formal learning processes. masala division in 1976 are some of the related examples of diversification of the Lijjat enterprise. Karnataka. It also reflects on consumer dietary preferences in the region which Lijjat was able to identify and exploit successfully. Kerala. Thus. the in-house method of expansion through replication ensures both training and hand-holding support to new units. Bihar. Orissa.The team goes through a checklist that includes finding adequate premises. Lijjat's papad slowly began to occupy a market niche. which contributes to sustaining quality. training new members and establishing the physical and financial systems. flour mills in 1975. However. Lijjat has engendered democratic principles through member participation as part of its administrative culture. SASA is another example of innovation and responding to market needs. the most successful diversification was the production of detergent. The Lijjat detergent brand. SASA. In this respect Lijjat was much beyond just an entrepreneurial venture. 310 crores. SASA has 6 production units. Marketing of Lijjat products is supported by advertising division. these products did not succeed in the same manner as the papad venture. The women not only take day-to-day decisions. Many women who had little 2 Technically this income is in the form of profit sharing for all women of a centre/branch. a research and quality control division and a sales and purchase office.000 women in 17 states of the country. seven sales offices and the export division. there were failures such as leather and production of matches. 5 . to take on greater responsibility and develop a sense of self-worth and self-esteem. It relied on the goodwill for the Lijjat brand to carry these products forward but did not factor in the much bigger competition and cut¬throat marketing and advertising efforts that other competing products in these categories could muster.32 crores while the annual profit for the year are Rs. However. In other unrelated diversification choices. Recently. This account for the easy acceptance of the work among such a large number of women since they feel their economic activity will not disrupt the family by their absence.the positive brand image of Lijjat papads to push other food products. Impact of the Programme The impact of the enterprise can best be understood by the outreach that Lijjat has been able to attain over these years. it was a symbol of women's strength. the accumulated profits of the Lijjat enterprise stand at Rs. This reflects another strong element of learning involved in the enterprise and can be compared with many larger organizations that devote considerably greater resources to these aspects. Both had to be closed down as these turned out to be unviable. Lijjat has ventured into the supply of chapattis in Mumbai. The average monthly income to each worker is Rs.54 crores. has met with tremendous success. According to the Annual Report of 2003-04. Lijjat has been a vehicle of social empowerment for these women as also benefiting them financially by providing them sustained returns for their work 2. 48.3000/¬ The decentralised production methodology has ensured that the women do not have to leave their homes for work and allows them flexible working schedule enabling them to discharge other household responsibilities. Lijjat has a membership of around 42. Men are also less hostile to women working at home for extra income than travelling to a workplace. largely because Lijjat was not able to independently promote them through a focused marketing effort. but also elect members to the management committee from among themselves. This was achieved on an annual turnover in 2003-04 of Rs. Occupying a niche in a highly price sensitive market without the advertising blitz associated with larger brands. 6. These women were actually helping each other to grow beyond the confines of their homes. Some initial guidance. nor for the rich onesi (Basic Philosophy and Practices of our Organisation. One institution involved in promoting the growth of Lijjat was the Khadi and Village Industries Corporation (KVIC). which in effect laid the founding principles of Lijjat Papad. a community elder and social worker. in itself a highly laborious and time consuming undertaking. Women & Empowerment. It is an articulated working philosophy that the organisation is "neither for the poor sisters. It reiterates the now widely held belief that the poor are highly entrepreneurial and only seeking an enabling environment to realise their potential. Lijjat is a voluntary organisation with collective ownership and trusteeship being practiced. Its pro-poor bias is part of its institutional genetic code. quoted in EPW. Malathi Ramanathan. The other unique feature in Lijjat is that it has remained a member owned and managed body resisting the rise of a small managerial elite that normally takes control in all such institutions as they grow in size. which recognised the value of Lijjat's work and registered it under the 'Processing of Cereals and Pulses Industry Group'. and went on to organically grow in size. He advised these women on how to translate core Sarvodaya values into working principles. it retained its essential character in spirit and in practice all through. Role of Institutions The most remarkable aspect of Lijjat is the absence of an outside agency in kick starting the enterprise. This makes Lijjat one of the most equitably owned and managed enterprises operating at this level.formal education were handling money and banking transactions and managing a business of around Rs. April 24. Targeting and Equity Issues By the nature of its work and philosophy. 6 . was provided by Chaganlal Karamshi Parekh or Chaganbapa. What is even more important is their sense of ownership of the enterprise and the role that many of them play in management. 300 crores annually. It also accounts for its 3 Jaswantiben Popat. Since only women from the lower income groups are actually willing to do the work of rolling papads. Lijjat evolved into an institution based on some core principles strictly adhered by the members and simultaneous development of simple systems and processes. In the process. It is truly a homegrown model based on the intuitive intelligence and self-learning skills of a small group of poor women. Shri Mahila Griha Udyog Lijjat Papad. 