EXECUTIVE SUMMARY

Marketing is very interactive and interesting subject. With the growing competition in the
market and globalization coming into role it has become essential for any leather company to
keep in touch with the channel partners and new marketing strategies. For a leather company to
survive in a market it is very essential to do channel partner engagement, price, and marketing
strategies

Leather has had a universal appeal from time immemorial. The manufacture of leather is one
of the oldest technological professions. Even before the beginning of recorded time, man has
worked with hides and skins to make the earliest form of clothing. The leather making of
primitive man was a race between his efforts and the destructive forces of nature. The tanner
quickly became a specialist and tanning skills were passed from father to son and on these basis
family fortunes and eventually, industrial empires were built.

The Supply chain analysis of leather industry with respect to Dharavi is what this project
focuses on. The project also studies it’s overall operations, procurement at each step.

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 INDUSTRY OVERVIEW
Few people think of Dharavi as a tourist’s paradise, but the leather shops on the 90-feet road
and the adjoining Sion-Bandra Link Road are some of the few places in Mumbai that are a
paradise for tourists. There are about 250 shops where you can buy leather goods, ranging from
wallets and purses to jackets and shoes.
“Many tourists come here because the leather here is cheaper, and most importantly, the leather
sold here has a quality which is unmatched when compared to many leather shops in Mumbai
and elsewhere in India,” says Radhika Shegaonkar, 38, who works at NR World Holidays, a
travel agency in Airoli. She adds, “In fact, we give gifts made of leather to our clients, and we
come here for the quality and price of the leather, despite shops closer to us which could provide
the same. We also recommend to our clients, who are both Indian and non-Indian, to visit the
place.”
The leather shops are world-renowned and get orders from all around the world. The tourists
are from several countries in Europe, Africa and America and they either look for a souvenir or
for an essential item they could buy at a lower cost. “Yes, we get a lot of tourists who buy our
products, especially because it is customised and because most retailers, including us,
manufacture the goods ourselves and can make it as good as a branded product for about quarter
the price. In fact, just recently a woman from Singapore ordered a bulk of ladies purses made
from sheep leather,” says Rabbani Sheikh, 30, from Leather Field, a leather shop.
“Additionally, because a lot of tourists would come here for the Dharavi tours, they would also
pop in to our shops and buy goods,” says 47-year-old Mehfooz Sheikh from New Choice,
another leather shop. “Yes, this my first visit to Mumbai and we had finished the Dharavi tour,
and we decided to pop into one of these many leather shops and the prices were mind-
bogglingly low! We have bought enough goods for our entire family!” says Jamal Malik from
Italy. Unlike many established shops, many of the leather shops here allow bargaining.
“Yes, a lot of clients bargain here, specially locals and Indian tourists who would do it more
rigorously. However, with the GST being implemented the scope for bargaining has reduced,”
says Ajam Ansari, 53 from Shaheena Stores. “Our business is down by almost 80 per cent. The
share of tourists in my overall sale had dipped to 10 per cent from what used to be 50 per cent
a few years a back.
The tax of 28 per cent is phenomenally high which has reduced business of all people in the
surrounding area. In fact, while foreign tourists keep coming as the goods are still cheaper here
than in the countries they come from, sales to Indian tourists have dipped,”

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 INTRODUCTION TO THE TOPIC

Dharavi is one of the famous city slum areas due to the largest number of slum dwellers in the
world who have been staying here in informal way within Mumbai. It is spread over 525 acres
with thousands of land flourishing small businesses and providing shelter to lakhs of residents
to it. The city is too socially, culturally and economically very vibrant comprising all religions,
communities and castes engaged in traditional business work. It has enterprises where residents
have been engaged in manufacturing leather goods, Garments, Foods and Pottery and other
small works. Dharavi did not get developed over night but took generations to get a stand with
mixed clan and neighbourhood.

Dharavi slum lies on prime property right in the middle of India’s financial capital, Mumbai. It
is rightly known as a home to more than a million people vividly considered as the second
generation residents, whose parents have been here since many years from different part of
country. The slum grew in part because of settlement of factories and the residents from
peninsular city centre by colonial government, and majority from the migration population from
the country. It is multi-ethnic, multi-cultured, multi-religious and diverse settlement. It has
population in millions in small concentrated areas.

