Tuesday, December 1, 2009

The Magic of Dabbawala

I recently attended a programme titled “The magic of the dabbawala” (thanks to my friend Deepak Menon) organized by National HRD Network (Chennai Chapter) at Hotel Savera, on 27th November 2009. The lecture was given by Mr. Manish Tripathi who is the Chairman of the Dabbawala Foundation. When he entered the meeting hall with his ‘dabba’ and said “Good Evening Chennai” he sets the tone for the programme which was full of wits and humour. Though the English came with chaste Marathi dialect we can enjoy the programme as he kept on pulling the legs of the MBA graduates when he compared the dabawala with that of an ordinary organization. The BBC has produced a documentary on dabbawalas, and Prince Charles, during his visit to India, visited them and even invited them for his marriage. Owing to the tremendous publicity, some of the dabbawalas were invited to give guest lectures in top business schools of India, which is very unusual. Most remarkably in the eyes of many Westerners, the success of the dabbawala trade has involved no advanced technology. Quiet amazing isn’t it? Want to know how the dabbawala system works please read on…

The Statistics of dabbawalas

· History : Started in 1880
· Average Literacy Rate of employees : 8th Grade Schooling
· Average Area Coverage : 60 Km per Tiffin Box
· Employee Strength : 5000
· No. of Dabbas / Tiffins Boxes : 2,00,000 Tiffin Boxes per day
· No. of transactions : 10 Million Transactions per month
· Time taken for delivery : 3 hours
· Cost of Service : Rs. 250/- to Rs. 350/- per month

The History

This service was originated in 1880. The origin of the Dabbawalas lunch delivery service dates back to the 1890s during the British raj. At that time, people from various communities migrated to Mumbai for work. As there were no canteens or fast food centers then, if working people did not bring their lunch from home, they had to go hungry and invariably, lunch would not be ready when they left home for work. Besides, different communities had different tastes and preferences which could only be satisfied by a home-cooked meal.

Recognizing the need, in 1890, Mahadeo Havaji Bachche, started a lunch delivery service with about 100 men. For his enterprise, Mahadeo recruited youth from the villages neighboring Mumbai, who were involved in agricultural work. They were willing to come as the income they got from agriculture was not enough to support their large families, and they had no education or skills to get work in the city. In 1930, he informally attempted to unionize the dabbawallas. Later a charitable trust was registered in 1956 under the name of Nutan Mumbai Tiffin Box Suppliers Trust. The commercial arm of this trust was registered in 1968 as Mumbai Tiffin Box Supplier's Association. The present President of the association is Sopan Laxman Mare. Nowadays, the service often includes cooking of foods in addition to the delivery.

Their mission is to serve their customers -- who are mainly office goers -- by delivering their lunch boxes at their doorstep on time. They have 5,000 people on their payroll to ensure the prompt delivery of lunchboxes within Mumbai; these 'dabbawalas' travel by local trains and use bicycles or walk to reach every nook and corner of Mumbai. The lunch boxes are delivered exactly at 12.30 pm. Later, the empty boxes are collected and taken back to the homes, catering services or hotels before 5 pm. In fact, the next time you forget to strap on your watch before leaving for office, don't be surprised to find it in the lunchbox container brought by the dabbawala from your home! On an average, every tiffin box changes hands four times and travels 60-70 kilometres in its journey to reach its eventual destination. Each box is differentiated and sorted along the route on the basis of markings on the lid, which give an indication of the source as well as the destination address.

Although the service remains essentially low-tech, with the barefoot delivery men as the prime movers, the dabbawalas have started to embrace technology, and now allow booking for delivery through SMS. An on-line poll on the web site ensures that customer feedback is given pride of place. The success of the system depends on teamwork and time management. Such is the dedication and commitment of the barely literate and barefoot delivery men (there are only a few delivery women) who form links in the extensive delivery chain, that there is no system of documentation at all.