2004. the nature of the activity makes for a self-selection among the economically active poor. Lijjat is a self-targeting enterprise.Lijjat Press 2004) 3. understood and practiced diligently by all members. Symbol of Women's Strength. It is equally remarkable that while the venture began on a very small scale. under the KVIC Act which helped them to access cheaper funds from banks and enjoy tax benefits. There is also self-selection in terms of women with a somewhat entrepreneurial aptitude since the earnings are both in the form of both in the form of wages and shared profits. This helped Lijjat become a highly effective livelihood intervention which also promoted economic and social growth and mobility of its women members. She is associated with Lijjat from 1971 when she started rolling pappads at the age of twelve. Smt. Even today Jyoti goes to a branch at 4 am 2 or 3 times a week. she has been taking higher responsibilities in the organization and rose to rank of President. equality and mutual respect. She got additional work in Lijjat through her deputation into the packaging section. direct marketing efforts and undertake planning and strategic decisionmaking functions. Kamal Bhandore and the Sanchalika Mulund were going to Pune as the Pune Sanchalika had lost her husband and they wanted to condole his demise. From then onwards. also become the Editor of the Lijjat Patrika. she managed four siblings at home. attesting to the value the organisation puts on her increased responsibilities. Only women could be members and thus owners of the organisation. which in turn made her Vice President in 1989 and thereafter rose to rank of President. Her long years with Lijjat have given her a huge wealth of intuitive institutional knowledge. comes to the head office at 10 am and often stays till 7-8 pm in the evening for all seven days. Despite tragedy of untimely demise of her mother in 1976. the VP. Jyoti's income is equivalent to the value of 30 kg of rolled papads a day. or "sister workers.only seniority within a sisterhood . There is a collegiate atmosphere in her chamber as she confers with the VP and local Sanchalika discussing issues that in other organisations of such size would be the preserve of male. 7 . Jyoti ben. she was rolling papads and managing Lijjat packaging section and in the process continued to earn well. when she was in charge of stores. English speaking professionals. Without proclaiming themselves as icons of gender equity. Jyoti is in touch with Sanchalikas over phone daily across the country ironing out administrative details. She started managing inventory at the Bandra branch in 1973. Simultaneously. Lijjat fosters a strange sense of dignity and equality among the women as all have risen from the ranks. There is no organisational elite at Lijjat . Jyoti was transferred to the Vadala branch in 1981 as Sanchalika.” The perspective of equity was also strongly present in Lijjat's organisation and functioning. with strong shared ideals of collectivity. She had to discontinue her education after class X as the demands on her time were too high. Later she became member of the Central Committee. In fact the women refer to their co-sharers as "sisters”. preparing and packaging papad dough. Thus. The other important learning in this regard is the fact that women have an innate ability to adapt to new roles. The member sisters had started sharing the profits or losses among themselves from the start. Women who began by rolling papads went on to establish new branches. the Lijjat members have demonstrated that it is possible to run a profitable commercial enterprise entirely for and by women. As is the practice of paying on basis of papad rolled. which is a reflection of a collective decision. This adaptability has enabled Lijjat to achieve a virtually frictionless transition from a cottage to a large-scale enterprise.bound together by hard work and almost similar class background. responding to queries and monitoring supply and production figures. upper class. looking after stocks. serve in management positions. Thereafter. The next day. "Sab papad belne wale hai” (all the women are those that would roll papad). Jyoti Naik-An Epitome of Women Empowerment Jyoti Naik is the eldest of the family of four brothers and sisters.rapid expansion and growth. Lijjat believes in running its business with acumen and professionalism on its own resources. It is also noteworthy that there is no organisational elite at Lijjat -only seniority within a sisterhood . Another significant aspect of marketing in Lijjat has been the decision to export its products. but must also have to be erstwhile members who rolled papads. Lijjat adopted strictly commercial techniques from the very beginning. which was used for expansion of existing branches. It appointed agents on a commission basis for marketing its products. The organisation scrupulously rejects charity and grants. is a slogan truly lived in practice. Financial Linkages One of key factors to Lijjat's success in terms of outreach and rapid scaling up is the policy of internal generation of resources and rotating working capital on a weekly/biweekly cycle. such as the president and secretary. The branch office is responsible for setting a target for monthly production and the marketing. irrespective of their position in the organisation. Lijjat has grown and prospered with its strategy of forward and backward linkages. The setting up of various divisions for its input supply and output packaging needs has contributed to 8 . Marketing is on a strictly cash-and-carry basis. KVIC had extended loans of Rs. Strong shared ideals of collectivism. 8. borrowings from KVIC were resorted to as and when required. Marketing is a centralised function in Lijjat. all the members share the losses equally by reducing their rolling charges. Lijjat's export revenue in the year 2003-04 was 9 crores. Each Lijjat centre has a clearly delineated marketing territory to avoid competition amongst centres. establishment of new ones and for purchase of equipment for the masala unit in Mumbai.94 lakhs under the 'Processing Cereals and Pulses Industry Scheme'. This model of power sharing is unique and puts Lijjat virtually in a class of its own in respect of equity.All members. to tide over short-term cash deficits. Marketing and Technology Linkages In a pragmatic departure from the accepted practice of cooperative endeavours to rely on official marketing outlets or on other semi official organisations (such as KVIC or state government retail outlets). have to be not only from the same social milieu. As is stated in the oath that each member takes on enrolling Lijjat fosters a sense of dignity and equality.bound together by hard work and a common