THE WONDER OF DABBAWALAS UNFOLDED

Introduction

The Nutan Mumbai Tiffin Box Suppliers Association (NMTBSA) is a

streamlined 120 year old organisation with 5000 semi-literate members providing a quality

door to door service to a large and loyal customer base. It was started by Mahadeo Havaji

Bacche, a migrant from north Maharastra in the year 1890, the service was started with 100

dabbawalas, It was registered as charitable trust in the year 1956.

A dabbawala is a person in India, most commonly found in the city of

Mumbai, who is employed in a unique service industry whose primary business is collecting

the freshly cooked food in lunch boxes from the residences of the office workers, delivering it

to their respective workplaces and returning the empty boxes to the customer’s residence by

using various modes of transport.

Instead of going home for lunch or paying for a meal in a café, many office workers have a

cooked meal sent by a caterer who delivers it to them as well, essentially cooking and

delivering the meal in lunch boxes and then having the lunch boxes collected and re-sent the

next day. This is usually done for a monthly fee. The meal is cooked in the morning and sent

in lunch boxes carried by dabbawalas, who have a complex association and hierarchy across

the city.

A collecting dabbawala, usually on bicycle, collects tiffin from homes or, more often, from

the dabba makers (who actually cook the food). The dabbas have some sort of distinguishing

mark on them, such as a color or symbol (most dabbawalas are illiterate). 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.

Team work

The entire system depends on teamwork and meticulous timing. Tiffins are collected from

homes between 7.00 am and 9.00 am, and taken to the nearest railway station. At various

intermediary stations, they are hauled onto platforms and sorted out for area-wise

distribution, so that a single tiffin could change hands three to four times in the course of its

daily journey.

At Mumbai's downtown stations, the last link in the chain, a final relay of dabbawalas fan out

to the tiffin's destined bellies. Lunch hour over, the whole process moves into reverse and the

tiffins return to suburban homes by 6.00 pm.

In a way, MTBSA's system is like the Internet. The Internet relies on a concept called packet

switching. In packet switched networks, voice or data files are sliced into tiny sachets, each

with its own coded address which directs its routing.

These packets are then ferried in bursts, independent of other packets and possibly taking

different routes, across the country or the world, and re-assembled at their destination. Packet

switching maximises network density, but there is a downside: your packets intermingle with

other packets and if the network is overburdened, packets can collide with others, even get

misdirected or lost in cyberspace, and almost certainly not arrive on time.

Coding System

Most of the dabbawalas have migrated from villages to Mumbai in search of jobs. Due to

economic hardship or lack of interest a majority of them have been educated up to primary

school level. Hence, the dabbawala delivery system has adapted the coding system

accordingly. Instead of technological solutions, the coding system is based on the exchanges

of dabbas between dabbawalas. The system uses unique codes for the railway stations,

origin/destination points and identity of the dabbawalas handling each dabba. For this, signs,

different colours, numbers and a few letters are used and same is clearly marked on each

dabba.

The codification system ensures complete traceability of lunch boxes in the system. It enables

material flow and tracking of individual boxes by detailed information which integrates the

knowledge and information of individual dabbawalas on route, origin, handling agent,

destination address, etc. The “address” of the customer is painted on the top by the

dabbawalas. The home address is not marked since the dabbawala knows by heart to which

places in his collecting area he has to pick up his dabbas. If a new customer appears in his

own collecting area, he will do the complete journey to check the address of delivery in order

to fix with the other dabbawalas in which manner it will be then delivered. He will have to

find , who on the way, will have a free place in his freight to take one more tiffin box up to

which place, and so on up to the very place of delivery. Once the chain has been established,

with all the necessary stops for exchange decided, it is possible to mark the address.

Economic analysis

Each customer of the dabbawala system is charged between Rs. 400 to Rs. 700 per tiffin per

month for the service depending on customer requirements, transport distances and

economic condition of the customer. Customised offerings (larger lunch box, special diet

requirements, etc.) are charged separately. The customer only needs to invest upfront, a

token sum to purchase the tiffin box to store the meals. Further negotiation of the price and

collection timings will be done between the customer and team leader. Generally, lower

income customers are charged lesser than others. It is up to the team leader to decide on the

final rates based on his judgement and consideration of the economic status of the customer.

The main cost items are wages, rail passes and rail freight charges. The members use the rail

network which charges Rs. 100 per crate and Rs. 180 per member per month. Each member

is paid a reasonable compensation of between Rs. 5,000 to Rs. 7,000 per month net wages

after meeting all expenses like railway monthly passes and capital costs incurred for purchase

of carts, crates and bicycles.

The exact wages for each dabbawala varies according to the total

customers serviced, services provided and total origin-destination distance.

There are no large investments in the services of the dabbawala delivery system, since it is

primarily a labour intensive service. When a member is recruited he is obliged to buy his own

uniform and purchase a bicycle for himself

New recruits 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 by the

member who introduced him to the group. Each dabbawala is guaranteed a monthly income

and employment for life. As there is no retirement age, he may work as long as he is

physically fit. Each team is financially independent and serves its own customers without

hampering the interests of the others, but work together in the delivery process.

