www.ibsedc.org IBS Bamboo House India: Effective Project CDC Management? Due to uncontrolled exploitation of natural resources and poorly planned developmental activities the world today is facing severe environmental problems Various entities like government, non-governmental organisations, philanthropists, human right activists, etc., are intensifying their synergic efforts to maintain the sustainable development and encourage eco- friendly products as the existing practices lead to severe environmental degradation. However, the results of these endeavours are yet to be seen. In this context, social enterprises' (both for-profit and non-profit enterprises) have a significant role to create awareness. Bamboo House India (BHI) is one such social enterprise, established to encourage 'Green products' and promote *Green livelihood* for rural artisans. Bamboo House India: Creating Green Livelihood Bamboo House India (BHI), a social enterprise which uses bamboo as an economic driver, was established in 2008 by two first generation entrepreneurs, Prashant Lingam (Prashant) and Aruna Kappagantula (Aruna), in Hyderabad, India. BHI was setup with an aim to create a long-term, sustainable and non-migratory livelihood for the rural and tribal artisans in the bamboo sector, The couple initiated 'Green Livelihood' - an initiative that recognises and values the importance of preserving the environment in its current form and helps in reversing environmental impact and generating livelihood.Bamboo House India: Effective Project Management? Exhibit I Market Potential of Bamboo Sector . The Indian Government is planning to consider bamboo as major export item for a global market value of INR 500 billion ($11.9 billion) Indian Government is planning to concentrate mainly in the north-eastern part of the country which would constitute about 27% of the world market by 2015 Indian Government is aiming to create around 8 million jobs in the bamboo industry, which in turn will help in lifting 5 million families out of poverty. By doing this, the government hopes to reduce the migration of rural workers to urban areas for livelihood The Planning Commission of India launched the National Mission on Bamboo Technology and Trade Development. The objectives of this Mission are to launch several initiatives by focusing on bamboo as a key species and conducting research in the development area. Compiled by the authors from http://planning.up.nic.in/innovations/inno3/fw/bamboo.htm BHI's main objective is to connect the tribal artisans with the mainstream market and concentrates on using locally available bamboo in order to develop contemporary lifestyle products that suit the market tastes and demands. The company identified that the bamboo market has a great potential and if properly tapped, can provide 5 million people with livelihood. BHI promotes viable financial, social and environmental solutions to the rural poor without people migrating. However, BHI commenced fortuitously, as the founders never intended to start a entrepreneurial venture and were oblivious of the market potential of bamboo and its products. The couple wanted to buy some furniture for their home and desired to have something that is eco- friendly and finally zeroed in on bamboo furniture. Since they were not satisfied with the locally offered bamboo furniture designs, they browsed the Internet to know about the bamboo furniture outlets in India. They learned that bamboo furniture in India is being imported from countries like China, Indonesia, Malaysia, etc., at high prices ranging above INR 1 lakh ($200) and is only confined to high-end customers in the metros. After a rigorous search, they found that people in the north-eastern states of India, make bamboo products and more than half of the population's livelihood depends on bamboo. This triggered them to look into the dynamics of bamboo sector and learn more about bamboo products.Bamboo House India: Effective Project Management? After a thorough research, the couple came to know about the bamboo artisans of Katlamara, a village in situated in Tripura located on the Indo-Bangladesh border. Therefore, in order to know what is needed to make good quality bamboo products and analyse the artisan skills, they travelled to Katlamara. Having observed the wide range of bamboo products and their usage, the couple decided to establish a business in the bamboo sector. Prior to the starting their business, they studied the domain area for 6 months and did a meticulous research on its marketability. Being novices in business, knowing the risk factor was very essential for them. Though investing in an untested business was risky, the duo stepped ahead without bothering about return on investment. Before setting up the business, they travelled across India - especially the north-east and met many bamboo artisans. They learned that the artisans were highly skilled and few of them had even received awards from the President of India and UNESCO. However, these artisans were not fairly paid and had to do petty jobs to meet ends. The founders even learnt about the cultivation, harvest, treatment process of bamboo and also the problems related to its cultivation. They found, through research, that bamboo can save our planet in 10 different ways. They studied the nature and characteristics of bamboo trees and found that it helps in the regeneration of the environment as 1 hectare of bamboo can lessen 62 tonnes of CO, per year when compared to 15 