The main peculiarity of Dharavi is that it is place of informal economy where many household
enterprises are being run employing residents and migrated numbers. It is estimated than its
annual turnover is over million dollars from the export of leather goods, textiles and pottery
products. Along with it many cottage and small industries are situated in Dharavi. Population
wise Hindus are dominating in Dharavi with 60 percent; while the second largest community
resides in Dharavi is Muslims 138 (33 percent), with Bhuddists, Christians and others. Majority
people from the community class were involved from long in tanneries, skin production and
manufacturing goods. Apart from it retail trade has also flourished here with time.

According to the survey of Dharavi by the National Slum Dwellers’ Federation (NSDF) nearly
1044 manufacturing units of all kinds, big and small are there. But the actual numbers may be
more as many smaller and household level businesses have 139 not registered or recorded
properly. According to the survey, large poor population is engaged in pity kind of work for
their livelihood here. Like Dharavi, kurla, Chembur, Sakinaka, Govandi, Thakkarbappa colony
are also the commercial areas where the leather manufacturing households and units are found
on a large scale.
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In Thakkarbappa colony there are wholesale shops for the small retailers who intend to buy and
sell the leather and non-leather products on retail in the city and nearby districts. There too the
leather business more is of unorganised nature. No official records are available about the
number of units working there in the leather work. Leather industry in Mumbai is mostly
artisan-based and the maximum production falls under cottage sector, in particular at domestic
level which is scattered throughout the city with significant concentration in Dharavi, Kurla,
Govandi, Thakkarbappa colony.Dharavi and the nearby areas are known for the manufacturing
of leather products.

The place Dharavi is famous for leather products, the leather purse, belt, wallets, bags; shoes
are in more demand throughout the year at reasonable rates. But since last twenty years, in the
post reform period the business has receded. The reasons are many but the exact cause is traced
to the competition from fancy leather products. Many segments have been closed in Dharavi
since last few years. Instead of growing into flourishing based industry, the leather units have
remained Unorganised and artisans have no option but to work as self-account worker
contributing little to the total production of the output. The leather business is one the biggest
contributors to the Mumbai slum’s informal economy. Over the year the leather trade has been
hit hard by increasing competition, rising raw material cost, labour shortage and sale of cheap
Chinese goods etc. once a fishing village known for its shellfish, till discharge from local
industries finished off aquatic life, Dharavi saw the leather industry being 140 berthed in the
late 19th century by backward communities like Charmakars, Dhors and immigrants from
Tamil Nadu like the Adi Dravidars who came to Mumbai to escape the tyranny of caste and
crippling poverty back home. Skins were sourced from the abattoir (Devnar). Today this city
accounts for a huge chunk of Maharashtra’s leather sector. The state in turn, accounts for 15
percent of India’s lather production, much of its in small and medium units.

Hundreds of households in Dharavi supplement their income by working in the leather industry;
the official data is available with no government institution working for industries in Mumbai.
But the number of employed are in thousands. Leather production was one of the first industries
to be established in Dharavi when Muslim tanners migrated from Tamil Nadu to Mumbai.
Along with Muslims and Tamilians, there are people from Andhra Pradesh who are involved
in this business. The main reason for Mumbai’s leather product is entrepreneurial skills of the
artisans. Today also many domestic artisans do their work by hand and that too without proper
training provided. Variety of leather products are being sold on ninety feet road of Dharavi. The
business is no more only in hands of the caste people but has been shifted in the hands of the
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non-community based people too. The reason behind it is the commercialization of the business.
As per the records of DIC-Mumbai, there are 72 registered leather units Mumbai with an
investment of 1531 lakh rupees. The following institutions work for the growth and
development of the leather business in Mumbai:

Leather Industries Development Corporation of India (LIDCOM)

Leather Industries Development Corporation of Maharashtra Ltd. (LIDCOM) was established

