Customer Satisfaction Study for National Handloom Dev elopment Corpo ration Corpor Development

2006 - 07
Consulting
X

Research

Training

Academy of Management Studies, 15-Laxmanpuri, Faizabad Road, Lucknow; Tel : 0522 - 2357097, 2356715 Fax : 0522 - 2357097; E-mail : amslkounit2@yahoo.co.in www.amsindia.org

Customer Satisfaction Study for National Handloom on Dev elopment Corpor ati Corpora tion Development

Submitted to : The Managing Director National Handloom Development Corporation, Vikas Deep (10th & 11th Floors), Station Road, Lucknow.

Consulting

Research

Training

Academy of Management Studies, 15-Laxmanpuri, Faizabad Road, Lucknow; Tel : 0522 - 2357097, 2356715 Fax : 0522 - 2357097; E-mail : amslkounit2@yahoo.co.in www.amsindia.org

Contents

1 . Introduction 2 . Research Design 3 . The Findings

1 6 11

1
INTRODUCTION
1.1 Introduction
1.1.1 Handloom is an ancient industry in India. The features of this sector vary across the country. In some parts of Kerala, Tamil Nadu, Assam and Orissa, it has attained the status of a mature industry and in other parts, it is still an enterprise confined to the needs of the household. The last 100 years have seen the growth of mechanized textile production internationally. In part due to competition, handloom has lost much of its market and is almost non-existent in most countries. However, handlooms are still a force to reckon within India and some other Asian countries such as Sri Lanka, Bangladesh, Thailand, and Cambodia. Today, India's textile sector comprises four important segments -- modern textile mills, independent power-looms, handlooms and garments. Though there is a huge, informal tailoring enterprise, it has not been studied or considered worthy of public attention, leave alone policy. There are also sub-sectors like textile machinery manufacturing and spinning sectors, which form part of the textile sector. Though it employs the largest number of people, the handloom sector is considered a sunset industry and there is an air of inevitability given the relentless march of mechanization, modernization and sophistication. Still, there are many advocates of handloom for reasons including ideology, philosophy, sheer love for handloom products and economic arguments. However, irrespective of the policies, projects and aspirations arising out of various quarters, the handloom sector is undergoing changes that are impacting the livelihoods of handloom weavers.

1.1.2

1.1.3

1.1.4

Customer Satisfaction Study for National Handloom Development Corporation

Handloom Sector A Key Player in Indian Economy

1.1.5 While the socio-economic condition of majority of the weavers involved with the handloom industry in the country is nothing to write home about, yet, on the contrary, the recent past has been a witness to a large market for handloom products both domestically as well as internationally. Handloom production has significant contribution to the National GDP and export earnings. According to the Ministry of Textiles, export earnings as late as 1998-99 was Rs.1,956 crore. Current figures are also estimated to be around the same figure. 1.1.6 The handloom sector provides employment to an estimated 12.5 million people and is the largest rural employment provider next to agriculture generating jobs in semi-urban and urban areas of India as well. According to surveys conducted by various research institutions over the recent past, the country has more than 38,00,000 handlooms. In north-eastern States, there are more than 15,00,000 domestic handlooms. Handlooms in north and south India are geared for commercial production for domestic market and also exporting their products abroad. 1.1.7 By some estimates, there are 32 other sectors that are benefiting from the handloom sector, including transportation, financial services, marketing services, service and maintenance services and hotels. Many handloom centres are well known tourist spots, drawing visitors from far places of India and foreign countries as well. Thus, the tourism industry's fortunes are in part influenced by the handloom sector and its fame. 1.1.8 Handlooms have an umbilical linkage with cotton farmers and the rural farm economy. Agricultural labour gets employment in handloom sector during the non-agricultural season. The sector has self-sustaining mechanism, including training for young weavers, irrespective of gender. The inheritance of skills, resources and capacities has remained beyond the realm and reach of any modern training and educational institution. The sustaining of the weaving skill itself has not been dependent on the government or any modern formal institution. There is also inherent flexibility for all types of communities to take up handloom production as a profession. Handlooms are environment-friendly. A handloom is an independent and autonomous technology. Energy impacts are almost zero. The sector thus lends itself to sustainable

