South Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858 (Volume 2 Issue 1 )

SUPPLY CHAIN MANAGMENT

SUPPLY CHAIN ANALYSISOF DABBAWALA

Himani AnandBatch of 2016IIM Lucknow

Geetanjali GulatiBatch of 2016IIM Lucknow

Table of contents

1. Executive Summary.......3.2. Introduction.......4

3. Supply Chain Overview.......6

4. Network Design....7

5. Transportation...........11

6. Quality.....13

7. Conclusion.15

8. References.....16

Tables and images

Image 1: Richard Branson with Dabbawalas....4Image 2: Organizational Structure...5Image 3: Network Designs....8Image 4: Transportation..11Image 5: Flow of Dabbawalas supply chain....12Image 6: Sample coding....13

Executive Summary

In our study of Supply Chain Management, weve had the opportunity to study the supply chains of some of the biggest companies in the world like Wal-Mart. However, when we studied about the Dabbawalas, at first glance they seemed to defy all that we had studied so far. 5000 illiterate workers, making 2,00,000 deliveries a day with an error rate of one in a million without using any kind of technology. However, on deeper understanding, we acknowledged the simplicity of an efficient supply chain. All it takes to build a successful supply chain is the right process, which makes the ordinary workers achieve extraordinary results. With this motivation to study this miracle, we decided to apply the various concepts we had studied so far to the Dabbawalas of Mumbai and try to understand their practical application.This report is structured so as to give a brief introduction about the company and its supply chain, followed by understanding of the supply chain from the perspective of network designs, transportation and quality.Under network design, we have studied how the supply chain network, spanning thousands of kilometers, is designed in this case. The entire logistics system with its structure, supplier selection, geography, process capability etc. is detailed. Under transportation, we have studied the various modes of transportation used by the Dabbawalas. This is followed by Quality where we have studied the coding system and how it contributes to the error free delivery system.We have then concluded this report, summarizing all the key success factors, which contribute in making, this simple supply chain an excellent example which is being studied and replicated in international organizations like Microsoft and HUL.

Introduction

When we think of efficient supply chains, we think of Walmart, and when we think of six sigma we think of Motorola. But working in the labyrinths of the densely populated city of Mumbai is the Dabbawallahs of Mumbai. With a track record of failing only once in a million cases, the Dabbawallahs of Mumbai ensure that hot food in lunch boxes reaches 2,00,000 office-goers at 12:30 pm. Founded in the year 1890, Mumbais Dabbahwallas have become the lifeline of the city that never sleeps.

It all started when a Parsi banker wanted to have home cooked food regularly in office and gave this responsibility to the first ever Dabbawala. Other people also liked the idea and the demand for Dabba delivery soared. It was all informal and individual effort in the beginning, but visionary Mahadeo Havaji Bachche saw the opportunity and started the lunch delivery service in its present team-delivery format with 100 Dabbawalas.As the city grew, the demand for dabba delivery grew too. Our forefathers had the vision to create the Dabba coding system thats going on strong even today.The Coding system evolved through various stages with time. In the beginning it was simple colour coding. Now Mumbai is a widely spread metro with 3 local train routes. Our coding has also evolved into alpha numeric characters.1What is unique in their delivery system is absolute non-reliance on fuel and technology. 5000 dabbawalahs collect hot food made by Mumbai housewives in the morning around 9:30 and deliver them to their destinations by 12:30. In the process the dabba changes hands three or four times, reaching their destinations without an error. In the evening, a reverse process takes place where empty dabbas are returned to the homes.100% customer satisfaction is their motto, and the 5000 dabbawalahs- who are majorly illiterate, achieve this because of their customer centric culture and the trust that is imposed in them. The modes of transport that they use vary from a cycles to handcarts to Mumbai local trains.Internationally acclaimed, these dabbawalas have met eminent personalities like Prince Charles on his visit to India and the Virgin Group head Richard Branson. Richard Branson even spent a whole day understanding the system and delivered lunch boxes to his employees with the dabbawalas.

Image 1The organization structure is relatively flat and comprises of just three layers:

M.T.B.S.AOrganisation Structure

PANCH COMMITTEEPresidentVice PresidentDirectorGeneral SecretaryTreasurerDecision MakersHandle administrative matters, hold meetings

Supervise, sort Dabbas, resolve disputes, maintain payment records of the team, get new clients.MUKADDAMS800

DABBAWALLAS5000CollectionDelivery of Dabbas

Image 2

The fact that each member in this corporation is an equal shareholder is just as unusual as their simple yet sophisticated delivery networks. Each dabbawalla is required to contribute a minimum capital in kind in the form of 2 bicycles, a wooden crate for tiffins, white cotton kurta pyjama, and a white Gandhi cap. Each month, there is a division of earnings in each unit.

