MUMBAI DABBAWAALA –

SUPPLY CHAIN CASE STUDY

S H I P R A T I WA R I

2 0 1 3 M B A - 0 2 7

INTRODUCTION

A dabbawala, is a person in the city of Mumbai whose job is to carry

and deliver freshly made food from home in lunch boxes to office

workers. Tiffin is an old-fashioned English word for a light lunch,

and sometimes for the box it is carried in. Dabbawalas are

sometimes called tiffin-walas.

For the efficiency of their supply chain it has been claimed that this

virtually achieves a Six Sigma performance rating, (i.e. 99.9999% of

deliveries are made without error, he is at CMMI level 6.

125 years old and growth 5-10% annually (NY Times-2007).

Highly specialized trade.

Represented Maharashtra – Republic day 2010.

CONTENTS

• Three Point Formula

• About NMTBSA

• Some Facts

• Organizational Structure

• Internal Assessment

• Supply Chain and Logistics Study

• Porter’s Five Force Model

• Economic Analysis

• SWOT Analysis

• HR Practices

• Management Learnings

• Competitive Advantage

• Achievements

• Conclusion

THREE POINT FORMULA

Discipline.

Code of conduct.

Hard work.

WHAT IS NMTBSA?

(NUTAN MUMBAI TIFFIN BOX SUPPLIERS ASSOCIATION)

• History : Started in 1890

• Charitable trust : Registered in 1956

• Avg. Literacy Rate : 8th Grade Schooling

• Total area coverage : 60 km

• Employee Strength : 5000

• Number of Tiffin's : 2,00,000 Tiffin Boxes i.e 4,00,000 transactions every day.

• Time taken : 3 hours

FACTS

• Error Rate : 1 in 16 million transactions

• Six Sigma performance (99.999997)

• Technological Backup : Nil.

• Cost of service - Rs. 300/- to 350/- month.

• Standard price for all (Weight, Distance, Space)

• Rs. 70 to 80 Cr. Turnover approximately.

• “No strike” record as each one a share holder

• Earnings - Rs. 5000/- to 6000/- per month.

• Diwali Bonus: One month’s extra payment

from customers.

ORGANISATIONAL STRUCTURE

PRESIDENT

VICE PRESIDENT

GENERAL SECRETARY

TREASURER

DIRECTORS

MEMBERS(5000)

MUKADAM

13 Members

A) ZERO % FUEL

B) ZERO % INVESTMENT

C) ZERO % MODERN TECHNOLOGY

D) ZERO % DISPUTES

E) 99.9999% PERFORMANCE

F) 100 % CUSTOMER SATISFACTION

VIEWS

• People study business books and then practice. We practiced first and have now become case studies” Raghunath Medge (President)

• “It’s a model of managerial & organizational simplicity” C. K. Pralhad

• DABBAWALA AS MARKETING RESOURCE

• Marketing pamphlets with the “Dabba”.

• Sticker, Tag and Sample Piece of Goods with “Dabba

DISCIPLINE

• No Alcohol Drinking during business hours• Wearing White Cap during business hours• Carry Identity Cards

Code of conduct

• Rs 500- Drinking on duty

• Rs 100- Smoking on duty

• Rs 25- Not wearing white cap

• Rs 25- Not carrying ID card

• Rs 1000- Leave without intimation, sacked if repeated in 2-3 instances

CASE STUDY : TBSA

TIFFIN BOX SUPPLIERS ASSOCIATION

How do they do it…?

• Operations

• War against Time

(10.30 – 1.00)

• The Code

• Logistics/Supply

Chain

• Internal & External

Assessment

Executive Committee

(5 members)

Teams of 20-25 headed by a

group leader

Individual dabbawallahs

workload: Collect from home –35

tiffins

Delivery at office –35 tiffins

Return empty tiffins to home –35

tiffins

SUPPLY CHAIN OF DABAWAALA

Pick up Dabba from Residence/Caterer

and bring it to Andheri Station.

9:30-10:30 AM

Journey in Local Train

10:30-11:34 AM

Unloading and Sorting at Destination Station

11:20-12:30 AM

Delivery to respective customers.

12:30- 1 PM

Collection of Empty Dabba

1:30 PM-2:30 PM

Sorting at Destinations station.

2:48-3:30 PM

Returning Dabba to Residence/Caterer.

3:30-4:40 PM

10:34-11:20 am

This time period is actually the journey time. The dabbawalas load the wooden

crates filled with tiffins onto the luggage or goods compartment in the train.

Generally, they choose to occupy the last compartment of the train.

11:20 – 12:30 pm

At this stage, the unloading takes place at the destination station

Re-arrangement of tiffins takes place as per the destination area and

destination building

In particular areas with high density of customers, a special crate is

dedicated to the area. This crate carries 150 tiffins and is driven by 3-4

dabbawalas!

1:15 – 2:00 pm

Here on begins the collection process where the dabbawalas have to pick up the tiffin's from the offices where they had delivered almost an hour ago.

RETURN JOURNEY:

2:00 – 2:30 pm

The group members meet for the segregation as per the destination suburb.

2:48 – 3:30 pm

• The return journey by train where the group finally meets up after the day’s routine of dispatching and collecting from various destination offices.

• Usually, since it is more of a pleasant journey compared to the earlier part of the day, the dabbawalas lighten up the moment with merry making, joking around and singing.