Each member pays Rs. 15 per month as contribution to the welfare fund which acts as an

insurance cover. The association provides various services to its members from this welfare

fund, including loan facilities for emergencies, education expenses for members’ children,

health care, etc. The balance of the savings goes to a charitable trust.

Other sources of revenue come from marketing. Realising the large customer base to which

the dabbawalas are in direct contact with, a number of business enterprises use the

dabbawalas to market their products and services by sending flyers to the end customers

through the dabbawalas. Donations from philanthropic institutions and fees received from

public speaking and presentations also constitute other revenue sources.

Elegant logistics

In the dabbawalas' elegant logistics system, using 25 kms of public transport, 10 km of

footwork and involving multiple transfer points, mistakes rarely happen. According to a

Forbes 1998 article, one mistake for every eight million deliveries is the norm. How do they

achieve virtual six-sigma quality with zero documentation? For one, the system limits the

routing and sorting to a few central points. Secondly, a simple color code determines not only

packet routing but packet prioritising as lunches transfer from train to bicycle to foot.

MTBSA is a remarkably flat organisation with just three tiers: the governing council

(president, vice president, general secretary, treasurer and nine directors), the mukadams and

the dabbawalas. Its first office was at Grant Road. Today it has offices near most railway

stations. Here nobody is an employer and none are employees. Each dabbawala considers

himself a shareholder and entrepreneur.

Each group is financially independent but coordinates with others for deliveries: the service

could not exist otherwise. The process is competitive at the customers' end and united at the

delivery end.

Each group is also responsible for day-to-day functioning. And, more important, there is no

organisational structure, managerial layers or explicit control mechanisms. The rationale

behind the business model is to push internal competitiveness, which means that the four Vile

Parle groups vie with each other to acquire new customers.

Building a clientele

The range of customers includes students (both college and school), entrepreneurs of small

businesses, managers, especially bank staff, and mill workers.

They generally tend to be middle-class citizens who, for reasons of economy, hygiene, caste

and dietary restrictions or simply because they prefer whole-some food from their kitchen,

rely on the dabbawala to deliver a home cooked mid-day meal.

New customers are generally acquired through referrals. Some are solicited by dabbawalas on

railway platforms. Addresses are passed on to the dabbawala operating in the specific area,

who then visits the customer to finalize arrangements. Today customers can also log onto the

website www.webrishi.com to access the service.

Typically, a twenty member group has 675 customers and earns Rs 100,000 per month which

is divided equally even if one dabbawala has 40 customers while another has 30. Groups

compete with each other, but members within a group do not. It's common sense, points out

one dabbawala.

Meetings are held in the office on the 15th of every month at the Dadar. During these

meetings, particular emphasis is paid to customer service. If a tiffin is lost or stolen, an

investigation is promptly instituted. Customers are allowed to deduct costs from any

dabbawala found guilty of such a charge.

If a customer complains of poor service, the association can shift the customer's account to

another dabbawala. No dabbawala is allowed to undercut another.

Uninterrupted services

The service is uninterrupted even on the days of extreme 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

on chits inside the boxes. Of course, this was before the telecommunications revolution.

PORTERS FIVE FORCE THEORY

Network

New entrant Competition: Its difficult to replicate their supply chain ts: 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.

Achievements.....

Six Sigma Performance

Guinness Book of World Record

Record with Guinness Book of World Record

Registered with Ripley's “ believe it or not”.

Received ISO 9001 : 2000 Certificate

Fie Foundation Award’s 2007

CASE STUDY made by :

Harvard business school

ICFAI Press Hyderabad & Bangalore

Richard Ivey School of Business – Canada

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

Berkeley.

Documentaries made by :

BBC ,UTV, MTV, ZEE TV, AAJ TAK, TV TODAY, SAHARA SAMAY, STAR TV

In 1998 two Dutch filmmakers, Jascha De Wilde and Chris Relleke, made a

documentary called "Dabbawalas, Mumbai's unique lunch service" and in

2001, the Christian Science Monitor, the Boston-based newspaper, covered the

Dabbawalas in an article

called "Fastest Food: It's Big Mac vs. Bombay's Dabbawalas" The British

Broadcasting Corporation and the

Australian Broadcasting Corporation have done features on the delivery system as

well, while Prince

Charles was so impressed with their service that he had even invited a few

Dabbawalas to his wedding with Camilla Parker in London

Invitations from :

CII for conference held in Bangalore, IIML, IIMA, CII Cochin, CII Delhi, Dr.

Reddy’s Lab Foundation Hyderabad, SCMHRD Pune, SCMHRD Nasik, Sadahana –

Pune, Rotary Club – Bangalore, NIQR at Chennai.

Management Lessons

Utmost Dependence on Human Capital

Honesty & Integrity

Discipline & Time Management

Pride towards work

Recruitment policies and manpower management

Musical Meditation

Sustained success will lead to fame.

A

Seminar Report

On

THE WONDER OF DABBAWALAS

UNFOLDED

Author

Dhanraj Kumar

I MBA ‘A’ Section

JKSHIM, Nitte

Under the Guidance of

Dr. G.V Joshi

Professor

JKSHIM, Nitte Date of presentation : 28-11-2011