People from near and far know of Dharavi for being Asia's biggest slum spread over parts of the Sion, Bandra, Kurla and Kalina suburbs of Mumbai. But not many people know of the thriving leather handbag industry right along its borders. Dharavi, for those in the know, is almost synonymous with leather handbags - about 120 leather goods shops are located here, furnished with items manufactured in the region's estimated 5,000 leather workshops. Bags here are made with genuine leather - sheep, buffalo and cow - in the latest colours, designs and shapes.
Other leather items such as jackets, belts and wallets are also produced and sold throughout Dharavi. For retailers with their own manufacturing units, production costs are low, and as goods are often produced in-house, the supplier-to-consumer chain is relatively short. In the absence of middlemen, many shop owners are able to make a decent profit even whilst selling products at very low prices. The bag would cost about 900 rupees which cost at least 1500. Prices that seem even more remarkable, given that the quality of the bags is at the same standard one would expect to find in any other genuine leather market in India.
But the problems faced by the leather cluster of Dharavi are many – lack of dedicated market, encroachment by outsiders, inefficient warehousing, unskilled labor, use of traditional techniques in manufacturing, inefficient disposal of effluent causing health concerns of the residents. Threat Threat Strength Strength Oppurtunity Oppurtunity Weakness Weakness SWOT Analysis Problems & Resolution Problem 1: Unorganized Leather Cluster – thus lower amount of trust in the goods Resolution: Standardization of the process of the industry - Most of the leather industries are unorganized now a day.
Standardization in the process of making leather goods can increase the productivity and also the quality of products with in the given timeline from customer demand, thus increasing trust-value. Resolution: Brand Formation – Accumulation of the goods under a brand. Using marketing channels to promote the brand. The formation of brand includes: * Standard Packaging * Bar Coding * Launching marketing campaigns through different channels * Using “Cause Marketing” to promote the brand through social media - raising the cause of leather goods manufacturing workers. Making the presence of the brand felt through the fashion market Problem 2: Outdated Design – thus inaccessibility to the global fashion market Resolution: Design skill enhancement - Indian footwear from localized leather industry lacks in designs and so they need to be more fashionable through innovative application of Information Technology (IT). Adding IT-savvy services to help them in designing the products with CAD-CAM facilities in localized design studio can help them to come up with innovative designs.
Setting up common convention center for accessibility to computer and IT infrastructure would solve the purpose. Problem 3: Traditional method of manufacturing Resolution: Self Help Groups and Skill up-gradation centers: - Self-Help Groups (SGH) can deliver peer-to-peer information sharing process which in turn can increase unity and friendship leading to greater cooperation. We can also set-up skill up-gradation centers where we can teach them negotiation skills, updating with today’s leather market demands and newest designs so that they can stay up-to date with their competitors.
Problem 4: Lack of warehousing Resolution: Providing a common warehouse for stacking goods of many manufacturers in a common area. Inefficient supply chain Resolution: Use of ERP solution to increase the efficiency of the supply chain. Absence of major market for the Dharavi leather goods Resolution: Forming of a brand, which can slowly capitalize the large whole-sale market in the leather cluster. One e. g. could be catering to the corporate orders, orders from a fashion organization.