1.1.9

Customer Satisfaction Study for National Handloom Development Corporation

evelopment policies aimed at reduction of negative impacts on the environment and ecology. 1.1.10 Despite the obvious advantages associated with the handloom sector in the country, it is still important to note that the sector in India operates within a larger textile industry that is quite different from the one within which it operated in the first half of the 20th century. Today power-looms dominate textile production in India and have encroached upon the handloom sectors traditional market. If many handloom weavers do not have enough raw materials, it is probably because the raw material is being diverted to powerlooms. The steep rise in cotton yarn prices without a corresponding increase in handloom product prices has meant that production in some places has had to be suspended, destroying the livelihoods of handloom weavers and laying off handloom wage workers. 1.1.11 The major handloom States in India are West Bengal, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Assam and Manipur. These 6 States account for three-fourth of handloom weaving in the country. Almost all handloom production in India is for domestic markets. According to the Directorate General of Handlooms, only 1.3 percent of working looms produce for export markets.

Handloom Markets
1.1.12 The market for handloom products in the country is four-tiered and includes The Self-consumption Sector where handlooms are made for household requirements and not for sale, as in the northeast of India. The Rural Market where weavers do the marketing themselves. The Distant Domestic Market largely urban, and which is beyond the reach of weavers. Export Markets

1.1.13 Master weavers and private traders market 90 percent of handloom products in the country. The traders either retail these products through their own outlets or act as intermediaries supplying wholesalers or retailers. The bulk of exports are handled through merchant exporters and manufacturer-exporters the former getting their supplies from manufacturers and master weavers, while the latter having their own production facilities.

Customer Satisfaction Study for National Handloom Development Corporation

1.1.14 The Indian governments policy on handlooms till recently had an obsession with employment generation at the expense of other objectives, such as efficiency and growth. The overall policy of the Indian Government on handlooms revolved essentially around the following four components Focus on forming and strengthening weavers co-operatives as part of a rather complex organizational structure that also included apex bodies at the State and Central levels and to provide inputs and credit and marketing channels to the weavers. Improving productivity and quality through improved looms, imparting new skills, designs and technology to weavers. Provision of subsidies including assured supply of cotton yarn and credit at subsidized rates; and other forms of protection including reservation of certain items for the handloom sector. Setting up of welfare schemes to help weavers improve their livelihood and working conditions. However, realizing the crucially important position of the handloom sector with regard to the countrys economy, the Government has in the recent past, introduced a number of schemes aimed both at the welfare of the weavers involved in this sector, as well as, for strengthening the various associated components, such as quality & prices of raw materials, development of marketing channels, infrastructural investments, improvement & patenting of designs, and the like. Some of the major schemes introduced by the Government for strengthening the Handloom Sector in the country are as enumerated below (A) Development Schemes Deen Dayal Hathkargha Protsahan Yojana (DDHYP) Integrated Handloom Training Project (IHTP) (B) Marketing Schemes Handloom Export Scheme (HES) Marketing Promotion Programme (MPP) (C) Input Related Schemes

1.1.15

Customer Satisfaction Study for National Handloom Development Corporation

 Mill Gate Price Scheme (D) Welfare Schemes Workshed-cum-Housing Scheme (WCH) Weavers Welfare Scheme, including (a) Thrift Fund Scheme (TFS); (b) New Insurance Scheme for Handloom Weavers. (E) Scheme for Central Assistance to State Government for setting up of Enforcement Machinery. Other Schemes Integrated Handloom Cluster Development Programme Mahatama Gandhi Bunkar Bima Yojana (MGBBY). Health Insurance Scheme (HIS) Handloom Mark Scheme 1.1.16 The efficacy, effectiveness & success of any specific scheme can only be vindicated by analyzing its actual impact on the various agencies/institutions that have availed the benefits of the scheme in the recent past and their level of satisfaction regarding the same. Further, an in-depth evaluation also helps in identifying the strengths & weaknesses and earmarking the grey areas of a particular scheme. Evaluating the ultimate achievements and the impact of the various objectives planned & implemented under the scheme not only helps fine-tune the program but also in identifying the possible innovations that can be introduced into the system. In light of this fact, AMS was commissioned to undertake a Customer Satisfaction Study for the National Handloom Development Corporation (NHDC), Limited.