A simple colour coding system doubles as an ID system for the destination and recipient. There are no multiple elaborate layers of management either — just three layers. Each dabbawala is also required to contribute a minimum capital in kind, in the form of two bicycles, a wooden crate for the tiffins, white cotton kurta-pyjamas, and the white trademark Gandhi cap (topi). The return on capital is ensured by monthly division of the earnings of each unit.

The service is uninterrupted even on the days of severe weather such as Mumbai's characteristic monsoons. The local dabbawalas at the receiving and the sending ends are known to the customers personally, so that there is no question of lack of trust. Also, they are well accustomed to the local areas they cater to, which allows them to access any destination with ease. Occasionally, people communicate between home and work by putting messages inside the boxes. However, this was more common before the accessibility of instant telecommunications.
The brand ambassador of “Dabbawalas” none other than Prince Charles!

Six Sigma Rating

The efficiency of the process has earned the dabbawalas a six-sigma rating from Forbes magazine. The Six Sigma quality certification was established by the International Quality Federation in 1986, to judge the quality standards of an organisation. According to an article published in Forbes magazine in 1998, “one mistake for every eight million” deliveries constitute Six Sigma quality standards. The Six-sigma rating means that they have a 99.99 % efficiency in delivering the lunch-boxes to the right people. That put them on the list of Six Sigma rated companies, along with multinationals like Motorola and GE. Achieving this rating was no mean feat, considering that the Dabbawalas did not use any technology or paperwork, and that most of them were illiterate or semiliterate. Apart from Forbes, the Dabbawalas have aroused the interest of many other international organizations, media and academia.

The logistics of how the dabba is delivered

A collecting dabbawala, usually on bicycle, collects dabbas from homes or from the dabba makers. The dabbas have some sort of distinguishing mark on them, such as a color or symbol. The dabbawala then takes them to a designated sorting place, where he and other collecting dabbawalas sort (and sometimes bundle) the lunch boxes into groups. The grouped boxes are put in the coaches of trains, with markings to identify the destination of the box (usually there is a designated car for the boxes). The markings include the rail station to unload the boxes and the building address where the box has to be delivered. At each station, boxes are handed over to a local dabbawala, who delivers them. The empty boxes, after lunch, are again collected and sent back to the respective houses.

i) The first dabbawala picks up the tiffin from home and takes it to the nearest railway station.
ii) The second dabbawalla sorts out the dabbas at the railway station according to destination and puts them in the luggage carriage.
iii) The third one travels with the dabbas to the railway stations nearest to the destinations.
iv) The fourth one picks up dabbas from the railway station and drops them of at the offices. The process is reversed in the evenings.

Decoding the dabba

The dabbawalas adopt a colour coding system to ensure the dabbas are picked and delivered at the correct destinations. The reverse of dabba is normally painted with codes. See the following picture to know how the coding system is followed.

Dabbawala Disciplines
"Error is horror," is the operational motto. In the event of a dabbawala meeting with an accident en-route, alternative arrangements are made to deliver the lunch boxes. For example, in a group of 30 dabbawalas catering to an area, five people act as redundant members; it is these members who take on the responsibility of delivering the dabbas in case of any untoward happenings.

The dabbawalas must be extremely disciplined. Consuming alcohol while on duty attracts a fine of Rs 1,000. Unwarranted absenteeism is not tolerated and is treated with a similar fine.

Every dabbawalla gets a weekly off, usually on Sunday.

The “Gandhi cap” serves as a potent symbol of identification in the crowded railway stations. Not wearing the cap attracts a fine of Rs 25. In fact, Richard Branson, the maverick businessman who is never shy to promote himself and the Virgin brand, donned a Gandhi topi and dhoti (the dabbawalas' signature dress code), during the launch of Virgin's inaugural flights to Mumbai.

There are no specific selection criteria like age, sex or religion; however, women dabbawals are very few in number. The antecedents of the candidates are thoroughly verified and a new employee is taken into the fold for a six-month probation. After that period, the employment is regularised with a salary of Rs 5,000 a month.

Dabbawala and the Management perspective :

The dabbawalas are a prime example of management guru Michael Porter's Five Forces Theory at work.

