Saturday, April 25, 2009

Mymbai Dabbawalas


Introduction
Dabbawalah is a person in the Indian city of Mumbai who is employed in a unique service industry whose primary business is collecting the freshly cooked food in lunch boxes from the residences of the office workers (mostly in the suburbs), delivering it to their respective workplaces and returning back the empty boxes by using various modes of transport. ( www.wikepdeia.org definition)
Based in the cosmopolitan city of Mumbai (Bombay), the financial hub of the country with over 15 million population from different ethnic backgrounds over an area of over 436 sq. kilometers the Mumbai dabbawalahs are a premier example of operational excellence with six sigma level (Forbes) having over 99.999999 % efficiency in their operations of delivering lunch boxes to over 200,000 customers. They have an operational force of about 5000 dabbawalahs who generate annual revenue of INR 36 million. Their organization has a simple two tire structure with 13 directors including a president, a vice president, a secretary and a treasurer. At the next level there are the 5000 dabbawalahs who come from the same Marathi community of villages near Pune in Maharashtra who coordinate with the few Makadams (involved in their training, customer acquisition and payment receipts). They have never had a strike since 1890 when the organization started under Mr. Mahadeo Havaji Bacche with about 100 uneducated dabbawalahs. Today the work force has an average education of VIII standard. They follow a strict code of discipline like no alcohol, dress code and ID card. They are highly regarded by the general public and often given precedence during their operations in traffic and train boarding/deboarding.
Their operations involve delivering lunch boxes to 200,000 office/school going people who leave early from their homes to travel to their work places. Since they prefer to eat home made food, but due to timing/ freshness issues are unable to take food along with them utilize the dabbawalahs service who pick up their lunch boxes from their respective homes and deliver it to their work place at lunch time picking them back after use and delivering them back to their homes. All this operation is done everyday in a time window of 10 AM to 4 PM. They charge a nominal fee of INR 300 per lunch box with few exceptions, do not use any motor vehicle or technology, they are dependent upon the Mumbai suburban local railway network and still use hand carts, bicycles and bags to carry the boxes making a monthly salary of 5000-8000 INR on a profit sharing basis in addition to a diwali bonus.
Their distribution system is completely error free with three essential critical to quality factors ie.
1. Everyone should have their own lunch boxes and no one else’s.
2. It should reach them neither too early nor too late.
3. The cost should be as low as possible to persuade the customers for using this service.
They have their own system of coding that even the semi literate dabbawalahs can decode and operate based on intuitive and simple system. It includes the start point, delivery point, train station, building number and the floor number. The dabbawalahs are highly efficient and punctual while collecting the 20 each allotted boxes with their path of travel based on the shortest distance to reduce time delays. They collect these lunch boxes at the train station where sorting is done and then taken to their destinations through the train and delivered through the hub and spoke network style of operations. Then an hour later a reverse journey starts which ends when the boxes are delivered back to their homes. All this is based on a highly intuitive system which would have needed a complex mathematical algorithm to design if was done by computers. They do not use modern technology till off-late when they laid their hands upon cheap mobile phones to connect and coordinate while also taking orders on SMS. Their commitment, friendliness and customer orientation are the hallmark to their entire network.
Important Points
1. One error in 6 million deliveries, 99.999999 % efficiency.
2. No strike ever in history of operations.
3. Only investment is human endeavor.
4. Employees are stakeholders.
5. No use of technology.
6. Since members of the same community, they have strong ties with their organization.
7. Strict discipline followed which has made them the hallmark of efficiency and hardwork.
8. Support from the locals and the railways have made their system invincible.
Critical Success Factors
Flexible Travel Infrastructure: The suburban railways in the city has a train nearly every 4-5 minutes which provides them with a cheap and reliable connecting mode of transport that has enabled them to maintain their low costs.
Customer Co-operation: The dabbawalahs are very well treated by the locals and their consumers do not make them wait for the lunch boxes. This also enables them to operate ona very tight schedule.
Appropriate Network Structure: their hub-spoke structure ate the distribution and the collection centre with the shortest path involved is a critical factor, though this was intuitive in this case, most networks with such complexities are designed using advance algorithms.
Unique Coding System: Their unique codes that they put on each of the lunch boxes enables even the illiterate dabbawalahs to understand and deliver the boxes at the right place at the right time. It consists of small codes comprising of alphabets and numbers and is uniformly applied throughout the city.