(F)

1.1.17

Customer Satisfaction Study for National Handloom Development Corporation

2
RESEARCH DESIGN
2.1 Customer Satisfaction Surveys the Importance
2.1.1 Throughout the global marketplace, Customer Satisfaction Surveys are often regarded as the most accurate barometers to predict the success of an organization. Because they directly ask about the critical success factors of a business, if done effectively, Customer Satisfaction Surveys can deliver powerful incisive information and provide ways for an organization to gain a competitive edge. Customer Satisfaction Surveys play a major role in assisting the programme managers of any given organization to design and implement a successful customer relationship management strategy by way of gathering, measuring and analyzing valuable information with more accuracy. Customer Satisfaction Surveys help organizations to gather critical feedback from their customer groups regarding the following crucial indicators, namely

2.1.2

Level of satisfaction with the purchases made Level of satisfaction with the services received Likelihood of placing repeat orders Likelihood of recommending the organization to others potential customers

2.1.3

Obtaining customer feedback in a timely and useable format helps ensure that an organization is meeting and hopefully exceeding customer expectations and at the same time also provides insight on areas where changes need to be made for increasing satisfaction and overall success.

Customer Satisfaction Study for National Handloom Development Corporation

1.2.4 Customer satisfaction surveys help an organization in identifying areas of operations that do not meet customer expectations. Not only are customer satisfaction surveys quick and inexpensive to produce, they are also guaranteed to yield invaluable results. Organizations can use the data to implement and revise policies and procedures. 1.2.5 Customer satisfaction surveys often serve as the important first step towards achieving the ultimate goals of exceptional customer satisfaction, loyalty and retention. They provide a foundation on which an organization can start building their customer relationships. Further, a customer satisfaction survey also encourages clients and customers to provide vital feedback on issues that can affect customer retention, including the following

Overall satisfaction Product-specific satisfaction Brand perception Pricing Timeliness of delivery Customer service satisfaction Returns and exchange process satisfaction Interest in new products and services

1.2.6

In light of the aforementioned fact, AMS was commissioned to undertake a Customer Satisfaction Study for the National Handloom Development Corporation (NHDC), Limited. In doing so, specific focus was made on the various customer groups that have been associated with the procurement of two items from NHDC, namely (i) yarn; and (ii) dyes & chemicals.

Customer Satisfaction Study for National Handloom Development Corporation

2.2
2.2.2

Study Objectives
The specific objectives of the proposed study, were as mentioned below (a) To assess the satisfaction levels of the various customer agencies/institutions that have been procuring yarn and dyes & chemicals from NHDC over the last one year period. (b) To study the general perception & expectation of the customers and the extent to which the same have been met. (c) To identify the deficiencies/weaknesses and shortcomings implementation and to suggest methods to overcome the same. in scheme

2.3
2.3.1

Methodology
To begin with, we first collected the detailed list of all the customers who had procured raw materials (Yarn and Dyes & Chemicals) from NHDC during FY 2005-06 from the Corporation. Subsequently, we made a random selection of least one-half (50 percent) of the total agencies for in-depth study. In addition, discussions were also held with various officials, functionaries and programme managers involved with the implementation of the scheme whether directly or indirectly, including the National Handloom Corporation (NHDC) Limited, Lucknow and the various Regional Offices as well. The information with regard to the study was gathered from the following undermentioned sources Agencies/institutions/organizations that had procured yarn and dyes & chemicals from NHDC during the last one year period, including the following Handloom Development Centres; Handloom producers/exporters/manufacturers registered with HEPC and other institutions under the Ministry of Textiles/ Director of Industries/ Handloom Corporations of the States/Union Territories; Approved export houses/trading houses/star trading houses for production of handloom items;

2.3.2

2.3.3

Customer Satisfaction Study for National Handloom Development Corporation

Members of recognized/approved handloom associations; and Non-Governmental Organizations (NGOs)

Other agencies approved by the Development Commissioner (Handlooms), that had procured the aforementioned materials from NHDC during the last one year period.