on 1st May, 1974.State Govt. participation in the Share Capital is 100%. 141 As per Govt. Of
Maharashtra Resolution No.LID/1095/6461/lND-5,dated 24.6.96, LIDCOM has been brought
under the control of Social Welfare Cultural Affairs and Sports Department from Industries
Department. The said decision was taken in order to give financial assistance to the community
people mainly from the schedule caste category called ‘Charmakars’ or ‘Chambhar’. Its head
office is in Mumbai, Veer Nariman marg. It aims to promote & boost the Leather Industry and
people engaged in Leather Industry of the Maharashtra State, Government of Maharashtra has
established a company under the Company Act, 1956. The Corporation's objectives are broadly
divided into Commercial and Social activities. The Commercial activities - To arrange
procurement and supply of raw material for those engaged in the Leather Industries or to make
necessary arrangement for production of Leather Goods. To ensure quality control in order to
get qualitative product. To take necessary steps for improvement in production techniques. To
assist and act as an agent for sale of finished products by opening of show rooms, exhibition
counters within and outside the state. To promote the sale of finished leather goods in foreign
market. To procure capital or financial assistance and to sanction loans, subsidies and
Resources, machinery, equipment for promoting leather and leather based industries and other
industries of Scheduled Caste Charmakar Community. To give financial assistance ,loans,
subsidy to Charmakar Community(Scheduled Caste) for rendering any legal service, transport,
leather and other industries, agricultural and other sectors for over all development of said
community. It also aims at providing financial assistance to the leather artisans from the state
and central government sources to develop the business and create the market. The main
production centre’s of LIDCOM are Daryapur (Amravati), Hingoli, Kolhapur, and
Satara(particularly the research centre). The selling centres of the corporation are Mumbai,
Vashi, Dhule, Jalgoan, Solapur and Nanded. They produced soft shoes, sandals, Chappals,
Kolhapur chappals, fancy shoes, Jungle boots, Cash bags, Office bags, Oxford shoes. All these

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orders are done by government concerns from time to time and thus the orders are taken
produced from the four centres accordingly. There is not such a centre in Mumbai region except
one from Dharavi. LIDCOM also provide training to the artisans to enhance the skill of
producing better quality of goods to meet the new demand patterns. It also provides loans to the
cobblers for cottage and small-scale industries. But it is not only confined to the leather business
but today any kinds of business they are intended to do, loans are provided to them. Loans are
made available from NSFDC, Delhi. The primary objective of the institute is the welfare of the
scheduled caste communities. So the loan is granted for the purpose of sewing, beauty parlour,
electric shops, toy making, mechanical work, computer training, welding, automobile repair,
and leather making. Though the selling centre is in Mumbai, no work is done from clusters of
Mumbai by the institute. Therefore exact number of artisans working in the vicinity is neither
known nor recorded. 3.7.2

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Leather Goods Manufacturers Association (LIGMA)

It was established in Dharavi, Kalakilla for the development of the leather industry and the
leather artisans. It aims to organize them and improve their economic, psychological,
educational and social conditions.

It’s main objectives are:

• To bring all the leather workers together and to organize them.

• To solve the problems faced by them in the production process

• To support them financially through the government schemes.

• To train, educate them through the seminars, workshops, lectures, and exhibition.

• To carry the leather research and communicate.

• To curtail the sales tax for the marginal artisans.

• To import the required raw material and export the finished goods.

• To make market available for the raw leather and tanneries.

• To develop clusters for business expansion.

• To establish cooperative association of workers.

Even though the set up of LIGMA is an attempt to develop the leather business in Mumbai, the
situation is different today. After having talk with the one of the office bearer Mr. Mane, it was
known that the old workers have almost stopped business due to problems; the numbers have
come down from 1100 to a mere few hundreds. The products to be manufactured where travel
leather, Non-leather goods, Industrial leather goods, small leather goods and articles. The
formation looked to cater to the need of the domestic market, Mumbai and other cities of
Maharashtra and all over India.