3:30 – 4:00 pm

This is the stage where the final sorting and dispatch takes place. The group meets up at

origin station and they finally sort out the tiffin's as per the origin area

LOGISTICS

• Logistics is happening 24 hours a day,7 days a

week and 52 weeks a year.

• Logistical competency is achieved by

coordinating the following:

Network Design

Information

Transportation

Inventory

Warehousing

PORTER’S FIVE FORCE MODEL

COMPETITION

THREAT OF NEW

ENTRANTS

BARGAINING POWER OF SUPPLIERS

THREAT OF SUBSTITUTES

BARGAINING POWER OF

BUYERS

• Competition: Its difficult to replicate their supply chain

network

• New entrants: Fast food joints as well as office canteens.

However, since neither of these serve home food, the

dabbawallas' core offering remains unchallenged.

• Bargaining power of buyers: Delivery rates are so nominal

(about Rs 300 per month) that one simply wouldn't bargain

any further.

• Bargaining power of sellers: minimum infrastructure and

practically no technology is used, hence they are not

dependent on suppliers.

• Threat of a new substitute product or service: No

substitutes to home cooked food in Indian scenario, hence

threat to the dabbawalla service is not an issue at least in the

foreseeable future.

ECONOMIC ANALYSIS

• Everyone gets paid about two to four thousand rupees per

month.

• More than 1,75,000 or 2,00,000 lunches get moved every

day by an estimated 4,500 to 5,000 dabbawala.

• Only one mistake in every 6,000,000 deliveries.

• The New York Times reported in 2007 that the 125 year

old dabbawala industry continues to grow at a rate of 5-

10% per year.

SWOT ANALYSIS

Strengths:

• Simplicity in organization with Innovative service

• Coordination, team spirit, & time management

• Low operation cost

• Customer satisfaction

Weaknesses:

• High dependability on local trains

• Funds for the association

• Limited Access to Education

Opportunities

• Wide range publicity

• Operational cost is low

• Catering

Threats

• Indirect competition is being faced from caterers like maharaja community

• Indirect threats from fast foods and hotels

• Change in timings

• Company transport

HR PRACTICES

• Flat organization

• No hire and fire rule

• Community based Recruitment

• Sharing common beliefs, values, ethics

• Following of strict dress code

• Loyalty & trust is their monopoly

• Training provided to the new joiners

• Owner + Employee is the designation of each

• Quarterly Meetings to discuss issues

MANAGEMENT LEARNINGS FROM

DABBAWALA

• Keep operational costs as low as possible.

• Keep capital investment bare minimum.

• Just serve your customer – nothing else.

• Customer is not the Raja but Maharaja.

• Complexity opposes compliance.

• Never deviate from your core competency.

• Do not be over dependent on technology.

• Flat organization – fast decision making

• Co operation inside – competition outside.

• Keep extras for fault tolerance.

• Commitment matters, qualification doesn’t.

• Know the implication of failure.

• Build your services around existing infrastructure.

• Abandon bad customers.

• Strike means suicide – labor means life.

• Penalize employees for non compliance.

• Do not transfer your employees very often.

• Keep your employees emotionally united.

• High salary alone cannot retain employees.

• Be humble and do not boast your success.

COMPETITIVE STRATEGY

• Home made food is best for health and because health is wealth.

• Home made food is cheaper

• Safety - The Local train of Mumbai

• Dabbawalas give reliable services and their performance and accuracy match six sigma standards

• DabbaWalas never go on strike

• By taking their services you are proving direct employment to 5000+

• They regularly organize bhajan and kirtans and spread the essence of Marathi culture , good will and one ness of India

ACHIEVEMENTS

• Documentaries made by :

BBC ,UTV, MTV, ZEE TV, AAJ TAK, TV TODAY, SAHARA SAMAY, STAR TV, CNBC TV 18, CNN, SONY TV, TV TOKYO, NDTV.

• CASE STUDY made by :

ICFAI Press Hyderabad & Bangalore

Richard Ivey School of Business – Canada

Also, Included in a subject in Graduate School of Journalism University of California, Berkeley

World record in Best Time Management with Six Sigma rating.

Name in “GUINESS BOOK of World Records”.

CONCLUSION

• In this highly technologically advanced time

‘dabbawalas’ are working absolutely without

technology. They have an excellent supply chain, despite

the fact that they don’t even know what it means.

• Most of the people working with them are semi-literate

but still they read the tiffin code correctly and deliver it.

• Their attitude of competitive collaboration is equally

unusual, particularly in India. Their excellent sense of

deep commitment, sense of work ethics and unparalleled

time management system are best in place.

REFERENCES

• Nishesh Patel (EMBA 2006) Naveen Vedula (EMBA 2006) ,DABBAWALAS OF MUMBAI

• Amberish K Diwanji, "Dabbawallahs: Mumbai's best managed business", Rediff.com, November 4, 2003

• Chakravarty, Subrata N. "Fast food." Forbes. 10 Aug. 1998. Forbes Magazine. 21 Sept. 2013 http://www.forbes.com/global/1998/0810/0109078a.html.

• http://en.wikipedia.org/wiki/Dabbawala

• Mumbai's amazing Dabbawalas.Rediff.com (November 11, 2005).

• Mydabbawala.com: Accolades To Dabbawala

THANK YOU!!