2.3.4

In light of the geographical locations of the various beneficiary groups, it was initially proposed to collect the information pertaining to the study by soliciting their views and opinions through questionnaires/schedules mailed to them (both by post, as well as, through e-mail). However, despite mailing the schedules to cent-percent of the beneficiary groups and in spite of repeated reminders over telephone, the responses received were almost next to minimal. This in turn, forced us to revisit our methodology and to make personal calls on the identified respondents. In doing so, we were finally able to canvass the questionnaires to a total of 502 respondents amounting to a healthy 30 percent of the universe.

2.3.5

2.4
2.4.1

Key Focus Issues

Some of the key issues probed during the course of the customer satisfaction study, are as mentioned below Customer Level Information

Source of information regarding the scheme Level of satisfaction with the quality of material (yarn and dyes & chemicals) procured Level of satisfaction with the competitiveness of material (yarn and dyes & chemicals) procured Level of satisfaction regarding accessibility of material including time lag between placing of order and actual delivery

Customer Satisfaction Study for National Handloom Development Corporation

Opinion regarding the overall service delivery mechanism of NHDC Suggestions for better service delivery by NHDC

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3
THE FINDINGS
3.1 Background
3.1.1 As discussed in the previous chapter, it is evident that the knowledge of the level of customer satisfaction is essential to the survival of businesses for most modern-day organizations. In doing so, one may well wonder as to how to ascertain whether our customers are satisfied? The best and probably the easiest method to find out whether our customers are satisfied is simply to ask them. In this chapter, we have made an effort to present the perceived opinions and level of satisfaction of the various customer groups of the National Handloom Development Corporation (NHDC) who have been essentially procuring yarns and dyes & chemicals from the Corporation. The overall satisfaction levels of the customers of NHDC have been presented in the form of overall scores on various attributes both region-wise, as well as, at an all-India level.

3.1.2

3.2 Scores on Various Attributes

3.2.1 Before commencing the customer satisfaction study, we held in-depth interacts with the programme managers & officials at NHDC, as well as, with a select band of customers, with a view to gain an insight into the entire business transaction process. This in turn, played a key role in the identification of the key issues that are of importance to the various customer groups. The issues thus identified formed the basic premises for the designing of the customer

3.2.2

Customer Satisfaction Study for National Handloom Development Corporation

11

availability of officials is concerned with Kolkota leading the way with an average mean score of 4.79. 3.2.4 Further, as regards to the issue of giving sufficient time and understanding the specific requirements of the customers, analysis revealed that customers were more or less satisfied on this count across all the six zonal offices of NHDC. However, customers were not to be very satisfied with the amount of time taken by the NHDC to process their respective orders and felt that it would be indeed very helpful if the same could be expedited.

3.2.5

(B). Timeliness of Delivery

3.2.6 On the issue of timely delivery of the products, a lot of variation was observed across the six
zones. As far as yarn is concerned, the regional offices of Hyderabad, Coimbatoor and Panipat had better scores (4 and above) vis--vis other zones (Table 3.2). As regards to the chemicals & dyes, the region of Hyderabad, alongwith Lucknow was among the top.
Table 3.2 : Timeliness of Delivery
Mean Score SI. Particulars Lucknow 1 2 3 Yarn Chemicals Dyes 3.86 4.00 4.00 Panipat 4.70 3.80 4.00 Kolkota 3.71 3.75 3.60 Bhopal 3.43 2.50 Hyderabad Coimbatoor 4.02 4.12 4.11 4.19 3.98 4.02

3.2.7

Further, regarding the issue as to whether the customers are provided adequate & timely information by NHDC in case of delays in delivery of their respective orders, the response was a mixed one with around one-half (across all the six zones) of them replying in affirmative.