System Redundancy: Each member of the group serving a particular area knows the entire route of all other members; this helps them to deliver in case one of their fellow members falls sick.
Transport & City Geography: The dabbawalahs are evolved over the city’s network of rails, and since Mumbai is a more or less linear they have an ease of operations, a feature which has made them unique and non imitable in other cities.
Organization Structure & salaries: irrespective of the role played by the members of the fraternity, all Dabbawalahs get equal salaries in their organization which is relatively flat with only two levels of hierarchy which has essentially kept the fraternity members satisfied and the organization free from the usual organizational hassles and red-tape. Further each member is motivated, disciplined and feels himself as a vital part of the organization.
The Process Integration: All other points aside, it is the most important factor in this entire case where a group of 500 men actually make sure that 200,000 transactions are done in a matter of 3 hours and then repeat the entire process in reverse with in the next three hours. Their own time estimates for the entire time required for the transaction is matched with the available time meeting the expectations of the consumers and providing them with utmost satisfaction while they themselves have to play their part that they do not waste any time in supplying the filled and empty lunch boxes during this operations.
Further more they have never involved technology in any part of their system which is in entirety handled by little educated men out of intuition and hardwork.
They have maintained a lean just in time system which gives them maximum operational efficiency with least involved resources attributing the low costs offered to their customers which makes their a value offerings competitive. This is evident by the 5-10 % growth in their customer base. Recently they have launched their own website called www.mydabbawallas.com and customers can now also book orders through SMS.
Key Learning in Supply Chain Management Theory
In this case the key learnings emphasize on the aspect of operational implementation. Supply chain management is all about efficient implementation. It is also a classic case of Stakeholder Value prospective which emphasizes on responsibility over profitability and sees the organization as a coalition which must serve all people involved.
It also highlights how Just in Time practices can be developed over time without any means of technology as long as operational efficiency is maintained. The dabbawalahs network is timed such that their entire operation fits into the time available without any failures.
They have intuitively incorporated features like
1. Waste Minimization
2. Flat organizational structure
3. Complexity Reduction & Transparency
They have also emphasized on the Low cost part of the entire operations. As the system involves only human labor and no technology otherwise, their total costs have been remained drastically low and that has kept them competitive in the market despite of other option for their customers. In case of technology implementation like RFID etc, the cost will increase making their entire business model unviable. Thus it illustrates that in order to integrate the supply chain in a business model, the value generated as the out come of the chain should always remain higher than the price that the consumer is charged.
They have also developed a small coordination network in their supply chain with their customers at both the ends. This is very important as partnering with your customers actually promote higher efficiencies in the system. If they were to be kept waiting by their customers, their much championed time accuracy would not have been achieved. Thus the concept of extending your value chain also plays an important role here. Also the support system by the local railway administration as in to provide them with loading unloading facility is another example of the same partnering.

Conclusion
The Mumbai Dabbawalahs are an excellent case of operational efficiency which has been recognized by business schools the world over. They have also highlighted the fact that to achieve all these it is primarily important to have the dedication of one stakeholder to have the same mission as their organization. This allows them to incorporate all ways and means to adjust to the system and devise techniques that will keep the costs low, the system of operation simple, time limits well defined while maintain a zero error rate.
Rather than designing a system with these qualities and then implementing it to achieve success it is better if we can develop them with the core objective in mind and they will automatically be incorporated in the system as is evident in the case of Mumbai dabbawalahs.

1 comment:

chand said...

the dabbawallas of mumbai z d story of "SIX sigma" business enterprise ..the success of the business lies in the complex yet well coordinated exercise that is carried out on the streets of mumbai day after day ...what is the secret behind the efficiency with which their business is conducted ????welll the answer wud be punctuality n time management .... watever b the circumstances the dabbawallas never get delayed even by a few minutes..

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