Supply Chain Overview

What comes to your mind when you are asked about the most successfully performing supply chain in the world?For many, large corporate giants like HUL, Wal-Mart and Coca-Cola instantly pop up in their heads. But few, if any, would think that a meal delivery system in Mumbai, India, would be among the worlds most successful performance chains.

And yet, a system based on barefoot men, public trains and simple, reusable containers in a city of some 12.5 million people is widely acknowledged as one of the Top performance chains in the world.

Number of Dabbawalas5000

Number of Dabbas2,50,000 dabbas delivered every day

Time takenMaximum 3 hours for drop

Total distance covered60-70 km per trip

The Dabbawala community works to deliver lunch boxes for about 2 lakh people at their work places in time and then carry the empty lunch boxes back to the homes of the customers. Without even knowing what Six Sigma is all about in the words of Dr. Pawan Agarwal, the president of The Dabbawala association, they are known to commit hardly one mistake in sixteen million transactions and have been consistently good at it for all the time of their operations. This credibility earned them a six sigma designation by the Forbes magazine and ISO 9001 accreditation.

They take the lunch boxes from the different homes to the nearest railway station. From there, each of the boxes, coded according to the station of origin, the collection and delivery point, and the destination, are sorted out and taken to the next intermediary stations, where they are sorted out again for area-wise distribution and delivery. So a single lunch pack could change hands three to four times in the course of its daily journey, Yet they get delivered without a mistake since they are so well coded," says Manish Tripathy, the Chief Information Officer

The dabbawalas have started using Web technology and SMS for orders, but for the most part this is a fairly low-tech operation. It relies on trains and barefoot men. No computer chips. No social networks. Just guys busting their humps and a reliable train service. A key takeaway for most organizations that it portrays- Dont expect technology to solve your issues usually the issue has more to do with process, execution and expectations than it does with bits and bytes.

Network design

When designing a supply chain network, the main objective is to maximize the firms profits while meeting customer satisfaction expectations. Theoretically, network design involves two major phases first, defining a supply chain strategy/design and second, defining specifics like regional configurations. We will study these decisions in the context of the Dabbawallas of Mumbai.

Phase IThe broad supply chain design of the Dabbawallas consists of collection of dabbas from housewives and delivery at the destination with a reverse process of empty dabbas back to the housewives.The goal is -accuracy with 100% customer satisfaction.

Phase IISpecific decisions relating to structure are taken in this phase. Dabbawallas salient features are listed below:

1. Network design structures

The network structure of dabbawallas is a combination of hub-hub transfer, hub and spoke distribution and milkman route. Each Dabbawala is in-charge of collecting 30 lunch boxes. A point to be noted is that the Dabbawala waits for just 2 minutes for the dabba. If the lunch box is not prepared the Dabbawala leaves without collecting the dabba. A delay of more than 2 minutes means slack in the system which could translate to delay in the entire process. Because of these stringent timings, even the housewives make sure that the box is prepared within the stipulated time.After collecting approximately 30 boxes, they are brought to the nearest railway station for sorting and further transportation.A team comprises of 8 dabbawalas, and more than one team operates out of a railway station which serves as a collection point. 8 teams make a group, and 120 groups work in the system. Entire operations of customer satisfaction, quality, complaints, human resources management, discipline, scheduling, collection, accounts, revenue and compensation are taken care by the groups. Operational execution is undertaken by the teams.Continuing the life cycle of the dabba, at the originating station, a team of dabbawalas sorts the boxes according to their destinations. The sorting process is done through a coding system which is explained below. Based on the codes, the dabbas are sorted fro a origin to hub transfer by the local Bombay trains. At the destination station, dabbas are received, resorted based on building, location and floor and then delivered to the destinations by the assigned dabbawallas.Once the delivery process is completed by 1pm, the dabbawallas relax in the nearby parks to wait for the empty boxes. By 3:30 pm they return to the offices and collect the empty dabbas for the return journey. A milkman route of exact reverse nature is followed where the dabbas are assembled at the destination stations, resent to their respective origin location, and transferred to the respectively hub or stations via hand carts. Image 3The carts are unloaded at the station and returned to the individual households by the same member who collected it from them in the morning.The sorting and loading processes are integral to this system of six sigma. They are done in public places, which are often congested. The designated carts are used for the origin-hub transfer. The carts are then loaded in pre-determined compartments in the trains.

