Dabbawalas of Mumbai-Large Service Supply Chain

Leading without Suits and Ties

• Talks on Best Practices at CII, IIMs, IITs, companies Regularly sought by print media and electronic media

• Common queries– How do they recruit?– Working of incentive system with “equal pay for all”?– Do they know their clients?– Robustness of distribution channel?– Dealing with growth?– Competitors?– World is changing! Not dabbawalas?

Facts

• 2003: 5000 recruits, 175, 000 clients

• 350,000 deliveries

• 75 kms of public transport

• Failure: once in two months, one in 15 million

• Rs 380 million per annum

Structure

• Three tier structure: – Executive committee – Mukadams – Dabbawalas

• Role of Groups (a profit centre with 8 mukadams)

• Culture similarity of the staff• Distinct local entity of dabbawalas

– Known for reliability and work ethic– Helped by commuters

Distribution Network

• Baton relay system• Hub and spoke arrangement• No historical, theoretical legacy in the design• No use of computer technology• Coding system

– Decentralized at the group level

• Workday schedule • 30-35 deliveries (manageable)• Sorting, loading and unloading at peak rush hours• 4 handlings of a dabba in a day- coding essential

Distribution Network

• K-BO-10-19/A/15

• Clients name is not even existing

• Easy coding scheme as the level of literacy is not very high

Operating Environment

• Competitors: Fast Food chains, restaurants and road-side vendors, Udipi chain etc.

• Competition is different: – NO MANUFACTURING, ONLY

DISTRIBUTION

Success Factors

• Low cost delivery– Rs. 150 -200

• Delivery reliability– Entrepreneurs, not employees– No strikes

– Flat structure– Referrals from friends and relatives– No dilution of service culture

Success Factors

• Decentralization

• Perceived equality– Effort different, same remuneration

• Suburban Railway Network– Foodline of the city

Future

• Key concerns– Shrinking customer base and loyalty

• Loss of textile mill workers in 80s amd 90s• Each group authorized to target new customers (school

children etc.)

– Lifestyle changes• Not a major damage for the business

– Workforce management• Next generations do not seem to be greatly interested• Not many incentives for good workers• Not many disincentives wither (no firing)

Future

• Sales and Marketing reps of companies?– Approach

• Only for sample products, flyers• Not for products with billing• Want to keep meal delivery simple and

manageable

• Replicate to other cities – Distribution network– Working population– Preponderance of long commuting times