case study JAIPUR, INDIA--Having implemented various IT tools including ERP, CRM, barcodes and Autotex, Jaipur Rugs has not only made carpet-weaving a more efficient business but also improved the livelihood of thousands of weavers across India.
"When you know how to work with the limitations of technology, you learn to make the most of it," Nand Kishore Chaudhary, founder and managing director of Jaipur Rugs Company, told ZDNet Asia in an interview. Technology mustn't kill creativity, he said, adding that he has ensured this does not ring true at Jaipur Rugs.
Chaudhary started his carpet business in 1978 with only two looms and a few weavers. In 1990, he set up Jaipur Carpets which was rechristened Jaipur Rugs Company in 2006. Since then, the company has not looked back and is today a leading manufacturer of hand-knotted carpets.
Traditionally, carpet-weaving used to take place through contractors. The weavers were invariably exploited at the hands of contractors who gave them measly wages in return for highly-skilled labor.
Chaudhary did away with the middlemen by establishing a direct link between the company and weavers. This way, he created a unique business model wherein he engages 40,000 independent weavers located across India, mostly in remote villages. None of these artisans are on the company's payroll but are provided with training and professional help.
Carpets manufactured by Jaipur Rugs are exported to over 30 countries across the world, including the United States, which accounts for 60 percent of shipment, Europe and Australia.
Many of these countries follow high quality and social compliance standards, and ensuring consistent high quality was a challenge for the Indian company. This was when technology came to its aid.
New technology, old craft
In 2007, Jaipur Rugs implemented Microsoft's Dynamics Navision enterprise resource planning (ERP) offering, which includes a customer relationship management (CRM) application. Today, 30 designers at the company's headquarter in Jaipur design carpets using CAD Autotex. The designs, known as maps, are then sent to weavers in far-flung villages who follow the maps to weave carpets using traditional looms.
Fifty quality supervisors located at 20 branches across India routinely send out reports on the progress of these carpets, as well as monitor quality. Jaipur Rugs Foundation, a voluntary, non-profit organization, trains weavers through its skill upgradation programs to enhance their earnings and improve the quality of their carpets.
Through technology, the company has established links from grassroots to retailers of the product. After the ERP implementation, Jaipur Rugs' turnover grew from US$5.5 million (INR 250 million) to US$14.3 million (INR 650 million) in 2010.
"From around 20,000 carpets a year in 2006, we are now manufacturing nearly 100,000 carpets and rugs," Yogesh Chaudhary, the 24-year old son of Chaudhary and director of Jaipur Rugs told ZDNet Asia.
The carpet industry is highly unorganized, skills driven and dependent on manual labor. Moreover, the supply chain is large and complex. For instance, besides sourcing raw materials from different parts of India, Jaipur Rugs also imports wool from Argentina, New Zealand, China and Australia,.
"Our supply chain starts with the raw materials, such as wool and silk, going up to procurement, manufacturing, warehousing and sales. In all, there are 85 processes involved from procurement to marketing of the carpets," Abhishek Sharma, ERP manager at Jaipur Rugs told ZDNet Asia.
Given these conditions, implementing an ERP solution was no mean task.
With an office in Atlanta that has 15 employees and 40 sales representatives, it was vital to establish a link between the two offices so that databases could be shared. In 2007, Jaipur Rugs spent US$110,314 (INR 5 million) to deploy Dynamics Navision with 100 user licenses. The ERP system integrates functions such as finance, manufacturing, distribution, CRM and e-commerce data.
"Life has become much easier after the ERP implementation," Yogesh said, noting that the application provides real-time information and is linked with several Web sites. "It gives us the status on various job orders. We have 20 to 25 live Web sites where these updates are put up." This provides customers live information on the progress of their carpets.
Jaipur Rugs also has a backoffice in Jaipur that does data entry, order processing, report and invoice work for its US office.
While the ERP software improved efficiency within the company, the supervisors visit the weavers twice a week to ensure product quality at the loom level. They then return to their branches to send out reports using the ERP solution.
"Establishing connectivity in villages is quite a challenge," Yogesh noted. The company uses virtual private network (VPN) in remote villages and the quality supervisors also use mobile phones to send information to the branch offices.
"With the launch of 3G and broadband wireless access, we hope to see an improvement in the connectivity scenario," he added.
Ushering in social media
With around 300 employees and a turnover US$14.3 million, Jaipur Rugs has an annual IT spend of US$341,976 (INR 15 million). Its IT team comprises 15 employees, 3 of whom manage networking and hardware, 4 oversee the company's ERP and 9 people handle online marketing.
Jaipur Rugs wants to further leverage IT. For instance, it plans to launch a portal to allow its customers--mostly large retailers--to view live images of the looms where carpets are being weaved and receive an instant progress report on their orders. "The customer portal should go live in the next couple of months," Yogesh said.
He also underscored the importance of increasing the company's social media presence.
Jaipur Rugs' IT infrastructure comprises of a database server, file server, terminal server, mail server, design and development server, and backup server for the ERP and payroll software. The company now plans to implement the new generation Blade server that is touted to be significantly more efficient. It is also planning to deploy Microsoft's cloud-based CRM 2011.
Swati Prasad is a freelance IT writer based in India.