social background. The office bearers in the organisation. equality and mutual respect are manifested in the organisation. During 1971-76. allowing for funds to be continuously recycled in the business profit margins were such that they enabled a rapid scaling up of operations through continuous expansion. In addition to selfgenerated resources. The members who show leadership skills are gradually given greater and greater responsibility. "Sab papad belne wale hai" (all of us roll papads). The Sisters Savings Fund is also available to the each of the Lijjat branches. such as becoming the sanchalika or the branch head and other administrative duties. in case of necessity. Commission agents are attached to almost all Lijjat Centres and they account for a major part of the Lijjat sales. In cases where a branch makes losses due to a fall in quality standards. receive the same per unit rolling charges. as the Indian varieties do not give them adequate yields. Purchases in bulk are made through agents. in case. its diversification into newer divisions to address its own growing needs better. but a world leader in papad manufacturing. The tenacity with which Lijjat has held on to its principles over a period of over forty years and yet continue to grow with all its members is a great tribute to the strength and versatility of the organisation. Heeng (asafoetida) is imported from Iran whereas black pepper is purchased from Cochin. In addition. The use of technology in production at Lijjat Papad would go against the basic principles of low skill production technique and decentralised production. Lijjat has a separate marketing. Replicability Potential The model is replicable into other sectors which require labour intensive but simple production processes with minimum use of technology. The dals are processed centrally in Lijjat's own mills at Vashi and Nasik. The advertisement expenses at around 3. large quantities being wasted as husk. The uncompromising quality standards of Lijjat. The commission/discounts paid were over half of the total selling expenses incurred by Lijjat in the financial year 2003-04.creating economies of scale in procurement as well as production. model the high sense of discipline in timing are among many other such factors that fuel hope of its sustainability into the future. sales. The caution is how the model is to be adapted to create and maintain the quality standards as well as ensure concomitant sales of the produce. The social and economic milieu it engages in the decentralised papad production. One of the key factors is the 'development of market power' which Lijjat has been able to enjoy through its brand.71 crores were around 15% of the selling expenses. Lijjat has kept pace with the changing marketplace and has emerged not just as another profitable institution. The responsibilities of every office bearer and member have been laid down in the constitution and have been modified with changing times and growth of the organization. This is where the greatest challenge during replication would come. an effort needs to be geared on similar lines from initiation. Any replication model should have the aim in building the same. followed by algaon and Latur. Thus a successful balance has been achieved between scale. and advertising divisions. Sustainability The scale of operations and phenomenal success of Lijjat Papad without any external institutional support right from its inception is proof of the basic soundness and sustainability of Shri Mahila Griha Udyog Lijjat Papad as an institution. As a natural corollary to its lack of upgradation of production technology. the scale it has managed to achieve has helped it achieve financial sustainability. The important factor underlying the success of Lijjat is management by member-owners rather than by professionals. Head Office sources informed that they prefer dal from Myanmar. it has to succeed in the medium term of about ten years. its outreach in terms of the number of women it engages is very high. quality and employment. 9 . it might be in place to attend to the primary factors that make it so. Such a large scale operation also requires establishment of backward and forward linkages for easy and smooth operations as was evident in Lijjat. often seen in large corporates. Major Learnings The most critical learning is that even uneducated women can take up higher responsibility.Conclusion Lijjat is a movement as much as an enterprise considering the number of women it has productively engaged. the social impact it has had. The institution was created on the planks of collective ownership and management. 10 . The critical aspect of catering to the market demand and tapping the same is evident in the Lijjat case. This helped in achieving efficiency in operations and reaching a scale with uncompromising quality. Brand building strategy has to be in place. The success of Lijjat does not need speaking for. This helps in not only having their own niche market but also helps in diversification into new areas. The labour intensive and familiar nature of the activity chosen lead to the success of the initiative. and the augmented incomes it gave to its members. management and its adaptability to changing market conditions. The diversification into new products was a well thought out decision in Lijjat wherein the skill set of the people was taken into consideration. The thrusting of new activity to people through training and capacity building can have chances of failure as was seen in Lijjat also. While Lijjat Papad is an outstanding institution. This helps in building confidence in the beneficiaries to engage themselves in a sustained manner. It is altogether different from recipient approach to development which often makes the intervention unsustainable. The tremendous growth it has achieved in around four decades while combining social and economic imperatives for its target segment is unparalleled. It is necessary that markets for products should be identified first in case of such intervention so that a continuous cycle of production and sale is maintained. The sense of ownership among the Lijjat sister was an important factor in its success. The core factors behind its success and sustainability also remain its collective ownership. when one gives the right autonomy and environment to them. in which belief in business and leadership acumen of the women was given a priority to formal training. provided the intervention is to be taken to a scale as Lijjat. The existence of Lijjat empire is a great proof.