It also intended to export goods to European, Asian and Middle East countries. The main reason
behind are environmental issues and disposal of wastage, lack of financial assistance, high cost
of semi-tanned leather, unhygienic working conditions leading to health issues of workers, no
quality testing facilities, no proper working environment, illiterate and poverty struck
workforce, no technical knowledge to cater to today’s need of leather designs, inadequate
training centres, market disparity on large scale, competition from cheap goods from foreign
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countries, mainly from China. Lack of access to information and proper leadership. Even there
was an initiative to develop a cluster in Dharavi, but it was futile due to the stated problems and
issues. ‘The current state of India’s artisans is a matter of grave concern… Though some have
managed to adapt to changing times, and a few have even thrived, most of them live in poverty
with no prospects for a better tomorrow’ (Satyanand)19. Dharavi is a very large densely
populated slum in Mumbai. There the leather accessories manufacture is dominated by small
and household enterprises. More than 90 percent of the firms or household enterprises hire less
than ten workers. It has been more in the hands of the self-employed workers who are almost
half the total population. The leather manufacturing business in Dharavi is more of informal
nature. Workers do work on time and piece rates. More of them are paid daily or weekly for the
labour provided in making leather products. There is no question of job security, medical and
minimum wages and retirement benefits here as industry is Unorganised in nature and more
seasonal in terms of employment and output matters. After the economic reforms it is visible
that the leather manufacture has shifted in the hands of Satyanand, Kanikar and Sekar (1995)
“India’s Artisans: A status Report, Society for Rural Urban and Tribal Initiative (STRUTI),
New Delhi. migrated workforce, who at first worked as labour in the industry and today is self
account workers competing with traditional artisans engaged in the work since years. The
industry in Dharavi is a powerful magnet of the total migrant workers as 77 percent came from
other states. (JesimPais). The leather manufacture in Dharavi is carried at household level where
all are the family members. The karta of the family keeps him engaged in the leather product
making on a small scale within the room at one corner. The family members do also assist him
in some process of product making. They are neither paid nor are their services visible in the
national output. Majority of the household taken for the sample have same kind of work
management. All family members do assist in the work to get it over as it is more of contractual
kind of work. These household/ domestic self employed workers /artisans are the real victims
of globalization. Lacking proper structure of the industry and not accounted officially, they are
suffering from migrated labour force attracted by the industry and cheap Chinese products sold
at cheaper prices in the market. Apart from this there is also the existence of the boarding room
workers who are not family member but are migrated workers to just work and earn in the city.
They stay as co-workers with each other led by one who brings them from their villages. They
are co-villagers. These workers carry leather work in rental house for maximum hours. The
observation is that they do work for late hours and produce more sold at a fewer prices. It has
created problem for the local artisans who have families and spare time as per convenience in

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the work. So their price range is quite high as more time is needed to finish the leather product.
Still the footwear, belts, purse, office bags, wallets, garment clothes are more manual in
Dharavi. The previous studies on 146 Dharavi show that there is total absence of any form of
public announcement of the employment opportunity in Mumbai. The need of employment is
fulfilled by network of relationships within the industry and outside. As stated early people
engaged at one place are from same state, language, caste or defined relations. Undoubtedly
after the reforms the caste and community based leather business has been shifted to the hands
of non-caste and non-community business affecting not only quality of the products but the
livelihood of the local artisans. Study of Pushpa(1985)reveals that labourers from other castes
and from among the Muslims entered the industry in the postreform period. The presence of
workers and artisans from other Hindu castes is less significant. But the entry of Muslim
workers is spectacular. Thought not trained well, they have been doing business by trial and
error method. They are the new artisans group in Mumbai emerging in post reform period.
Studies of Romatet(1983), Gothoskar(1998), Srivastava (2001) stated that the employment is
in informal sector is obtained through relatives, friends and community members. In the study
of JesimPais (2001) it is observed after the reforms there is no indication of the decline in the
role of caste and community based on informational networks in favour of more impersonal
recruitment procedure

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 SWOT ANALYSIS OF LEATHER INDUSTRY

STRENGTHS

• Existence of more than sufficient productive capacity in tanning.

• Easy availability of low cost of labour.

• Exposure to export markets.

• Managements with business background become quality and environment conscious.

• Presence of qualified leather technologists in the field.

• Comfortable availability of raw materials and other inputs.

• Massive institutional support for technical services, designing, manpower development &
marketing.

• Exporter-friendly government policies.

• Tax incentives on machinery by Government.

• Well-established linkages with buyers in EU and USA.

WEAKNESSES

• Low level of modernisation and upgradation of technology, and the integration of developed
technology is very slow.

• Low level of labour productivity due to inadequate formal training / unskilled labour.

• Horizontal growth of tanneries.

• Less number of organised product manufacturers.

• Lack of modern finishing facilities for leather.

• Highly unhygienic environment.

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• Unawareness of international standards by many players as maximum number of leather
industries are SMEs.

• Difficulties in accessing to testing, designing and technical services.

• Environmental problems.

OPPORTUNITIES

• Abundant scope to supply finished leather to multinationals setting up shop in India.

• Growing fashion consciousness globally.

• Use of information technology and decision support software to help eliminate the length of
the production cycle for different products

• Product diversification - There is lot of scope for diversification into other products, namely,
leather garments, goods etc.

• Growing international and domestic markets.

THREATS

• Entry of multinationals in domestic market.

• Stiff competition from other countries.(The performance of global competitors in leather and
leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand,
Vietnam and Brazil, which are more competitive than India.)

• Non- tariff barriers - Developing countries are resorting to more and more non – tariff barriers
indirectly.

• Improving quality to adapt the stricter international standards.

• Fast changing fashion trends are difficult to adapt for the Indian leather industries.

