Supply Chain Networks

Dharavi is a frenetic engine of entrepreneurship characterized by variety, innovation, recycling, and reuse. While the Indian economy is in a historic slump that is predicted to take years to recover, residents and workers in Dharavi are starting to return to the city as industries and their allied supply chains are beginning to open up.

Dharavi is a frenetic engine of entrepreneurship characterized by variety, innovation, recycling, and reuse. It generated more than $1 billion a year in activity before the COVID-19 pandemic hit. It houses a base for many industries including pottery, leather tanning, recycling, and garment manufacturing. While the Indian economy is in a historic slump that is predicted to take years to recover, residents and workers in Dharavi are starting to return to the city as industries and their allied supply chains are beginning to open up.

The scale of Dharavi has created a market that supplies not only the hyperlocal and local, but also the global market. Existing in the heart of Mumbai, the residents of Dharavi present a unique transect that does not solely depend on the formal city for employment but rather, creates opportunities for themselves. The support of various local and national organizations has ensured that Dharavi does not become one of the many Slum Rehabilitation (SRA) projects in the city, thereby protecting the many industries existing within it. Dharavi is often commended for its live-work culture, its shared and flexible use of resources, and the way it organically leans towards being a circular economy.

The retail, manufacturing, recycling, and wholesale supply chains operating out of Dharavi bring in anywhere between $660 million- 1 billion annually for the Mumbai economy.

Pottery 

As one of the largest potter colonies in the country, Kumbharwada is home to people from many different regions. It represents six generations of immigrants from Saurashtra who have lived here since 1932. While about 90% of the potters are from Gujarat (Saurashtra, Kathiyawad, Kutch), the balance is a mix of Maharashtrians and Muslims. There are approximately 600 households in Kumbharwada that comprise the pottery industry. 

The raw clay is sourced from factories near Rajkot in Gujarat and from some parts of Maharashtra such as Kalyan, Belapur, Bhiwandi, Mumbra, and Thane. Chawal ki mitti (mud from the rice fields), chini mitti (marble mud), kaali mitti (black mud), gerua (red mud), and pahaad ki mitti (mountain mud) are some of the kinds of clay that come into Dharavi. Once the clay reaches Kumbharwada, it is processed in various ways, depending on the potter's style. While the men are the primary artisans in this industry, the women facilitate it by collecting and storing water for the preparation of the clay. Their contribution is key because water is available only between 6-9 am. This process uses up to 400 liters of water for 20 kgs of prepared clay. Kumbharwada often hires daily wage workers from Maharashtra and Uttar Pradesh to carry, store and mold the clay. The clay is then molded and kiln-fired into diyas (earthen lamps), matkas (pitchers), gamlas (plant pots), and karwas (tiny earthen pots).

As a major pottery hub, Kumbharwada not only attracts buyers and sellers from several parts of Mumbai, but also other states such as Gujarat, Rajasthan, and West Bengal. Products from this market are also imported to countries such as the United States, United Kingdom, Saudi Arabia, Europe, and Australia.

 

Leather

The leather businesses in Dharavi are remnants of the old, flourishing leather industry that dominated the area during the 1950s and 1960s. It was one of the first few industries to be established in the neighborhood, with the inflow of Muslim tanners from Tamil Nadu in the early 19th century. While these tanneries were banned in 1996 over pollution concerns, leather manufacturing, polishing, coloring, and retail became dominant.

As of today, only the first and last processes are being conducted in Dharavi. The raw leather comes from tanneries located in Kolkata and Chennai. They are then treated with sodium sulfide, left to dry, and processed. The processed hides are finally crafted into finished leather products.

These finished products are then sold in national and international markets, and even locally at the famous Sion Bandra Link Road leather market. A majority of this business is dependent on the tourists that come to Dharavi since they bring with them the potential to turn into long-term clients. They are also exported to various parts of India, Dubai, Oman, Qatar, Saudi Arabia, Kuwait, Bahrain, and the UK, most of which are bulk orders from corporate giants. 