2. Process Capability

The total time required from collection to delivery is about 3 hours. End to end travel time-1:30 hours. Travel time to the nearest railway station at the origin 30minutes, sorting and material handling etc.- 30 minutes and final dispatch- 30 minutes. All this adds up to 3 hours. However, time available for end-to-end delivery is atleast 4 hours. Thus, the process is inherently capable of meeting customer expectations and specifications. Further, delivery of lunch boxes is consolidated at the floor level at the consumer location. In a place like Bombay this saves significant time and energy, and possible complications. The customer also participates in the last strep of the delivery process. Also, it makes no difference to the customer as long as the delivery is made before 1pm.2

3. Geography

Pickup from the households and last mile delivery at the required destination involves accurate knowledge of shortest routes possible. Unaided by technology of Google Maps or any other similar maps application; the Dabbawalas have mastered the topography of the city of Mumbai. At the originating station, the area is dispersed over a large area. At the destination it is concentrated on a smaller geographical area. The traffic pattern is characterized by low volume spread over large area to high volume spread over small area.3More importantly, it is the geography of the city of Mumbai, which makes their system more efficient. Mumbai being a longish city, has residential areas in the north and offices in the south. Similar supply chain wont work in the case of a city like Delhi-which is circular in its geography.

4. Transport

The use of railway trains makes this distribution link efficient as the high frequency of trains makes it possible to maintain the strict time schedule. Transport decisions are covered in the next section in detail.

5. Redundancy

Each Dabbawala is assigned a separate route in the network. Also, all other members know the route assigned to each and every member so that in case one member is not able to cover a route, another member can fill in.

6. Supplier Selection

The dabbawalas have started collaborating with small companies and canteens that provide freshly prepared meals. At the same time, they have rebuffed any plans to integrate backwardfor example, setting up their own kitchens for a simple reason that they wont allow themselves to be distracted from their core mission of delivering dabbas on time. Suppliers of homemade food are expected to abide by the process standardization and motive of on time delivery. Those who are repeatedly late in having their dabbas ready for pickup and dont respond to warnings are dropped.

7. Standardization of materials

The dabbas, for instance, are all roughly the same size and cylindrical shape. To encourage customers to conform, containers incur an additional fee when, say, they are so large that they require special handling. Unusual containers that interfere with the delivery operation are simply not accepted. This uniformity allows the dabbas to be packed quickly onto crates, which are also a standard size so that they can be efficiently loaded onto trains.

Transportation

Dabbawalas use cycles or go by foot to every household. The waiting time to collect a lunch box is maximum 2 minutes. Every Dabbawala has to assemble at his/her reported collection point at sharp 9.30 am.From these collection points they assemble at the nearest railway station, which is the Aggregation point.

Image 4

The next mode of transport is the trains where the carriers containing lunch boxes are transported to the destination railway stations From every Destination station the dabbas are carried over carts, cycles and carriers to the destination zones which are given a specific numberFrom these zones, the lunch boxes are carried to the offices or workplaces which reach by lunchtimeFrom here the reverse process of delivering the empty lunch boxes back to homes startsAll through the above process, there is no slack at any point of time. Traffic Jams, pedestrians, delays in train and signals do not stop the functioning. The trademark white cap wore by these Dabbawalas are known to everyone including the police who dont interfere in their process.

Each dabbawala is assigned upto 30 customers in a specific geographical location. He visits a pre assigned and fixed route and carries the lunch boxes and brings his to the nearest railway station, usually on his head. The frequency of sub urban trains (one per minute) facilitates the origin- hub transferees arrive at destination railway station by 11:30 am. The subsequent deliveries are completed before 1 p.m. There are dedicated compartments provided by Mumbai local rail for handcartsand we see them making way for people wearing the white Gandhi cap, the Dabbawaalas trademark. There is cooperation from external entities extended for fulfillment of their promise of efficient deliveries.There is a use judicious mix of transportation economics. At the collection point, it is a milk man route structure. This, supported by a hub-hub transfer to handle large volumes reduces operational cost. At the destination, it is hub-to-spoke to ensure response time and handle volume flexibility. The rail infrastructure ensures flexibility and lower cost of operation. Flexible manpower deployment and codification system guarantee appropriate response time, smooth flow of information and material tracking in the system.