• Limited scope for mobilising funds through private placements and public issues, as many
businesses are family-owned
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 MAJOR PLAYERS

 Tata International Ltd. : It was established in 1962,one of the largest export house in
India
 Farida Shoes Ltd. : Based in Chennai, Farida shoes ltd.is the leading leather and leather
footwear exporters in India with a turnover of approximately 170 million USD.
 Mirza Tanners Ltd. : Mirza International Limited (formerly known as Mirza Tanners
Limited) was incorporated on 5th September 1979. The company has its headquarters
in Delhi and production unit at Kanpur. Today, the company has emerged as a
frontrunner in the manufacturing and marketing of leather and leather footwear.
 T. Abdul Wahid &Company : The company is based in Chennai, tamilnadu
 Hindustan Lever Ltd.: subsidy of Hindustan Unilever Ltd. situated in Chennai.
 Super House Leather Ltd.: Situated in Unnao near Kanpur
 RSL Industries Ltd.: the company has its production unit in Chennai
 Presidency Kid Leather Ltd.: the company has its production unit in Chennai

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 RECENT STATISTICS
India’s leather industry has grown drastically, transforming from a mere raw material supplier
to a value-added product exporter.

STATISTICS
 Strong Raw Material Base.

1) A strong base for raw materials – India is endowed with 20% of the world’s cattle and
buffalo and 11% of the world’s goat and sheep population.
2) India produces 2.5 billion sq. feet of leather, accounting for about 13% of global
production

 The Indian Leather Industry comprises of major segments namely Footwear, Finished
Leather, Leather Goods, Leather Garments, Footwear Components and Saddlery and
Harness. All these segments have high growth potential.

 Per capita consumption of footwear in India projected to increase upto 4 pairs and total
domestic consumption is expected to reach upto 5 billion pairs by 2020.

 Great opportunity to set-up manufacturing facility of footwear components, considering

increasing demand for fashion footwear in India.

GROWTH DRIVERS

 High growth potential on exports, the ready availability of leather, the abundance of
essential raw materials and rapid strides in the areas of capacity modernisation and
expansion, skill development and environment management, coupled with a favourable
investment climate has made the Indian leather industry a favourable investment
destination.
 Youth Power: With 55% of the workforce below the age of 35, the Indian leather industry
has one of the youngest and most productive workforces.
 Favorable government policies for promotion of leather sector.
 Increasing domestic market for Fashion Accessories like Hand Bags, Wallets, Purses etc

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 LEATHER INDUSTRY OF INDIA

The leather industry occupies a place of prominence in the Indian economy in view of its
massive potential for employment, growth and exports. Endowed with the largest cattle
population in any country of the world and cheap and abundant manpower, India is well-
equipped to have the comparative advantage in the production of leather and leather goods.

The country is among the top four producers of finished leather apart from countries like Italy,
Korea and China accounted for 40% share of the total world leather production. There has been
a shift with the industry moving to low-cost labour countries such as China, Indonesia,
Thailand and India; and yet, the Indian share in the total market has remained low. India and
China are entering into a cooperation phase in certain areas of leather industry, such
as technology, training and tackling environmental and other global issues.

The Indian leather industry suffered from the handicap of low investment and sub-standard
technology. As a consequence, India's share in the global market remains at a low of 3%. Of
late, the country has emerged as a significant exporter with more sophisticated and value-added
products. In fact, it is fast changing from a raw material exporter to an exporter of more
upgraded finished products. The product range has got widened and with greater innovation a
substantial value addition is being secured.

To exploit the full potential of the industry, the government launched the Leather Technology
Mission with twin-objectives with the first one aiming at restructuring and streamlining
the industry to make it internationally competitive, and secondly protecting the interests of
the small scale and tiny sectors.

The leather industry is spread in different segments, namely, tanning & finishing, footwear &
footwear components, leather garments, leather goods including saddler & harness, etc. The
product variation covers semi and finished leather, footwear and footwear
components, garments for ladies and gents, handbags for ladies and gents, wallets, diaries and
cardholders, gloves and fashion accessories, tableware, upholstery (for houses, offices and
vehicles), and luggage and portfolio bags.

Apart from manpower required in the collection of hides, the industry claims an employment
of 2.5 million, most of which is engaged in the small and informal sector making up for 75%
of the total industry. The size of the leather industry is estimated at around Rs 300 billion today.
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The leather industry is targeting an 8-10% share in global trade by 2010-11. The industry is
aiming at doubling export turnover to $ 4 billion. This would call for an investment of at least
Rs 120 billion in plant and machinery and infrastructure development.

