The article was co-written along with Sarmistha Padhi, a PGDM BM student (2010-12) at XIM Bhubaneswar
Ask Rajesh, an IT professional working in Tata Consultancy, one thing that he recalls about Mumbai and the answer would come in a flash, the Mumbai Dabbawallas. Fresh home food delivered at your office everyday at the exact time. No question of any delay, satisfaction guaranteed.
Like Rajesh, there are thousands of satisfied customers who would speak volumes on the efficiency of the Dabbawallas. It is not for nothing that they have been rated “Six Sigma” by the Forbes magazine. One may question: What is the big deal in transporting dabbas from one place to another? What is the big hype about this all? If you too have this question tinkering with your grey cells then consider this:
- Dabbawallas serve an ever-growing customer base of 350,000.
- The Dabbawallas are ISO 9001 certified.
- Only 1 error caused in 600,000 deliveries. This has resulted them in achieving the six-sigma status.
- To top it all the dabba system is not managed by a pass out from an Ivy League school. However, people who are mostly illiterate run it.
It is no secret that supply chain management has moved out of the shadows when it comes to business strategy. Organizations that once focused primarily on distribution networks, profit differentiation and improved marketing for their success have now embraced integrated supply chain management as a pivotal strategy component for growth and profitability in the global economy.
The supply chain management system that the Dabbawallas have devised and the effectiveness with which they have been managing it for the last 125+ years is something that modern businesses of today can learn a pointer or two from.
The Dabbawalla’s Supply Chain
Fig 1 : The Supply Chain Of Dabbawallas
In the dabbawalla’s supply chain system, dabba-gatherers pick up the lunches from various households (Customer Source) which are then transported – via bicycle – to railway stations, where they are bucketed-marked by destination, and placed on the train. When they reach their destination, dabbawallas grab their buckets and get them to the office workers (Customer Destination) who ordered them. After a few hours from delivery, the dabbawallas start the reverse (collection) process, which involves collection of the tiffins from the offices and delivering it back to the place from where they had collected it (Customer Source).
What Modern Businesses Can Learn From Dabbawallas SCM Practices
1) Distribution Network Configuration: This is a basic requirement of SCM and determines the success of the entire supply model. The core components being number, suppliers, warehouses and human resource management.
In case of dabbawallas, they have a very efficient management of the above core requirements. They divide the human resource available with them as per the workload, which is the same for every worker (around 35 tiffins) and the number of employees’ increase with the increase in the work- load. Wherein they have a policy that an employee cannot move out without getting a replacement. This prevents hampering of the flow of work.
They segregate the source for the collection as per the area and location so that it is easier for the assigned worker to collect them in the least time and then they get the tiffins to the warehouses, which stand to be the source stations for their operation where they are well accumulated and managed. All the tiffins are well marked in a typical manner, which represents all the information right from the source to delivery address, and the warehouse it needs to be assigned to for delivery (the stations). This gives an excellent model for the management of warehouse and inventory. There again, they are accumulated in the second warehouse (the destination station) where the same process is used to segregate the boxes as per the destination station wherein the same codes used in the boxes are used.
This shows the level of management and coding that they employ without any use of external technocratic systems. In today’s world of IT, the dabbawallas provide an important lesson to businesses that it is not necessary to have a high end IT system or technical tracking of inventory to build an effective supply chain. After all, without any technology entities in their supply chain the dabbawallas have managed a Six Sigma level. So just because your competitor is investing millions into building an IT system to improve their supply chain, you need not blindly splurge money into the same. While effective use of IT is important, what is more important is having a proper distribution network
2) Distribution Strategy: This is again a vital part in supply chain and in case of dabbawalla’s they have a very effective strategy, which needs to be learnt . They have a well-managed segregation system where the boxes are segregated in the destination station as per the location of delivery and then assigned to the particular delivery people. The arrangement is in such a manner that all the workers are comfortably equipped so as to ensure timely delivery which they promise ( three hours). In some regions where the number is more than usual, they use a bigger carrier with multiple workers to transfer them. Hence, this is so well managed that even though the system may have error in allocation but their expertise never lets a single mistake happen. The entire system used by them is manmade and with no further investment as they generally use wooden racks for the entire transport. Bicycles and wooden carts, which do not have any investments, are used in delivery. Thus, the distribution costs are saved. The transport is for longer distances between the source and the destination, which is generally covered in local trains, which has the minimum cost for the transport that can be availed also with the minimum time consumption so here also there is effective saving.
Thus, it can be seen that at every step in the supply chain, dabbawallas use the most efficient and effective means of transportation. This is done in such a way that operation costs are kept to a minimum and at the same time the delivery time is not compromised upon. Thus effective management of means of transport and carriage is a major differentiator for any business and would help in obtaining better profits viz a viz competition.
Fig 2 : The Dabbawalla Distribution System
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