MY FAVOURITE CASE STUDY ON SUPPLY CHAIN MANAGEMENT-PART- IV (DABBAWALLAS) LESSONS LEARNT .... Mumbai Dabbawalas and their Million Dollar Lessons to Entrepreneurs Often it is the simplicity of an idea and the sheer passion behind it that makes builds great organizations and companies. It is this very simplicity and the zeal to work hard that has made the Nutan Mumbai Tiffin-box Supplier Trust, one of the most efficient services across the world. It does not just stop there. Top notch universities like Harvard and leading companies like Microsoft, Accenture and SAP have invited the members of this association and done detailed case studies on their functionality and business models. Entrepreneur Lessons has etched out some of the most important teachings that the Dabbawalas can provide to lead a startup to success. These are the lessons that every entrepreneur should learn from the Dabbawalas. 1. Effective Hierarchy The association has more than four thousand semi-literate members and has survived the industry for more than a hundred years. With efficient collaboration between the different levels of operation like the governing council consisting of president, vice-president, general secretary, treasurer and nine directors; the mukadams and the Dabbawalas the association provides a customer loyal door to door delivery service. 2. The Cypher Dabbawalas collect and deliver Tiffin boxes from every corner of the city serving over a million families. The boxes are coded with a particular set of colors which define the region of reception and delivery. The codes are governed by an experience set of mukadams who have good knowledge about the ciphering technique. It is said that even a minute mistake in the coding or the decoding can put the complete system in a mess. 3. Co-ordination and support The service comprises of many small groups which are financially independent but work together with great synchronization. Though there is tough competition among the groups to fetch customers and provide better service, they work towards the same goal. 4. Time Management For the delivery service the most important parameter is the time. Any discrepancy in the timely-ness of the service results in service failure. Hence the mission to deliver the Dabbas starts every morning at 9 and by the lunch time that is about 12 in the noon, all the boxes are coded dispatched and delivered. Post lunch, the whole process is reversed and the dabbas are returned back to the respective houses. 5. Referrals To acquire more customers, the Dabbawalas encourage their clients to make referrals to there relatives friends and acquaintances. Nothing can boost the business more than promotion and references of the services backed by customer satisfaction. MORE…… 4 reasons the Dabbawala supply chain succeeds while corporate giants struggle When you think of the world’s most efficient and successful performance and supply chains, what comes to mind? For many, large corporate giants like Dell, Wal-Mart and Coca-Cola instantly pop into our heads. But few, if any, would think a cultural structure and meal delivery system in Mumbai would be among the world’s 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 regarded as one of the top performance chains in the world. In fact, the 125-year-old industry using Dabbawalas was recognized at the six sigma level by Forbes in 2002. More than 175,000 lunches are moved and delivered each day by an estimated 4,500 to 5,000 dabbawalas across Mumbai. What’s more impressive is that according to a recent survey, dabbawalas make less than one mistake in every 6 million deliveries. Now that’s efficiency. So, what are these dabbawalas doing so right? What can larger organizations with many more resources learn from this simplistic system? Here are a few things that stand out : 1. No over-reliance on technology. Sure, the dabbawalas are now 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. The lesson for organizations? Don’t expect technology to solve your issues—usually the issue has more to do with process, execution and expectations than it does bits and bytes. 2. Create an integrated performance chain. In other words, the dabbawala system keeps its eye on the sum—not the individual parts. When you boil it down to simple terms, a performance chain is really just a system of moving pieces. Focus too much on those individual pieces and you get hung up in the details and, as a result, be less efficient. Concentrate on the entire system and flow of products and information and you have a much better chance of success. 3. Acute visibility. The beauty of the dabbawala-based system is that all the dabbawalas understand exactly what is happening and when. To the minute. If certain deadlines and hand-offs are missed—people don’t eat. It’s as simple as that. Make sure everyone within your chain understands what he or she need to do. Where they need to be. And what needs to happen for the chain to be successful. 4. Keep it simple. Real simple. One of the key lessons any organization can learn from the dabbawalas is the simplicity with which this system works. The dabbawalas are intimately aware of what their customers value (food delivered on time, every day). And, just as importantly, they don’t try to do anything other than that. They don’t overcomplicate things. They don’t add extraneous value. They simply understand what their customers want—and they focus 100 percent of their time and energy on meeting that need. As you look at your performance chain, how can you simplify your system? Can you take pieces that are not meeting the single customer need out of the chain? And, do you really know what your single customer need is? Always a good place to start. YET MORE….. A lesson from Mumbai’s Dabbawalas FICCI Ladies Organisation (Kolkatta) held its first meet for 2012-13 in a novel way recently — an interaction with two members of the Mumbai Dabbawala Association, which was formed in 1890. With a six-sigma rating and an error rate of one in 16 million, association president Raghunath Medge and general secretary Gangaram Talekar had quite a story to tell. Modus operandi: Their day begins at 7am, as they set out from the suburbs to reach their workplace. By 9-9.30am they start collecting tiffin boxes from the households. Each person collects about 40 lunch boxes. About 20 people make up a group who meet at a given station for sorting. They board the trains to their respective destinations. At the station, another group sorts them again and starts the delivery. The dabbawalas cover nearly 70 stations across the three railway lines (central, western and harbour). After lunch, the group that makes the delivery also collects the empty tiffin boxes and brings them back to the station for sorting. Each group then takes back the dabbas according to the area assigned to them and the process is repeated in reverse. The secret behind their efficiency: “Four of those six sigmas are actually due somewhere else — two to the Mumbai trains and two to our cycles,” said Medge. The Mumbai trains form a vital part of their supply chain. The train strikes in 1974 were the only time when they weren’t able to deliver the dabbas. No, not even when all of Mumbai was standing still on July 26, during the 2005 floods, did the dabbawalas slow down. And why cycles? “Cycles help us get to the stations quickly and since you don’t need a licence to ride a bicycle, no one stops us when we flout signals or ride over footpaths to make it for the 10.30am local,” he added. No strikes since 1890: Each dabbawala is a shareholder and a member of the association. “This ensures a commitment to work. Everyone has seen thousands of families suffer due to the mill strikes. So one does not believe in strikes any more. For the dabbawalas, work is worship and duty is God,” said Talekar. Now you know why there is no Calcutta counterpart? Vital statistics Number of people employed: 5,000 Average level of education: 8th standard Coverage area: 60-70 km Number of tiffin boxes: 2,00,000 Number of transactions per day: 4,00,000 Delivery time: 9am to noon Monthly charges: Rs 500 Salary drawn: Rs 8,000-9,000 a month Did you know? The dabbawalas can be fined up to Rs 1,000 for not wearing their cap or for being absent without notice. Overheard Would they be able to repeat the same model in Calcutta, asked an audience member. “No. Calcuttans might just call a strike on Day One of their working!” quipped another. COMPILED BY J S BROCA 13TH SEPTEMBER 2013 (to be continued)...
Posted on: Fri, 13 Sep 2013 01:39:24 +0000
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