Mumbai Dabbawala - Document Transcript

1. IILM Institute for Higher Education School of Business PROJECT Business Research Mumbai Dabbawalas Abhishek Tewari IILM Gurgaon (Pgp 2007-2009) Prepared By Abhishek Tewari (April 2008)

2. INTRODUCTION • A dabbawala (one who carries the box), sometimes spelled dabbawalla, tiffinwalla, tiffinwalla or dabbawallah, is a person in the Indian 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-wallas. For the efficiency of their supply chain it has been claimed that this virtually achieves a six sigma performance rating (i.e. 99.99% of delivery are made without error, he is at CMMi 6). • Though the work sounds simple, it is actually a highly specialized trade that is over a century old and which has become integral to Mumbai's culture. • The dabbawala originated when India was under British rule: many Indian people who worked in British companies disliked the British food served by the companies, so a service was set up to bring lunch to them in their work place straight from their homes. Nowadays Indian businesses are the main customers for the dabbawalas, and the service often includes cooking as a delivery. Prepared By Abhishek Tewari (April 2008)

3. What is NMTBSA N -Nutan M - Mumbai T -Tiffin B -Box S -Suppliers A -Association The origin of the dabbawalas’ lunch delivery services dates back to the year1890. Mahadeo Havaji Bacche, amigrant from Pune district (North Maharashtra) started this lunch delivery service. At that time, people came from different states and form different communities migrated to Mumbai for work. At working place there were no canteens or fast food centers and they did not bring their lunch from home. Besides, different communities had different food habits, tastes and preferences which could only be satisfied by a home made meal. Recognizing the need, Mahadeo started this lunch delivery service. In his business, Mahadeo recruited young men from the villages neighboring Mumbai (generally Pune district and adjoining areas), who had no formal education or technical efficiency to get work in the city. There were 100 dabbawalas at the Commencement of the service and charged the client Rs. 2 per month. Gradually, the number of dabbawalas increased. In 1950, dabbawalas were delivering 1, 00,000 lunches per day. After the death of Mahadeo they became organized in 1954 and formed Nutan Mumbai Tiffin Box Suppliers’ Charity Trust. The trust had branch offices in different parts of the Mumbai such asChembur, Dadar, Ghatkopar etc. In 2005, 5000 dabbawalas are delivering around 2, 00,000 lunches per day. Prepared By Abhishek Tewari (April 2008)

4. Objectives The main objectives are: (i) To examine how the dabbawalas operate; (ii) To study how Operations Management Dabbawalas of Mumbai perform an amazing role in procurement and distribution of tiffins to their clients from which one can learn many critical issues of supply chain, distribution and logistic management. This paper mainly dwells on the examination of their operations and achievement of almost zero-fault performance including their problems and prospects in this changing environment of their business. They work as a team to

achieve a common goal with a cent percent accuracy and (iii) To explore the problems and prospects of the dabbawalas’ services in the light of Changing environment. Prepared By Abhishek Tewari (April 2008)

5. Levels of Management: The Trust is a co-operative body having three levels of management, viz. (i) The Governing Council, its President, Secretary - top level: (ii) Mukadams (team leaders or supervisions)–middle level (iii) Dubbawalas – lower level. The Governing Council (also called as Panch Committee) holds meetings on the 15th day of every month. Mukadams and dabbawalas are entitled to attend the meetings. At These meetings, dabbawalas discussed their problems and business policies. The trust Collected Rs. 15 p.m. from each member to maintain a welfare fund. The trust provides various services to its members, including loan facilities for emergencies, educations expenses for children, health care etc. from this welfare fund. The dabbawalas are organized in 15 to 20 members groups. Each group is supervised by 4 mukadams. Prepared By Abhishek Tewari (April 2008)

6. Mukadams supervise to sorting dabbas (tiffin box), to keep records of payment, to settle disputes, to search new customers and train new dabbawalas. Each group is financially independent but work together in the delivery process. Each group serves its own customers without hampering the interests of other. Now the Dabbawalas are charging customers Rs. 250 to Rs.300 p.m. for their services. Total monthly collection is shared equally among the members of the group. Each dabbawala receives Rs. 5000 to Rs. 6000 p.m. after meeting all expenses like railway monthly ticket, rent for handcarts, crates etc. Newcomers who want to become dabbawala are initially hired on a salary, after evaluating their performance they are offered membership (shareholders) of the trust and assigned to one of the groups. Each dabbawala is guaranteed to receive a monthly income and employment for life. As there is no retirement age, he may work as long as he is physically fit. To become profit sharing member of the trust, new dabbawala needs to pay a certain amount to the trust. Prepared By Abhishek Tewari (April 2008)

7. PORTERS FIVE FORCE THEORY • 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: Prepared By Abhishek Tewari (April 2008)