Porter's theories, which are the basis for classical management principles, define the scope and nature of competition a company faces to attain leadership. Surprisingly, the dabbawalas are following these very principles in spite of their ignorance of the same.

i. Threat of new entrants:

According to Porter, the threat of new entrants is dangerous to any organisation as it can take away the market share the organisation enjoys. Started in 1880, the experience curve of the 125-year-old dabbawala service serves as a huge entry barrier for potential competitors. Besides, it would be difficult to replicate this supply chain network that uses Mumbai's jam-packed local trains as its backbone.

ii. Current competition:

Porter's five forces theory states that strategy is determined by a unique combination of activities that deliver a different value proposition than competitors or the same value proposition in a better way. The dabbawalas do face competition from fast food joints as well as office canteens. However, since neither of these serve home food, the dabbawalas' core offering remains unchallenged. They have also tied up with many catering services and hotels to cater to the vast number of office goers.

iii. Bargaining power of buyers:

The delivery rates of the dabbawalas are so nominal (about Rs 250 – Rs. 300 per month) that one simply wouldn't bargain any further. Also, their current monopoly negates any scope of bargaining on the part of their customers. Thus, we encounter a perfect win-win combination for the customers as well as the dabbawalas.

iv. Bargaining power of sellers:

The dabbawalas use minimum infrastructure and practically no technology, hence they are not dependent on suppliers. Since they are a service-oriented organisation, they are not dependent on sellers to buy their product. Hence, sellers do not assume any prominence as would be the case in a product-oriented company. The strategy map framework in Porter's theory allows companies to identify and link together the critical internal processes and human, information and organisation capital that deliver the value proposition differently or better. Human capital is the greatest driving force in the dabbawala community; as a result, they are not dependent on suppliers or technology, thus negating the seller's power in the equation.

v. Threat of a new substitute product or service:

As substitutes to home cooked food are not seen as a viable alternative in the Indian scenario, the threat to the dabbawala service is not an issue at least in the foreseeable future. This gives them a leeway to probably expand their already existing network into newer cities as demand increases in these places as well.
Learnings from Dabbawalas – What they say :
"As management students, there was a lot that we learnt from this lecture," says Karthik A J, a first year management student at NITIE. "The belief that technology is indispensable to solve complex problems was shattered. FMCGs and other industries can learn a lot from the simple supply chain logistics and efficient reverse logistics (transfer of empty lunch boxes to the source location)," he adds.
The concept of multi-level coding (colour coding on the lunch boxes for identification) and reverse logistics can be implemented in industries as diverse as soft drinks (where logistics becomes an important aspect, transporting the filled bottles to retailers and collecting empty bottles back to the plants), pharmaceuticals and other FMCG areas. For example, can the bar coding mechanism (a computerised format) which is prevalent and expensive, be simplified with just colour/ number coding? In small and medium scale organisations where bar coding systems would require a lot of resources, these systems can prove to be very efficient and cost effective. Moreover, the dependence on technology could be drastically reduced.

The learnings for a working executive are enormous too. Managers and executives alike spend a lot of their valuable time learning various concepts in people and time management. Newer mechanisms like Customer Relationship Management, etc, have been developed to assist executives in the same. But, in the midst of implementing technology and IT, basic principles in people management, sustainable relationship development and customer satisfaction have lost their meaning. Our friendly dabbawallas are a perfect example of an important principle of both business and management -- the thirst to serve customers in a simple yet effective fashion without falling into the technology trap. I think this is an aspect which needs to be re-learnt and implemented in any organisation today.

The most enduring lesson that we learnt was to put the customer ahead of everything else. It is said that when Prince Charles expressed a desire to meet them during his visit in 2003, the dabbawallas requested him to schedule the meeting such that it did not interfere with their mid-day delivery timings!!!.


Mumbai dabbawallas by Kiran Raveendran, ICFAI
What you can learn from a dabbawalla – Harsha Venkatesh
Dabbawala - Wikipedia,
Official website of Dabbawalas mydabbawalla.com

1 comment:

Dreamer said...

A good read.. !!
This is a perfect example of "Keeping it simple"..