Some of the major leather exporters include Tata International Ltd., Florind Shoes Ltd.,
Punihani International, Farida Shoes Ltd., and Mirza Tanners Ltd.etc. The major markets of
Indian leather products are the USA, the UK, Germany, Italy and France.

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 PROJECT DETAILS

Objectives of the study:

 Understanding the upstream and downstream activities

 Understanding the sourcing, processing, distribution, marketing aspects of leather
 Understanding the benefits and the markets served by Dharavi leather

Methodology:

Quantitative Research/ Descriptive

Sources of Data:

Primary: Questionnaire

Secondary: Report, Journals

Data Collection Instrument

Questionnaire

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 SUPPLY CHAIN MANAGEMENT

In commerce, supply chain management (SCM), the management of the flow of goods and
services, involves the movement and storage of raw materials, of work-in-process inventory,
and of finished goods from point of origin to point of consumption. Interconnected or
interlinked networks, channels and node businesses combine in the provision
of products and services required by end customers in a supply chain. Supply-chain
management has been defined as the "design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, synchronizing supply with demand and
measuring performance globally.’ SCM practice draws heavily from the areas of industrial
engineering, systems engineering, operations, logistics, procurement, information technology,
and marketing and strives for an integrated approach. Marketing channels play an important
role in supply chain management Current research in supply chain management is concerned
with topics related to sustainability and risk management, among others, whereas the “people
dimension” of SCM, ethical issues, internal integration, transparency/visibility, and human
capital/talent management are topics that have, so far, been underrepresented on the research
agenda.

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Functions

Supply chain management is a cross-functional approach that includes managing the movement
of raw materials into an organization, certain aspects of the internal processing of materials into
finished goods, and the movement of finished goods out of the organization and toward the end
consumer. As organizations strive to focus on core competencies and become more flexible,
they reduce their ownership of raw materials sources and distribution channels. These functions
are increasingly being outsourced to other firms that can perform the activities better or more
cost effectively. The effect is to increase the number of organizations involved in satisfying
customer demand, while reducing managerial control of daily logistics operations. Less control
and more supply chain partners lead to the creation of the concept of supply chain management.
The purpose of supply chain management is to improve trust and collaboration among supply
chain partners thus improving inventory visibility and the velocity of inventory movement.

Importance

Organizations increasingly find that they must rely on effective supply chains, or networks, to
compete in the global market and networked economy.[16] In Peter Drucker's (1998) new
management paradigms, this concept of business relationships extends beyond traditional
enterprise boundaries and seeks to organize entire business processes throughout a value chain
of multiple companies.

In recent decades, globalization, outsourcing, and information technology have enabled many
organizations, such as Dell and Hewlett Packard, to successfully operate collaborative supply
networks in which each specialized business partner focuses on only a few key strategic
activities (Scott, 1993). This inter-organisational supply network can be acknowledged as a new
form of organisation. However, with the complicated interactions among the players, the
network structure fits neither "market" nor "hierarchy" categories (Powell, 1990). It is not clear
what kind of performance impacts different supply network structures could have on firms, and
little is known about the coordination conditions and trade-offs that may exist among the
players. From a systems perspective, a complex network structure can be decomposed into
individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply
network concentrate on the inputs and outputs of the processes, with little concern for the
internal management working of other individual players. Therefore, the choice of an internal
management control structure is known to impact local firm performance (Mintzberg, 1979).

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In the 21st century, changes in the business environment have contributed to the development
of supply chain networks. First, as an outcome of globalization and the proliferation of
multinational companies, joint ventures, strategic alliances, and business partnerships,
significant success factors were identified, complementing the earlier "just-in-time", lean
manufacturing, and agile manufacturing practices. Second, technological changes, particularly
the dramatic fall in communication costs (a significant component of transaction costs), have
led to changes in coordination among the members of the supply chain network (Coase, 1998).

Many researchers have recognized supply network structures as a new organisational form,
using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global
Production Network", and "Next Generation Manufacturing System". In general, such a
structure can be defined as "a group of semi-independent organisations, each with their
capabilities, which collaborate in ever-changing constellations to serve one or more markets in
order to achieve some business goal specific to that collaboration" (Akkermans, 2001).

Supply chain management is also important for organizational learning. Firms with
geographically more extensive supply chains connecting diverse trading cliques tend to become
more innovative and productive.