tonnes of CO, per year by forest (Annexure D). They also came to know that at any given point of time, bamboos develop cracks and they can be controlled if proper care is taken from sapling to harvest stage. Besides, they identified the legalities and regulations in the bamboo sector. Bamboo, originally a grass, under the Forest Act 1927, is treated as an equivalent to a tree and needs special permission from the Forest Department to be harvested. Other regulations of the Forest Conservation Act 1980 and Dwellers Act 2006 are also applicable to bamboo. The Indian forests fall under the concurrent list of constitution where both the State and Central Governments can enact their laws. Bamboo is harvested across the world but it is limited in India. Even if bamboo is grown in private lands, the law does not permit its harvesting and transportation. However, it was identified that Tripura is the only state where private cultivation and harvest of bamboo is allowed. It is home for the artisans and also the best bamboo species - Thrystostachys Oleverii or Kanakais - available in the world. It is flexible, with a diameter of 15-55 mm at the base, with a height of 60-80 feet, which is achieved in 4 years and is suitable for furniture, handicrafts and building houses. Due to the availability of bamboo only in selected places, BHI is finding it difficult to connect the artisans. The two varieties of bamboo that BHI works with - Aleverii and Balcoa - are available in Tripura and the other north-eastern states of Nagaland and Mizoram while another variety of bamboo named Stricter is available in parts of Andhra Pradesh.Bamboo House India: Effective Project Management? In the initial stages of their research, the duo discovered through the Planning Commission report-2003, that the estimated market demand for bamboo-based products in India by 2015 is around INR 45,000 crore, of which bamboo furniture is estimated to be INR 3,625 crore and bamboo housing market stands at INR 1, 100 crore. Before starting the business, to study the market feasibility, they conducted an exhibition of bamboo (furniture and life style) products, with the support of Andhra Pradesh Technology Development and Promotion Centre (APTDC). It received very good response showing a great market potential. This further encouraged Prashant and Aruna to go ahead with the business. Initially, as part of their business, BHI developed a project plan comprising all the proposed activities that must be completed as per schedule for the timely completion of the project. The plan describes the various phases of the project and deliverables at each stage. BHI developed a network of project activities to execute them properly without any time lapses. Initially, they planned to execute all the activities sequentially but found it to be time-consuming and also expensive. Then, they reviewed the possible project networks for their proposed project. The total activities identified in the project, their time duration, the preceding condition of all the activities are shown in Exhibit II. If the proponents execute the project activities in sequence, then the total time duration for execution of the project is 415 days. Hence, eventually, the proponents developed a suitable project network, which helped them in reducing the total project execution time, significantly. Exhibit II Project Network Information for Bamboo House India (BHI) Activity Description Preceding AD (AID) Activity (Days) A Market Study & Conceptualization of the Idea 80 B Project Definition A 45 C Resources Planning A 30 Contd...Bamboo House India: Effective Project Management? D Customer Acceptance Plan B,C 30 E Communication Plan D 30 F Financial Plan E 10 Quality Plan E 30 H Risk Plan 10 I Market Awareness Plan & Identification of Buyers Market 30 Branding 20 K Franchising 30 L Logistics JK 30 M Expansion L 40 Total duration of all the activities 415 Ald: Activity Identification; AD: Activity Duration Source: "Interview conducted with the founders of BHI, Prashant Lingam and Aruna Kappagantula, by Dr.V. Srinivas", IBSCDC, January 30# 2010 Establishing a business model is very critical for any business and though the duo had enough knowledge and planned for a structure, establishing a business model was not a stress-free task. Since the couple had no idea as to how the business operations needed to be carried out, they decided to collaborate with institutes which were already working in the bamboo sector like National Institute of Design (NID), National Bamboo Mission (NBM), National Mission on Bamboo Applications (NMBA), Confederation of Indian Industry (CII), Indian Institute of Technology (IIT-Delhi), Tripura Bamboo Mission (TBM), APTDC, Infrastructure Leasing & Financial Services (IL&FS) and Andhra Pradesh Forest Department (APFD). Aruna and Prashant observed that the government policies towards bamboo were very conducive with NBM's budget being more than INR 1,000 crore and NMBA budget outlay above INR 500 crore.' However, these policies did not provide any employment opportunities to tribal artisans. Even institutions like National Institute of Design (NID), Ahmedabad, which discovered the superior characteristics of Oleverii in 1976, could not create a sustainable livelihood for theBamboo House India: Etfcctivc Project Management? artisans and restricted itself to training them in making bamboo products. Gradually, these NID trained artisans took up other work or migrated. Even though enough attention