THE NATIONAL HANDLOOM DEVELOPMENT CORPORATION CASE STUDY

Q.1 Is the NHDC a distributional channel? Give reasons for your answer. Ans.: National Handloom Development Corporation Ltd (NHDC) is a national level agency that assists the speedy development of the handloom sector. Yes, according to me NHDC in a way is a distribution channel because like any distribution channel it provides a link between the producers and the buyers. It covers all the action like procurement and supply of inputs at reasonable prices, augmenting the marketing efforts of state handloom agencies, and initiating overall development in the handloom sector in India. It performs all the functions of a distributing channel like collecting information from the buyers and matches them with the production schedule of the weaving mill, identifying spinning mill which can supply requisite quantities of yarn at a preferred price and finally helping in the transaction closed by notifying both the mill and the buyer. Q.2 Analyze the activities of the NHDC in terms of the basic discrepancies between the production and the consumption function Ans.: The weavers in India are scattered across all parts of the country and mostly exists in village clutters. The producers and buyers of yarn are also highly scattered. The seasonal demand for yarn, unpredictable market, different varieties of yarn, etc creates discrepancies in the production and consumption process. NHDC through its network of offices collects orders from the buyers and matches them with the production schedule of the weaving mills. Once the NHDC identifies the spinning mill which can supply the requisite quantities of yarn at a preferred price both the buyer and the mill are notified, and further transaction takes place between the buyer and the mill. It is well equipped to offer standard quality of yarn made of fibres such as cotton, silk, woodjute, acrylic, etc.

Q.3 What is the value addition that the NHDC provides to the weaversand producers. Ans.: NHDC has large network and seven regional offices and fifteen branches across country. It ensures regular supply to its 1271 regular buyer agencies getting their required variety and quality of yarn to meet the present competition in the field of traditional and non-traditional

handloom production. It also allows the weavers to get yarn without paying transportation costs Q.4 In coordinating a scheme such as the mill-gate scheme, how does the NHDC reinforce its value addition in terms of its main activities? Ans.: In mill-gate scheme, NHDC allows the weavers to get yarn without paying the transportation costs. The provision of the scheme also includes freight reimbursements, subsidizing depot operation and mobile van running charges. The scheme is limited to certain agencies deemed to be eligible for getting reimbursements. According to this scheme, all eligible agencies can place their indent with the NHDC indicating type and quantity of yarn, preferred mill, etc. After the receipts of these indents, the NHDC will verify the availability of the yarn from preferred source and convey terms and conditions to the agency. Upon the confirmation of financial of financial arrangements by the agency, the NHDC will inform spinning mills to send the yarn by their transporters to the agency, Upon, the receipt of the yarn, the agency will pay transportation cost to the transporter and thereafter claim for reimbursement to the transportation charges from the NHDC by producing relevant documents Thus, in this way, NHDC reinforce value addition in terms of its main activities.