3.2.8

When asked to rate the quality of response that they usually receive from the NHDC officials at the time of making an enquiry about their orders, majority of the customer groups expressed their satisfaction with the response that they received from the officials.

Customer Satisfaction Study for National Handloom Development Corporation

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(C).

Product Quality
products being supplied by them is of the best possible quality. Keeping this fact in mind, the various customer groups of NHDC were also asked to rate the quality of the various products (including yarn, chemicals & dyes) that they had procured from the Corporation. The scores of the various regional offices of NHDC regarding this issue have been presented in Table 3.3 given below.

3.2.9 For any business venture to be a successful one, it is imperative that the quality of the

Table 3.3 : Satisfaction with the Product Quality

Mean Score SI. 1 2 3 Particulars Lucknow Yarn Chemicals Dyes 4.21 4.55 4.33 Panipat 4.61 4.20 4.45 Kolkota 4.29 4.75 4.40 Bhopal 3.57 4.50 Hyderabad 4.11 4.46 4.45 Coimbatoor 4.04 4.18 4.35

3.2.10 As is evident from the table, majority of the customers across all the regions expressed their satisfaction with the quality of the products being supplied through NHDC. Though not directly involved with this aspect, it is nevertheless important that regular inspections should be carried out by the officials at the mills to ensure that the quality of the products is maintained at the desired levels. 3.2.11 Further, as regards the capability of NHDC in ensuring the availability of the desired products in accordance to the requirements of the customers, the scores were observed to be on the higher side across all the three categories of products. The details have been presented in Table 3.4.

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customers included factors such as delay in processing of order, poor yarn quality, delay in reimbursement, restricted credit, non-availability of the desired product, problems related to transportation & delivery, changing interest rates (in case of delay in payment from the customer), settlement of bills and the like. 3.2.21 These customers were further asked to give their satisfaction on the way their problem was addressed by NHDC. The scores have been presented in Table 3.8 given below.
Table 3.8 : Grievance Redressal Mechanism
Mean Score SI. Particulars Lucknow Panipat 1 2 3 Ease of Availability of the Concerned Officials Amount of Time taken to Solve the Problem Satisfaction with the Solution of the Problem 3.45 2.55 2.91 4.25 3.25 2.50 Kolkota 3.60 3.80 4.00 Bhopal 3.75 3.25 3.75 Hyderabad 4.43 4.14 4.00 Coimbatoor 3.67 3.61 3.28

3.2.22 On the issue of time taken to resolve the problem, all the zones (except Hyderabad) scored on the lower side. Furthermore, customers were also not satisfied with the outcomes of the solution.

3.2 Overall Customer Satisfaction & Loyalty

Overall Customer Satisfaction
3.2.1 Finally, considering each aspect of their association with NHDC, the customers were also asked to give an overall rating of satisfaction with NHDC. The top box score with regard to this parameter has been provided in Table 3.9 given on the next page

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Table 3.9 : Overall Satisfaction

SI. 1 2 3 4 5 6 Particulars Lucknow Panipat Kolkota Bhopal Hyderabad Coimbatoor Top Box Score* (4 & 5) 70.59 94.12 64.29 66.67 86.96 91.51

* Figures are in Percentages

3.2.2

As is clearly evident from the table, the customers from the regions of Panipat, Hyderabad and Coimbatoor appear to be pretty much satisfied with more than four-fifth of the customers from these three regions providing a high satisfaction rating (4 or 5 out of 5) to the NHDC. However, at the same time, in the remaining three zones, the proportion of satisfied customers was observed to be slightly low. The overall mean satisfaction score of NHDC stands at a very high of 4.12, as is indicated in the zone-wise overall satisfaction scores presented in Chart 3.1 given below.

3.2.3

Chart 3.1: Overall Satisfaction Score

5.00 4.00 3.00 2.00 1.00 0.00 Hyderabad Lucknow Kolkota Panipat Bhopal Coimbatoor 3.71 4.47 3.86 3.89 4.1 4.17

Customer Loyalty
3.2.4 On the issue of continuance of association with the NHDC in future, all the six zones had a high score. Majority of the customers expressed their intention to do business with NHDC in the near future as well (Chart 3.2).