was given by the government, neither the artisans nor the bamboo products could connect to the mainstream market due to lack of market linkages. It was during this time that Blll chose to reverse the ongoing process by handling both the supply and demand sides of the product. They began adopting artisan communities in Tripura and gave them creative freedom by not mentioning any specic time period in which the product has to be delivered. Initially, convincing and communicating with the artisans was a big problem as language was a barTier and artisans were apprehensive about the business. However, Aruna's Bungle speaking skills were a saving grace and moreover, being provided with financial incentives without any commitment tor delivery of products for the next 6 months were seen by die artisans as an added advantage. Yet another challenge was lack of mobile network connections and unavailability ot'telephone booths in the close vicinity, which caused hindrance for the smooth work flow. Even today, the company nds it ditticult to communicate and explain the designs to the artisans. Usually, the couple draws few designs on a paper and sends them Through post, which takes almost 2025 days to reach the artisans. The artisans start working on the design and they tend to put their own inputs into it as they do not understand the requirements of the market, which sometimes results in deviating from the exact design. As such, the company does not maintain any specic quality measurement scale but, \"Yes, based on our domain knowledge, we prepared our own benchmark for quality as there were no standards to follow; even today we have our own inhouse quality benchmarks,\" Prashant added. The operations ot'Bl 11 start at the plantation stage itself. Plantations are done through the tissue culture process wherein the bamboo takes 4 years to grow hilly to make any product out of it. As of now, the company is dependent on the forest resources and needs permission from the Forest Department to harvest the same. The harvested bamboo then has to be treated to prevent it from decaying. Later, it has to be shade dried for 90 days. Meanwhile, the artisans receive the designs from the company, which considers customers' specications. Along with the designs, the artisans are given the product quantity and 100% advance. The company is involved in complete value chain, starting from selection of bamboo to the end product. It arranges raw material for artisans through the Forest Department and supports them {artisans} at each and every stage. The artisans work from two places the [ndoBangladesh border and Nagaland. Kashtam aiyna,,santhosam aiyna...du Bamboo House India: Effective Project Management? In the Indo-Bangladesh border, a group of 125 artisans (100 men and 25 women) work as a single community on creating 60 new designs. The place is rich in the bamboo species, Oleverii, which is thin (the diameter of the bamboo pole being less than or equal to 2.5 inches) and natural in colour. This species is mainly used in making small items like bags, baskets, gift items, carvings, etc. In Nagaland, group of 30 artisans are working on creating another 60 designs, in different places, in a radius of about 1,100 kilometers. The species of bamboo cultivated here is black and bulky used in making furniture. These groups would take anywhere between 2-6 weeks to make the product depending on the design and quantity. The movement of products from two places - Nagaland and Indo-Bangladesh is as shown in Exhibit III Exhibit III Transportation Cycle at BHI 1100Kim 1100 Km Nagaland 30 Artisans Indo-Bangladesh Border 115 Arthans work as a single community Enished products Moving finished products Tripura . Agartala Moving finished products . Hyderabad Prepared by the authorsAs transportation of finished products (Annexure II) in small batches is not feasible, the products are kept in a storage area till the container is loaded completely. Then they are shipped to Agartala and from there to Hyderabad. These shipments are done through various logistic service providers - XPS, Gati, etc. The products are delivered to five showrooms - one each in Hyderabad, Visakhapatnam, Vijayawada, Mumbai and Chennai or delivered to the customers (like resorts, restaurants) directly. However, the transportation of the finished products costs more than double the cost of the material used in making the product. Of the final cost of the product, 15% goes for transportation, 60% to the labour, 5% for material used, 5% for administration and the remaining 15% is distributed between the organisation and the franchisee. To minimise the high transportation costs, the company decided to move the goods in a more economical way i.e., transferring through locally available trucks. Though the cost is less compared to the organised means of transportation, the company is facing many challenges (Annexure III) such as weight specification of 9 tonnes of load per trip. If the load weighed is less than or more than 9 tonnes, objections are raised to transfer the goods. Similarly, No Objection Certificate (NOC) has to be obtained from the Forest Department to ship the product from the place of production to the place of consumption. Apart from the high costs, another issue that grabs attention is the amount of damage that is caused to the products during transit. Approximately 30% of the consignment reaches the destination with damages. Although an artisan is called to fix the damages once in 6 