8. 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. SWOT Analysis Strengths: Weaknesses: • Simplicity in • High dependability on organization with local trains Innovative service • Coordination, team • Funds for the spirit, & time association management • Limited Access to • Low operation cost Education • Customer satisfaction • Low Attrition Rate Prepared By Abhishek Tewari (April 2008)

9. Opportunities Threats • Indirect competition is • Wide range publicity being faced from • Operational cost is low caterers like maharaja • Catering community • Indirect threats from fast foods and hotels • Change in timings • Company transport • Ticket restaurant HOW THE DABBA IS DELIVERED The entire system depends on TEAMWORK and meticulous timing. Tiffins are Collected from homes & taken to nearest Railway Station. Then they are sorted out for area-wise distribution, so that single tiffin could change hands 3 to 4. Times in the course of its daily journey. Flow Logic of Distribution Prepared By Abhishek Tewari (April 2008)

10. This service is available in every working day and whenever the local trains run in Mumbai & Suburban because it is their primary mode of transportation. The mode and the way of transportation are:- • Pick up Dabba from Residence and bring it to Andheri ( between 9.30 am -10.30 am) • Journey by Local train. ( between 10.34 am-11.20) • Unloading and sorting at destination station.( 11.20am-12.30pm) • Lunch time.(12.30pm-1pm) • Collection of empty Dabba and sorting at destination station.( 1.15pm-2.30pm) • Return Journey.(2.48pm-3.30pm) • Sorting and delivery of empty Dabba at residential station. 9.30am-10.30am 10.34am-11.20am 11.20am-12.30pm Andheri Andheri Stn Church Gate Prepared By Abhishek Tewari (April 2008)

11. 2.48pm-3.30pm 1.15pm-2.30pm 12.30pm-1.00pm Return Journey All Destination Station Lunch Time The Color Coding of Dabbas 3.30pm-4pm At all original station The dabbawalas have developed their unique coding system. The codes help each dabbawala to identify and fulfill his responsibility. These codesare understood by the dabbawalas and no one else. The code is painted on the lid of the dabba, which indicates the originating address & station and the destination station & address. Their coding system is very interesting. They use colours and code markings to ensure Prepared By Abhishek Tewari (April 2008)

12. faultless delivery. They use both alphabets and numbers to identify dabbawala, station, building and floor. Six Sigma Certification by Forbes Group • 4 students from Delhi visit Dabbawala office to do project under Mr. C.K. Prahlad. • For 4 days they travelled with Dabbawala collecting various data. • After few days there was news in Times of India that Mr. C.K Prahlad met President Mr. K. R .Nararyan and Dabbawals got six sigma (error rate is 1 in 16 million Prepared By Abhishek Tewari (April 2008)

13. transactions and six sigma performances is 99.99%) Six Sigma quality rating helps the organization streamline their delivery systems, eliminate errors and achieve a cent percent accuracy. Around 5000 dabbawalas deliver about 200,000 tiffin boxes to factories and offices across Mumbai with high labour intensive and with almost zero technology inputs. But they receive international recognition after 115 years of glorious service. Every year their business grows by 25000 to 30000 tiffin boxes. They lose a few customers too each year but are more than compensated with the additions. Actually they grow annually by about 10%. Till the time people will feel hungry their business will keep growing. They have started advertising on dabbas by putting stickers on them. This brings in extra income. Mumbai dabbawalas deliver mainly during day time. They are not night bird. But India shifts to a 24 hours X 7 days work culture, the tiffin boxes’

network would also work under the moon and stars. Management Learning from Dabbawala 1. Keep Operational costs as low as possible • Dabbawala use cycle, hand cart, local train- all low cost. • No Big Office to maintain. • No IT budget and no miscellaneous expenses. • No Ad budget- word of mouth publicity. • Average monthly service cost Rs.250. 2. Keep Capital investment bare minimum. Prepared By Abhishek Tewari (April 2008)

14. • Only investment is the hard work, honesty, promptness and time management. • Low cost offices. • Very cheap hand cart. • Easy to maintain cycles- Fuel is free air ( God given Fuel) • Use public space for sorting. • No IT or HR department. 3. Just serve your customer-Nothing Else • Dabbawalas always deliver food on time- even during heavy rains. • On time without wearing a watch. • They do not try impress or bother customer with unsolicited offer. • Bothering customer with unsolicited offer forces them to discontinue even existing services. 4. Customer is not the RAJA – But Maharaja • England King Prince Charles met Dabbawala on 4th Nov 2003. • He was told to come to church gate station to meet Dabbawalas. • So that the delivery of Dabbas to clients is not affected. • He spent around 20 minutes with Dabbawala. • Virgin Group chairman, Richard Branson, traveled with Dabbawala and delivered Dabba to his own employee. 5. Never Deviate From your Core Competency • Dabbawala are only in the business of delivering home made food to offices. • Effort to sell FMCG and other products through Dabbawala system failed. • Be- “Master of one trade rather than jack of all”. • If required develop product & services around core competency. 6. Do not be over Dependent on Technology • For 116 years, Dabbawalas did not touch technology- yet got six sigma and ISO. • Today mobile phones are mostly used to communicate- only incoming. • Website & SMS used to get more customer and give information. Prepared By Abhishek Tewari (April 2008)