Image 5

Quality

A group has 10, 20, or 25 dabbawallas, depending on the density of customers in your area, and their in-charge is the group leader. The responsibility to keep the dabbawalas and the customers happy is on the group leader. Despite the fact that he doesnt get even a rupee extra for the extra10% that he works, he feels proud to be a group leader. For example, the group leader also takes care of the train passes of the dabbawalas, to check whether they have expired or not; he reminds the dabbawalas in case their passes are about to expire in the next 2-3 days and also buys the pass for the dabbawala if he fails to do so himself in order to ensure that timely delivery doesnt suffer. They will never tell you that the trains are late today, and even if Mumbai trains are late, the tiffins cant be late. In 120 years, it has never happened that a dabbawala has failed to deliver. Its impossible. Probably, it comes with a sense of ownership that they derive with a flat structure and equal profits scheme of affairs prevalent in the Dabbawala.

It is one of a kind organization with Six Sigma designation and 99.99% rate of performance with no use of modern technology and 0% fuel reliance. There are no errors of lunch boxes despite changing hands six times. The customer satisfaction is claimed at 100%.

In order to avoid any mistakes involving interchange of lunch boxes, that is, wrong customer getting the wrong tiffin, coding system is followed.

The Coding system can be explained as follows:

Image 6

BVI: Borivali, a suburb in Mumbai. This denotes the residential station9 RC 14: Code for Dabbawalas at destination. This user code is different for each customerRC: Raheja Chambers, name of a building or office14: Floor NumberE: Code for Dabbawala at Destination station. For example, E is a code for Nariman Point, ChurchgateJain: Name/Surname of the customer

The dabbawalas make no mistake while delivering food to their customers. This happens because of their colour coding system through which the dabbawalas assign various colors to tiffin boxes for inventory management and to complete their orders. Green mark on a tiffin box denotes vegetarian food, while non-vegetarians get a red-marked tiffin box. Apart from this, they also use a number coding system to reach a particular area. At the assortment station, tiffins are marked with different colors depending on their destination location, which further makes it easier to forward to the next intermediary station in lots. Colours can further signify which line to board next for the intermediary station. For example, a blue line on the code represents the central line of Bombay local.

The pricing structure is standard--no matter the distance where the delivery has to be made. This can be attributed to the fact that the dabbawalas walk, cycle and use Mumbai's suburban trains, keeping the delivery costs very tightly controlled. The delivery system revolves around strong teamwork and strict time management which is depicted below. The meals are then delivered 99.9999 per cent of the time to the right address.

Conclusion

The incredible distribution network of dabbawalas operates primarily on Hub and Spoke model with railway station, the point of aggregation and sorting of dabbas as hubs and its delivery to different destinations as spokes. The model thrives on the fact that it is practically impossible for daily office goers, who love home-cooked food, to carry their lunch boxes in the over-crowded local trains of Mumbai.What makes this supply chain model more attractive is the negligible investment involved. The mainstay of the entire organization is these workers-turned-shareholders. This uneducated workforce of men, with very little exposure to technology, has become the most potent brand ambassadors of the organization, with unflinching standards of teamwork and customer service. There is only one error in every 600,000 deliveriesa service standard which has earned them the Six Sigma Certification for Quality. The leading business schools like Stanford and the Indian Institutes of Management invite them for lectures and workshops on supply chain management. It can well be qualified as considerable acclaim and brand muscle for an organization that has only recently learned to a create website in order to keep pace with the changing world. But for the dabbawalas, nothing seems impossible. As their Chief Information Officer told me recently, If the commitment is there then qualification can be built.

References

1) http://mumbaidabbawala.in

2) http://www.iimahd.ernet.in/publications/data/2005-09-01ravichandran.pdf

3)http://www.isixsigma.com/community/blogs/4-reasons-dabbawala-supply-chain-succeeds-while-corporate-giants-struggle/

4)http://www.informationweek.in/informationweek/news-analysis/178212/dabbawalas-masters-supply-chain-management

5) https://hbr.org/2012/11/mumbais-models-of-service-excellence

16 Published By : Universal Multidisciplinary Research Institute Pvt Ltd