months, it costs nearly INR 20,000 to the company, which is much more than the current margins earned by the company. The company is contemplating on strategies to reduce transportation difficulties and the accompanying costs. Annexure I Bamboo - Its Advantages Renewable Depending on the species, bamboo can be harvested in one to five years versus 10-50 Resource years for most softwoods and hardwoods. Thereafter harvests are possible every second year for up to one hundred and twenty years the yield (weight per acreage and year) is up to 25 times higher than that of timber Hardwoods like oak take at least forty years to mature before they can be harvested. Almost 1 million acres of forests are lost each week worldwide to deforestation. Bamboo's versatility as a substitute for hardwoods offers a chance to drastically reduce that figure and protect the forests that we have left Contd...Bamboo House India: Effective Project Management? Absorbs greenhouse gases Bamboo absorbs carbon dioxide and releases 35% more oxygen into the atmosphere than an equivalent stand of hardwood trees Amazing growth rate Some species of bamboo grow more than three feet each day! No plant on the planet features a faster growth rate. When it is harvested, it will grow a new shoot from its extensive root system with no need for additional planting or cultivation Very little waste After harvesting, virtually every part of the plant is used to make a wide variety of products. From soil-enriching mulch to beautiful furniture to chopsticks, every part of the plant can be utilized Versatility Bamboo can replace the use of wood for nearly every application. Paper, flooring, furniture, charcoal, building materials and much more can be made from bamboo. What's more, bamboo fibers are far stronger than wood fibers and much less likely to warp from changing atmospheric conditions. No fertilizer, pesticides, or herbicides needed. Unlike most cash crops, bamboo requires no agricultural chemicals to thrive. Unlike cotton, which is one of the most intensely sprayed crops in the world and rapidly depletes the nutrients in the soil, bamboo sequesters nitrogen and cultivation does not add chemicals to the environment Soil protection Once hardwood forests are clear-cut and the stumps are burned to provide fertilizer and space for growing crops, erosion inevitably occurs as the topsoil and nutrients are washed away by rainfall. The eroded soil then clogs rivers and streams and affects the lives of people and animals living downstream. Bamboo roots remain in place after harvesting where they prevent erosion and help retain nutrients for the next crop Economic development In less developed countries where unemployment leads to civil unrest, bamboo production and the manufacturing of bamboo products provides job opportunities in areas that desperately need social and economic stability. The market potential of bamboo is estimated to be 26000 crores by 2015 and if tapped in a proper way bamboo can help more than 5 million of our population cross the poverty line Bamboo grows in a variety of Bamboo can grow in arid regions where droughts cause other crops to conditions fail and since the roots are left in place after harvesting, it helps to preserve vital moisture in the soil. From low wetlands to higher elevations in the mountains, bamboo thrives in a wide range of climates Contd...Optimism and cultural In a fractious world where wars are fought over resources, the cooperation increasing popularity of bamboo products provides an opportunity for diverse cultures to settle their difference through trade and cooperation that benefits everyone. Can bamboo save the planet? The answer to that question remains to be seen. But this amazing plant and its surging popularity in a huge variety of products offers mankind a chance to enjoy many of the comforts of modern life without causing irreparable damage to our environment. Source: "Why Use Bamboo": http:/www.bamboohouseindia.org/bamboo.asp Annexure II End Products of Bamboo Contd...Compiled by the authors Annexure III Challenges that BHI Faces Challenges Problem Description Scalability The persisting problems with procurement of raw material, production, logistics, limited finances, lack of a strong brand image, lack of proper distribution channels, etc., are posing difficulties for the company to scale up. Branding People are unaware of bamboo products and the brand. The company is in a dilemma as to what is considered in branding -The products or community or the social cause? Pricing The company doesn't follow a standard pricing model and the price varies with product design and customer specification. It has no methods of estimating the costs for customised orders. Contd...Logistics One of the major challenges the company is facing is the logistics cost. The logistics cost is more than half of the product material cost. One container load is shipped in every 2-3 months and 30% of it is segregated as damage. Buyer Different customers prefer different types of bamboo products, so the company is finding it Mapping hard to understand the consumer profile. Distribution To achieve the desired results, the company should find as to which distribution model is Model appropriate - franchisee, company-owned outlets or no-stocking distributors. Partnership Working with the industry and technology partners has benefited the company but at the same Decision time, because of the costs it is facing a dilemma whether to continue or part ways