15. • But logistics is still manual. 7. Co-operation inside- Competition Outside. • There are 2-3 Dabbawala group in each segment. • Dabbawala collection is group wise but transport is shared with other group. Competition is only up to collection. • Profit is shared equally within each group after deducting expenses. • World‘s most democratic organization. 8. Commitment Matters- Qualification Doesn’t • About 85% of Dabbawalas are illiterate. • 15% are class 8 failed. • Still they are able to offer world class services as they are committed to offer food to customer on time. • If commitment is there, then qualification can be built. 9. Know the implication of Failure • If food is not delivered on time then customer will be angry and work will suffer. • Problem with Boss and wife. • If vegetarian gets non vegetarian Dabba, then Big problem. • Knowing the implication of failure makes you more responsible and serious towards your work. 10. Bulid your services around existing infrastructure. • Dabbaswala use reliable, fast, efficient and cheap existing local train for transportation. • Many food companies in Mumbai use their own infrastructure which is tough to maintain and costly as well. • 3 sigma, out of six sigma that Dabbaswala got, should be given to local trains system. • Building new infrastructure increase cost to server. 11. Abandon Bad customers. Prepared By Abhishek Tewari (April 2008)

16. • When Dabbawala knocks the door, the Dabba should be ready. • If not- then for 2-3 days the time is given to adjust. • After that, the services are stopped as it

affects the services to other customer. • Bad customers affect the operation and profitability from existing customers. 12. Penalize Employees for non compliance • Dabbawalas are penalized for not wearing Gandhi Topi, not pre- informing leave and misbehaving with customers. • After giving a few warnings, if Dabbawala does not change then he is expelled from the system. • Discipline is one of the main reasons of Dabbawala success. • If Not penalized for non compliance then what are the rules for? 13. Do Not Transfer Your Employees Very often. • 5000 Dabbawalas remember the address of 2 lack customers by heart. • Most have been serving for about 30 years+ on average. • Fully know the needs of their customers. • So customers trust them. Achievements Documentaries made by : Prepared By Abhishek Tewari (April 2008)

17. • 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 Radio: • German Radio Network, Radio Mirchi, Radio Mid-day, FM – Gold, BBC Radio, Radio City World record in Best Time Management with Six Sigma rating. Name in “GUINESS BOOK of World Records”. Registered with Ripley's “ believe it or not”. Participated in “Deal Ya No Deal Contest” by Sony Entertainment Television Invited for marriage of Hon. Prince Charles of England on 9th April, 2005. Problems & Prospects The trust faces the cut-throat competition from the growth of fast food centers like Pizza Hut, Mac Donald’s etc. While there are thousands of die-hard customers, rapid urbanization, increasing personal transportation and availability of different kinds of fast food have drawn a good chunk of the younger generation away from the home made food. But there is an increasing number of people who are health conscious and feel that home cooked food suits their stomach and health. Even some customers now send water along with their tiffins. Knowing this very issue the trust do not bother about the competition. Today, the dabbawala delivers not only homemade food but also Prepared By Abhishek Tewari (April 2008)

18. picks up food from caterers and delivers them to offices. The food from caterers are still small segments of the total operation. Most people want to eat homemade food in the offices without the bother of having to carry a cumbersome tiffin box. Conclusion The concept of ‘dabbawala’ comes into picture in one of India’s big and busiest cities– where people can enjoy the fresh homemade lunch every day. What a wonderful service they provide. It is not just a service but a vocation. Their main aim is customer satisfaction. The trust shows how these illiterate or semiliterate dabbawalas have mastered the art of logistics management, supply chain Prepared By Abhishek Tewari (April 2008)

19. management, customer service,Just-in-time management, team work and problem solving. People cannot believe that uneducated people can provide such an efficient service. Even people of foreign countries (like U. K., Italy etc.) are amazed that uneducated dabbawalas can carry out such type of business so accurately. Actually the uneducated have an ability to memorize and retain more as opposed to the educated who are used to writing down everything. So they

claim that “our head is our computer and Gandhi cap in the computer covers to protect it from the sun or rain.” The white–capped, white–shirted dabbawalas shot the limelight when they were awarded the six sigma rating, but it was Prince Charles’ meeting with them in Mumbai in November 2003 that really helped them. He was the first celebrity who visited them. R. Megde said “Many people talk about us, but Prince Charles was the first famous person who met the dabbaswala and encouraged them Hard work and sincerity of dabbawalas are the two main factors to reach such levels of efficiency with such an untrained work force. They got six sigma rating of highest operational efficiency without using any paper work or computer. Prepared By Abhishek Tewari (April 2008)