 

Garment 

Dharavi has over 3000 small-scale garment factories that operate within its economy. The raw material is brought from Ichalkaranji, Surat, Ahmedabad, and some parts of Uttar Pradesh. Dharavi shares its garment manufacturing with places in Delhi, Bareilly, Dadar, and Bhiwandi. There is also a subnetwork of resellers that imports finished garments from Delhi as a local wholesale business strategy. This is a small niche of the market that depends on the cheaper manufacturing costs in Delhi and the other places as compared to Mumbai. The garment industry in Dharavi is one that hosts all the links in the supply chain- manufacturers, wholesalers, retailers, and consumers on a large scale. 

Products manufactured in Dharavi are then exported to parts of Mumbai, Madgaon, Panjim, Mapusa, Nasik, Pune, Aurangabad, and Ahmednagar. While a good portion of this industry caters to the local market, some warehouses export to distant markets such as the United States where they are sold through large chain stores. Finished products are also exported to African countries such as South Africa, Sudan, Rwanda, and Kenya.

 

Glassworks

The high price of purchasing glass from Indian manufacturers has resulted in a manufacturing industry that mainly exports its finished products to international markets. While there are many manufacturers in the country, scrap glass and resale glass are the two types of glass markets that currently function in Dharavi. The resale glass industry imports finished products from Malaysia, Iran, China, and Indonesia, while the scrap glass is bought from the local agents at old construction sites. This scrap glass is then refurbished and sold in the local shops. It is due to the expensive nature of glass transportation that the glass is mostly sold locally. The location of these units is also strategically placed on the main street to simplify the loading and unloading of materials.

An interesting addition to the supply chain are workers from Bareilly, Uttar Pradesh. As a traditionally skilled community, they migrate to different parts of the country and abroad to countries such as Dubai, Oman, Kuwait, Bahrain, Saudi Arabia and Mauritius to contribute to the glass industries. There has been a consistent flow of these workers to Dharavi as part of not only the glass industry but also the garment and construction industry.

 

Construction 

The houses in Dharavi are home-financed incrementally over decades. Earlier, walls were mostly made from corrugated metal sheets on a framework of wooden lumber. But these days almost all of the construction is done in RCC or steel channel frames with brick walls. The roofs are mostly built out of metal or asbestos corrugated sheets. The rebars and steel channels are readily available in Dharavi as well as in nearby places like Buyculla and Kurla. The sand needed for construction is imported from Virar-Bhoisar or Kalva-Mumbra, while the glass is locally sourced from Dharavi itself. 

Owing to the easy availability of most construction materials, transportation costs are fairly low. This makes the supply chain network of Dharavi’s construction business reasonably tight as compared to other businesses. The construction workers, most of whom are migrant workers from other parts of the country, play a vital role in this industry. This was observed during the ongoing COVID-19 pandemic, as construction sites were put on hold for over 6 months until the workers returned to Dharavi.

 

Conclusion

As Dharavi begins to open up and recover from the devastating effects of the COVID-19 pandemic amidst political turmoil and one of the worst economic slumps the country has seen since India’s independence, one of the most active questions that we face is - how can we build back our societies to be more sustainable? Most of the supply chains that contributed to Dharavi’s economy were severely affected by the pandemic from both ends- the raw material stopped coming in, migrant workers went back to their villages, and export ceased to exist. On taking a closer look at the material flow through the Dharavi market, it becomes increasingly apparent that there are large overlaps that, if acknowledged, would push this organically developing circular economy to being one that is completely unique in the way it functions. Considering the water shortages, many industries could share this valuable resource in a sustainable manner. Additionally, the transportation logistics of a city taken over by trucks have resulted in severe disaggregation of the supply chain. The overlaps in this system have the potential to shape a less carbon-intensive future for the transportation industry that can then contribute to the growth of Dharavi as a unique local and global business. What if we could streamline these processes through the creation of a unifying online platform?