The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC
28001 and related standards published jointly by the ISO and the IEC. Supply Chain
Management draws heavily from the areas of operations management, logistics, procurement,
and information technology, and strives for an integrated approach.

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Business process integration

Successful SCM requires a change from managing individual functions to integrating activities
into key supply chain processes. In an example scenario, a purchasing department places orders
as its requirements become known. The marketing department, responding to customer
demand, communicates with several distributors and retailers as it attempts to determine ways
to satisfy this demand. Information shared between supply chain partners can only be fully
leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and
suppliers, joint product development, common systems, and shared information. According to
Lambert and Cooper (2000), operating an integrated supply chain requires a continuous
information flow. However, in many companies, management has concluded that optimizing
product flows cannot be accomplished without implementing a process approach. The key
supply chain processes stated by Lambert (2004) are:

 Customer relationship management

 Customer service management
 Demand management style
 Order fulfillment
 Manufacturing flow management
 Supplier relationship management
 Product development and commercialization
 Returns management

Much has been written about demand management. Best-in-class companies have similar
characteristics, which include the following:

 Internal and external collaboration

 Initiatives to reduce lead time
 Tighter feedback from customer and market demand
 Customer-level forecasting

One could suggest other critical supply business processes that combine these processes stated
by Lambert, such as:

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Customer service management process
Customer relationship management concerns the relationship between an organization and its
customers. Customer service is the source of customer information. It also provides the
customer with real-time information on scheduling and product availability through interfaces
with the company's production and distribution operations. Successful organizations use the
following steps to build customer relationships:

 Determine mutually satisfying goals for organization and customers

 Establish and maintain customer rapport
 Induce positive feelings in the organization and the customers

Procurement process
Strategic plans are drawn up with suppliers to support the manufacturing flow management
process and the development of new products. In firms whose operations extend globally,
sourcing may be managed on a global basis. The desired outcome is a relationship where both
parties benefit and a reduction in the time required for the product's design and development.
The purchasing function may also develop rapid communication systems, such as electronic
data interchange (EDI) and Internet linkage, to convey possible requirements more rapidly.
Activities related to obtaining products and materials from outside suppliers involve resource
planning, supply sourcing, negotiation, order placement, inbound transportation, storage,
handling, and quality assurance, many of which include the responsibility to coordinate with
suppliers on matters of scheduling, supply continuity (inventory), hedging, and research into
new sources or programs. Procurement has recently been recognized as a core source of value,
driven largely by the increasing trends to outsource products and services, and the changes in
the global ecosystem requiring stronger relationships between buyers and sellers.

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Product development and commercialization
Here, customers and suppliers must be integrated into the product development process in order
to reduce the time to market. As product life cycles shorten, the appropriate products must be
developed and successfully launched with ever-shorter time schedules in order for firms to
remain competitive. According to Lambert and Cooper (2000), managers of the product
development and commercialization process must:

 coordinate with customer relationship management to identify customer-articulated needs;

 select materials and suppliers in conjunction with procurement; and
 develop production technology in manufacturing flow to manufacture and integrate into the
best supply chain flow for the given combination of product and markets.

 Integration of suppliers into the new product development process was shown to have a
major impact on product target cost, quality, delivery, and market share.

 Tapping into suppliers as a source of innovation requires an extensive process characterized

by development of technology sharing, but also involves managing intellectual property
issues.

Manufacturing flow management process

The manufacturing process produces and supplies products to the distribution channels based
on past forecasts. Manufacturing processes must be flexible in order to respond to market
changes and must accommodate mass customization. Orders are processes operating on a just-
in-time (JIT) basis in minimum lot sizes. Changes in the manufacturing flow process lead to
shorter cycle times, meaning improved responsiveness and efficiency in meeting customer
demand. This process manages activities related to planning, scheduling, and supporting
manufacturing operations, such as work-in-process storage, handling, transportation, and time
phasing of components, inventory at manufacturing sites, and maximum flexibility in the
coordination of geographical and final assemblies postponement of physical distribution
operations.

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Physical distribution
This concerns the movement of a finished product or service to customers. In physical
distribution, the customer is the final destination of a marketing channel, and the availability of
the product or service is a vital part of each channel participant's marketing effort. It is also
through the physical distribution process that the time and space of customer service become
an integral part of marketing. Thus it links a marketing channel with its customers (i.e., it links
manufacturers, wholesalers, and retailers).

