Fabindia: A craftsman who is a shareholder

Fabindia's success has benefited from its very unique business model, which encourages artisans who provide goods to the company to become shareholders of the company and to incorporate these suppliers into the company system. "The sale of a partial stake in a company to a supplier is rare in retailing, especially when most partners have little culture." "If Fabindia can succeed, it could be a model for companies in developing countries," Businessweek commented. "40 years ago, American lad John Bussaire, who worked for the Ford Foundation in New Delhi, India, liked the Indian handicraft culture, and he was determined to develop traditional Indian hand-woven fabrics." He founded the Fabindia Company in India in 1960. Today, the company has opened 97 stores in India's big and small cities.　　Last year, the company's turnover reached $65 million trillion, a 30% increase from the previous year. The manual technology occupies the absolute dominant position in the Fabindia product: All material comes from the natural fiber, cotton, hemp, silk, wool ...　　By combining India's native craftsmanship with international fashion design, the competition produces hand-woven, handmade, hand-embroidered or home-handmade products that span time and amaze modern people, regardless of color or pattern. Industry analysts, Fabindia Company's success has benefited from its very unique business model-to encourage the company to provide goods to the craftsmen to become shareholders of the company, these suppliers into the company system. "The sale of a partial stake in a company to a supplier is rare in retailing, especially when most partners have little culture." "If Fabindia can succeed, it could be a model for companies in developing countries," Businessweek commented. "Since its establishment, Fabindia has developed nearly 200,000 commodities in order to cater to the different tastes of consumers across the world through the" Indian design craze ". "Any retailer would say it's crazy. "The company's current CEO William Bussaire said.　　In order to manage such a large commodity, Fabindia installed a Computer Management system to track the flow of goods in all 97 stores. Now, with the development of Fabindia, it has relied entirely on 22,000 weavers, woodblock printing workers, carpenters and organic farmers to provide it with handmade goods for sale. "We seem to be in the hands of the 17th century artisan artist supplier and 21st century consumer." "said William. [Page] share the risk of mutual benefit William and his employees work together with craftsmen to make them fit into fabindia and into the modern economy.　　Initially, this only means helping craftsmen improve their traditional rustic designs to meet the tastes of more fashionable urbanites while ensuring the stability of product quality. Two years ago, William went a step further. He has set up 17 centers throughout India, each of which is centered aroundEstablished by traditional handicrafts in this particular area. In turn, the centres were formed as companies, and their craftsmen combined to account for a 26% of the company's shares. Febindia encourages all craftsmen to buy company shares at a price of 2 dollars per share. "This is a reasonable price for a craftsman who sells hand-woven cotton products to fabindia and earns 100 of dollars a month." William explained.　　Meanwhile, Fabindia, which is wholly owned by Searle, controls 49% per cent of each subsidiary, with the remainder held by other Fabindia employees and private investors. Today, about 15,000 craftsmen have become corporate shareholders. Fabindia and craftsmen with this ownership structure to achieve a double surplus, the company not only to ensure the stability of supply, weaving, dyeing workers and other personnel have also obtained a stable income. "Companies and individuals work together to benefit and share risks."　　"William has a clear confidence in this model," he said. Muhammad Asin Chippa is the beneficiary of this model. He lives in a dusty village in the Indian town of Rajasthan, where he plays a small job in fabric dyeing.　　He has been supplying fabindia for more than 20 years. Now, 52-Year-old Chippa has lived a prosperous life. His annual income grew with the development of Fabindia, rising from $8500 trillion in 1989 to $170,000 today. Chippa shares a total of 560 companies and hopes to buy more in the future. "But because of the popularity of the company's shares, few people want to sell."　　He joked, with a depressing look. In fact, craftsmen have only two opportunities to transfer their shares each year. Although the volume is small, it is enough to push the stock price 3 times times to 6 dollars per share.　　Chippa and other shareholders can also be divided into dividends according to their respective performance. The next 4 years, William plans to open 150 more stores in India.　　But there is a problem in front of him, a company's rapid development process has to consider the question is: How to overcome the natural limitations of this business model?　　While the method of selling some of the company's shares to suppliers helps to lock in suppliers and maintain the stability of supply, it is not easy for William to expand on a large scale. The data show that it takes 2 hours to weave a yard of traditional clothing that Indians are accustomed to wearing, and now the fabindia demand is tens of thousands of yards per month.　　According to William, the company's craftsmen should be 3 times times as fast as he would like to be, which means building more regional hubs. At the same time, maintaining consistent quality standards is also a challenge fabindia needs to face. Even if he can solve both of these problems, the company also faces an annoying inventory control problem. "Japan's just-in-time production inventory management is difficult to achieve. The operation here takes years.　　"said William.Of course, William has tried all sorts of solutions to date. One of the more proven approaches is to decentralize responsibility along the supply chain to the regional centres.　　He expects that in the future, the centres will be able to go further in distribution, warehousing and design. To achieve this goal, Searle arranged bank credits for the centres. In this way, each centre will be able to control its own operating capital.　　He also arranged for some staff at the center to conduct basic business training at the Fabindia headquarters in New Delhi. 2009-07-30 Total No. 346