Jaipur Rugs Company

8/3/2019 Jaipur Rugs Company

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JAIPUR RUGS COMPANY

Presentation by:Group-1


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B RIEF OVERVIEW OF COMPANY

Founder NK Chaudhary entered rug-making business in 1986 with his brother.

Jaipur Rugs registered in 2006. By 2008, the company had an annual revenue

of $21.1mn with a CAGR of 38% between2005-08.

Approximately 300 direct employees, 40000contractors, operations split into 4 entities.


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B UILDING B LOCKS

D eep Rooted Relationships:Mr . Chaudhary built Jaipur Rugs by emphasizing strong personal loyalties and family ties. Thisallows JR to efficiently operate a highly decentralized system.

D riven By Social Values:Competitive wages, skills training, access to healthcare and education and opportunity forentrepreneurs.

Reducing Capital Intensity:Work and investment are decentralized, leverages management influence over key decisions.

Technical Architecture:ERP and human network.


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PROPER SYSTEM IN PLACE

D espite having a highly decentralized process,JR has a very efficient supply chain because of periodic and properly placed system checksthat ensure quality and minimize rejection.

Weavers are not required to bear transport costthereby saving time and money and increasing output.

Efforts are underway to further streamline theprocess to reduce the lead time.


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SOCIAL INCLUSIVENESS


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WEAVER ENGAGEMENT

Mode of Employment

Number of Weavers % of Weavers Average MonthlyIncome

D irect contact withJRC

15,170 55 1870-2970*

Indirect viaEntrepreneur

6,900 25 1760-2800

Indirect viaMiddlemen

5,500 20 1320-1980

*Variation in income is based on skill and output.Even in case of middlemen, the compensation that weavers get is much better than

other market players.JR ensures that child labor is not practiced by any of its outsourcing partners also.


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PRESENT CHALLENGES

D eveloping human capability and skill at grass root level. Providing steady income for rural men & women. Connecting rural India to global market.

Is the model sustainable?


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SOCIAL ISSUES ANDENCOURAGEMENT

Promotion of leadership and entrepreneurship,upward mobility.

Employee interaction- Sunday night discussionsand Book share programs. Employee training.

Labor Practices- no discrimination on anygrounds.


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FUTURE GOALS & CHALLENGES

Target more people- broader product line Capacity building- in terms of design, production and supply. Efficient supply chain. F inding right people and developing them- at top level, mid

level and at the weaver and contractor level.

JR is successfully managing issues related to sustainabilityand inclusive growth which is in line with its vision.


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JODHPUR FURNITURE


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ISSUES FACED B Y JODHPURFURNITURE

F ierce competition (Margin cuts) H igh labor and raw material costs.

Shortage of skilled labor. Strict timelines imposed by SEZ.

The way forward: F ocus should be on the Indiandomestic market.


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SIMILARITY B ETWEEN THE TWO?

JR follows a very robust model. Its dependence on skilled laboris not that high. The company has set up offices where therewas no history or rug making and trained people there.

Industry wide reputation of JR.H

igh RM costs can be absorbedby a combination of decrease in margins and increase inprices.


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DIFFERNTIATING FACTOR!

Focus on inclusive growth and sustainability. Encouragement to be an entrepreneur.

Jodhpur Furniture is highly capital intensivewhereas JR is not. Reason? H igh reliability on skilled labor in case of

Jodhpur Furniture. JR provides incentives inform of hundreds of upward motivatedsuccessful employees.


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POSSI B LE SOLUTIONS

U se of proper communication channels Retention of keypeople and their future generations

Removal of middle men to help improve margins for the workers Educate the females and children about the work

Encourage counseling and entrepreneurship among across theextended organization To give Monthly salaries and extend counseling to the

trainers at the training centers U se of B2B and B2C models for expansion and delivery in

new nations like SA, Turkey, Italy,U

AE, Japan and Germany Customization of ERP to suit their business model


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Thank You!!

Jaipur Rugs Company

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