Palestine - Empowering Talented Refugee and Low-Income Artisans in the West Bank
Child's Cup Full
Child’s Cup Full (CCF), a non-profit organization established by Dr. Janette Habashi, focuses on employing as many women as possible to provide dignity and empowerment through work and share the Palestinian culture via their craft. There are currently 6 full time and 29 part time artisans benefiting from employment. CCF has 2 branches under its umbrella: Darzah and Zeki. Darzah is the flagship brand that showcases Tatreez embroidery, a cultural sign of resistance perfected through generations. These motifs are featured on women’s apparel and household items. Zeki products are produced with recycled materials, designed to expose children to Palestinian culture while having the added benefit of encouraging development through play.
With nearly 30% of the female population unemployed, CCF’s mission remains to increase employment in the West Bank through sales growth and reduced costs. Given the restrictions imposed by the Israeli occupation, the work of CCF is not only important in promoting dignity in women through self sufficiency but is becoming a significant contributor to raising awareness of their plight. Despite the oppressive conditions, CCF has done an impressive job increasing their positive impact for Palestinian women.
What was the problem?
CCF has seen remarkable sales growth over the past few years and expects that to continue. In 2021, the organization provided 16,300 labor hours- 6,000 hrs for part-time labor and 10,300 hrs for full-time labor. Unfortunately, missed opportunities to generate more revenue and profits from operations have limited the organization's ability to provide more labor hours by employing more women (in line with its mission). We first hypothesized that by phasing out low-performing products and redirecting that labor to more popular products or repricing popular but ill-priced products, they could recoup lost revenue due to misuse of labor hours. In support of this, we wanted to focus on retraining artisans to gain the skills necessary to increase the production of popular products.
Additionally, with Dr. Habashi already spending over 30 hours a week on CCF tasks, sustainable growth is not attainable without additional human resources that could support this growth. CCF is also losing its primary marketing personnel, which forces Dr. Habashi, and her assistant, Nicolette, to absorb these responsibilities. The lack of inventory transparency between the US and Palestinian operations made it more difficult, leading to unfavorable shipping times and ill-informed production planning of goods.
What did we do?
Before traveling to Palestine, we were opportune to travel to Dr. Habashi's location to understand better her role within CCF and the US fulfillment process. While there, we conducted an updated inventory count that could feed into a centralized inventory system across CCF. In Palestine, we created a form that would track the daily inventory within the unit and could be integrated into the inventory system for all of CCF, allowing inventory transparency.
Our team also completed a margin analysis for each CCF product to determine which products were most profitable based on our labor and materials costs assumptions. We then tested those assumptions in-country to provide a more accurate analysis that would inform the minimum pricing of goods to ensure a profit.
What was the turning point?
In Palestine, we had the opportunity to accurately capture the labor and material costs that informed our margin analysis and the following recommendations. This exercise also illuminated a labor gap not captured by sales data. Through observation and conversation, we deduced that nearly 35% of paid labor hours remained uncaptured by sales. We hypothesized that those hours were tied to new product designs and slow-moving inventory.
Knowing that CCF is looking to employ more women, we wanted to set up a structure that effectively reduced this gap through efficient production planning to minimize slow-moving inventory. Done successfully, this would free up liquidity and enhance profits for the organization. In addition, by phasing out low-performing products, redirecting labor to more popular products, and repricing certain products, they could recoup lost revenue due to misuse of labor hours. Accordingly, we performed trend analyses and leveraged our knowledge of sales trends to build a production schedule that mirrored the prior year's sales information.
What was the recommendation?
Team Palestine made 6 overarching recommendations to ensure that CCF captures maximum value from its operations: Inventory tracking, production planning, limiting discounts on non-bulk sales, minimum pricing, reallocation of labor hours towards more profitable goods, and reorganizing responsibilities to include increased human resources.
Using the google form and the centralized inventory count, CCF would have the ability to manage the quantity of all products in each location. This information would directly impact the production planning and minimum inventory goals for key products.
Our team recommended a production calendar that will help CCF plan production by highlighting what/when to produce and in what quantities. Using this information, CCF can schedule its production and shipping at least three months in advance to alleviate the pressure that comes with the peak sales periods and produce what is known to sell, thereby lessening the slow-moving inventory challenge.
We also recommended that CCF eliminate non-bulk sales discounts across Darzah and Zeki. Doing this helps the organization save ~21k in 2021, which more than covers the value of its year end losses. If, however, CCF cannot completely eliminate discounts on non-bulk sales due to its sales channels and existing customer expectations, it could reduce the discounts, e.g., from 13% to 10% for Darzah and from 33% to 30% for Zeki. Doing this in 2021 would have saved ~4k covering the total loss value for that year.
Using the updated margin analysis, we suggested minimum pricing for discounted, wholesale, and retail goods to reduce this loss. For products that would price out of the market with a price increase, we recommended reallocating those labor hours to better-performing products. Our margin analysis also captured potential savings in having the part-time artisans produce the tatreez designs instead of the full-time artisans, leading us to recommend tareez labor be done outside of the unit.
Finally, as CCF continues to grow, its team will need to grow with it. It would be advantageous for Dr. Habashi to onboard a US fulfillment personnel to free her time up for the more managerial aspects of running CCF. Additionally, hiring a full-time marketing director would allow CCF to continue partnering with influencers and retailers to continue increasing product sales and furthering their mission of employing Palestinian women.