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Chart 3.2: Intention to do Business in Future

4.80 4.60 4.40 4.20 4.00 3.80 3.60 3.40 4.68 4.53 4.33 3.93 4.20 4.33

Hyderabad

Lucknow

Kolkota

Panipat

Bhopal

3.2.5 Furthermore, regarding the issue as to whether they would recommend others to do business with NHDC, majority of the existing customers replied in the positive. The zone-wise scores have been presented in Chart 3.3.

Chart 3.3: Intention to Recommend Others

4.80 4.60 4.40 4.20 4.00 3.80 3.60 4.65 4.14 4.00 4.00 4.27 4.04

Hyderabad

Lucknow

Kolkota

Panipat

Bhopal

3.3 Satisfaction Scores on Key Attributes

3.3.1 In this section, we have presented the attitudes and opinions of the customers regarding the services delivered to them by the National Handloom Development Corporation (NHDC). In order to understand what customers perceived to be important in the delivery of this kind of service, customers were first asked to rate the importance of key attributes. To provide these ratings, customers were first asked to recall their previous interactions and transactions with

3.3.2

Customer Satisfaction Study for National Handloom Development Corporation

Coimbatoor

Coimbatoor

19

other similar organizations and subsequently to rate the perceived importance of the components. Using the same attributes, the customers were then asked to rate their satisfaction levels with the recent interactions & transactions they had with the NHDC in recent times. 3.3.3 Further, both the importance and satisfaction ratings have been combined to develop a compositional model in order to determine those components which require most improvements from the point of view of improving the customer satisfaction with the services delivered by NHDC.

Importance Ratings
3.3.4 Respondents were asked to rate the importance of a range of aspects concerning transactions they have had with an organization similar to the NHDC. In doing so, the scale used was a 5 point scale, where 1= Not At All Important and 5 = Very Important. The scores of all the six zones have been combined together in order to present All-India Scores, as provided in Table 3.10 given below.

Table 3.10 : Importance Ratings for Key Attributes

SI. Attributes Low 1 2 3 4 5 6 7 Process of Placing an Order Time Gap between Order and Delivery Reliability in Timely Delivery Price Competitiveness Product Quality Availability of Credit Facilities Grievance Redressal 4.56 3.04 1.52 1.52 1.27 1.01 9.87 Importance Rating (%) Medium 20.25 15.19 9.62 16.20 10.38 7.85 20.00 High 75.19 81.17 88.86 82.28 88.35 91.14 70.13 Mean Score 4.04 4.24 4.31 4.14 4.33 4.36 3.83

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Key Findings
The mean importance scores ranged from 3.83 to 4.36. The overall mean importance
score for the range of attributes measured was 4.18.

As part of the analysis, we attempted to rank the attributes into two groups in terms of
their importance to the customers. Analysis revealed that among the customers of NHDC, availability of credit facilities, product quality, reliability in timely delivery were considered to be the most important aspects of the delivery of service given by an organization similar to NHDC.

Satisfaction Ratings
3.3.5 Furthermore, the respondents were also asked to recall their business transactions with NHDC and were asked to rate their level of satisfaction with the previously listed attributes. The findings of the same have been presented in Table 3.11.

Table 3.11 : Satisfaction Ratings for Key Attributes

SI. 1 2 3 4 5 6 7 Attributes Low Process of Placing an Order Time Gap between Order and Delivery Reliability in Timely Delivery Price Competitiveness Product Quality Availability of Credit Facilities Grievance Redressal 0.76 3.54 5.32 3.04 3.29 4.29 3.29 Satisfaction Rating (%) Medium 7.34 9.37 5.57 11.65 4.81 13.10 13.67 High 91.90 87.09 89.11 85.32 91.90 82.61 83.04 Mean Score 4.24 4.00 4.09 4.05 3.70 4.22 3.97

Relationship between Performance and Importance

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