Outsourcing/partnerships
This includes not just the outsourcing of the procurement of materials and components, but also
the outsourcing of services that traditionally have been provided in-house. The logic of this
trend is that the company will increasingly focus on those activities in the value chain in which
it has a distinctive advantage and outsource everything else. This movement has been
particularly evident in logistics, where the provision of transport, storage, and inventory control
is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling
this network of partners and suppliers requires a blend of central and local involvement:
strategic decisions are taken centrally, while the monitoring and control of supplier performance
and day-to-day liaison with logistics partners are best managed locally.

Performance measurement
Experts found a strong relationship from the largest arcs of supplier and customer integration
to market share and profitability. Taking advantage of supplier capabilities and emphasizing a
long-term supply chain perspective in customer relationships can both be correlated with a
firm's performance. As logistics competency becomes a critical factor in creating and
maintaining competitive advantage, measuring logistics performance becomes increasingly
important, because the difference between profitable and unprofitable operations becomes
narrower. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive
performance measurement realized improvements in overall productivity. According to experts,
internal measures are generally collected and analyzed by the firm, including cost, customer
service, productivity, asset measurement, and quality. External performance is measured
through customer perception measures and "best practice" benchmarking.

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Warehousing management
To reduce a company's cost and expenses, warehousing management is concerned with storage,
reducing manpower cost, dispatching authority with on time delivery, loading & unloading
facilities with proper area, inventory management system etc.

Workflow management
Integrating suppliers and customers tightly into a workflow (or business process) and thereby
achieving an efficient and effective supply chain is a key goal of workflow management.

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 DATA ANALYSIS AND INTERPRETATION
OPERATIONS OF DHARAVI

Supply Chain

Preservation Sale/Export
•From all parts of •Done at the time of
India order
•Salt preservation •Exported to
•luxury item •TN, Kanpur,
•Maintains Lucknow foreign countries
animal skin moisture •Sold to retailers
imported •After it, final
product is made •Sold to end users
•Rates decrease at Processing
the time of Eid
Procurement

The workers working at Dharavi are paid salaries on per piece basis which includes
processing cost of the lot.
The peak season of sales ranges from Diwali until the month of January and off seasons
include the monsoons.

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 FINDINGS

 The observation is that they do work for late hours and produce more sold at a fewer prices
 These household/ domestic self employed workers /artisans are the real victims of
globalization
 The study shows the leather manufacture is not permanent in nature but rather temporary,
lacking good wages, permanent jobs, social security there is continuous labour job skipping.
The one who was employed days before may not turn up the next day on the job.
 The presence of workers and artisans from other Hindu castes is less significant. But the
entry of Muslim workers is spectacular

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 RECOMMENDATIONS

The big manufacturing industry has successfully applied material management systems for the
last decades and this has been possible by the enabling culture change that exists in this industry.
There are movements in the manufacturing sector towards Just in Time (JIT), Total Quality
Management (TQM) and enterprise resource planning (ERP), among others, that support the
claim that there is an enabling cultural change. Unfortunately, the small scale industry is very
resistant to change.
The “if it is not broken, don't fix it" attitude is typical in this industry. Implementation of new
innovative methods might be difficult in such an environment. However, the industry is being
under huge pressure by competition, owners and the market to be more effective, responsive,
flexible and to provide more value by reevaluating its methods and processes. Most small scale
209 industries are small business owners who cannot afford to design their own systems.
In addition, if every industry is developing their system independently, this would produce
many incompatible systems. Standardization and institutionalization of new methods and
processes are especially important in the Leather industry.

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 CONCLUSION

In conclusion, this project talks about the entire supply chain management of leather with
respect to Dharavi.
The upstream and downstream activities have been identified. The researcher got to learn how
the entire process right from procurement to the export of goods are done at Dharavi and all the
operations that are undertaken in this process.
Therefore, efficient material & supply chain management is crucial for the success of any small
scale manufacturing & fabrication project and can be the deciding factor between a successful
project and a project full of delays and claims.
Better material management methods and decision models are needed to improve the electrical
industry current practices, thus increasing efficiency and minimizing costs. An effective supply
management system is essential for managing efficient material management to avoid material
shortages, misplacements, loss, and theft which might result in increases in crew idle times,
loss of productivity and delay of activities.

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 BIBLIOGRAPHY

 http://shodhganga.inflibnet.ac.in/bitstream/10603/3404/16/16_chapter%209.pdf

 https://en.wikipedia.org/wiki/Supply_chain_management

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