Mumbai Dabbawalas, An Example Of Logistics Excellence

Often quoted as a standard example of six sigma implementation globally, the story of Mumbai Dabbawalas has become an outstanding example of excellence in logistics. (20 minutes read)

Often quoted as a standard example of six sigma implementation globally, the story of Mumbai Dabbawalas has become an outstanding example of excellence in logistics.

Bombay Dabbawalas Operations is a group of 5,000 individuals. With little or no formal education, these individuals are organised in the form of a cooperative, delivering approximately 150,000 lunch boxes throughout Mumbai, fourth most populous city in the world. That entails conducting upwards of 300,000 transactions in six hours each day, six days a week, and 52 weeks a year. Conducting operations without the use of any IT system or even cell phones, the mistakes are extremely rare.

bombay dabbawala operations

Bombay Dabbawala Operations is confined to Mumbai, India. Bombay Dabbawala Operations services include collection, transportation and delivery of lunch boxes from home to the office location in the morning. In the evening the (empty) lunch boxes are moved in the reverse direction. This service is aimed at the middle-income group families, small traders and owner managers.

The need for Bombay Dabbawala Operations service is driven by preference to home food by its customers. In addition, a typical Bombay Dabbawala Operations customer commutes about 100 km a day between his home and work place. The customer usually leaves their home early morning to work. At such a time, lunch may not be ready.

Geographically, Mumbai is structured in such as way that commercial establishments are isolated on one pole position and middle-income residential on the other. Accordingly, the lunch box traffic movement is predominantly uni- directional from one pole to another in the morning and vice versa in the afternoon.

Bombay Dabbawala Operations started its operation with a modest beginning in 1890 by a group of people from Pune to support their livelihood in Bombay. The system has been operational for 120 years without any interruption.

Bombay Dabbawala Operations reported less than six errors in 13 million transactions. Bombay Dabbawala Operations not only provides clean home food but it also delivers it safe against theft.

standard operating procedure

Let us have a look at their standard operating procedures. Bombay Dabbawalas Operations is designed to collect, transport and distribute lunch boxes to its customer routinely every day for 25 working days in a month.

1. There are 5000 Dabbawalas in the organisation with each Dabbawala assigned a set of up to 30 customers in a specific geographical area.
2. Each Dabbawala visits a pre-assigned and fixed route and carries the lunch boxes and brings it to the nearest railway station.
3. Up to eight Dabbawalas are organised as a team and up to eight teams form a group. There are 120 groups in the system that are responsible for entire operations such as customer care, quality, complaint management, manpower recruitment, compensation, discipline, scheduling of work, collection, accounts receivables and revenue management. The teams are responsible for operational execution.
4. At the originating railway station, a team of designated Dabbawallahs would sort the lunch boxes according to their destination. The sorting process is facilitated by a detailed and elaborate codification system. The essence of the codification system is it clearly identifies the origin of the lunch box, the associated collection team member, the destination, the corresponding delivery team member, at the delivery location, destination, location building identification and floor number.
5. The origin-hub transfer is facilitated by the greater frequency of suburban trains. The lunch boxes arrive at destination railway stations by 11.30 a.m. The subsequent delivery is completed before 1.00 p.m.
6. By 3.30 p.m. they return to the offices and buildings where they left the boxes and collect the empty boxes for their return journey.

The sorting and loading operations need care and they are time bound. They are carried out in areas which are public places. These locations are usually congested. The origin-hub transfer normally happens in designated carts. These carts are loaded in pre-determined compartments in the beginning or at the end of the train.

structure and organisation

The Bombay Dabbawala Operations is organised as a co-operative structure to symbolise equality and fairness. The three tier structure is readily scalable based on business opportunity and volume. It eminently suits the attention needed at specific territories. It ensures attention to detail and decentralisation at the team level. The team is nothing but a confederation of members. Each member is associated with a route. In this sense, the revenue opportunity is well integrated with the organisation structure. The scale and scope economics are managed respectively by the teams and groups. The present structure is an optimal way of delivering centralised planning and decentralised execution of business services.

codification system

To convey information, the Dabbawalas rely on a system of very basic symbols. The lid of a box has three key markings on it.
The first is a large, bold number in the centre, which indicates the neighbourhood where the box must be delivered.
The second is a group of characters on the edge of the lid: a number for the dabbawala who will make the delivery, an alphabetical code (two or three letters) for the office building, and a number indicating the floor.
The third—a combination of colour and shape, and in some instances, a motif—indicates the station of origin. Customers supply small bags for carrying their box, and the variation in the bags’ shapes and colours helps workers remember which box belongs to which customer.

The coding system contains just enough information for people to know where to deliver the boxes, but it doesn’t allow for full addresses. The Dabbawalas, who run the same route for years, don’t need all those details, and inserting them would clutter the lid, slow the sorting process, and possibly lead to errors.

This pragmatic codification system ensures complete traceability of lunch boxes in the system. It enables material flow and tracking of individual boxes by detailed information. It is inexpensive, less elegant, yet detailed enough to support operations. It integrates the knowledge and information of individual members on route, origin, handling agent, destination address etc.

Human infrastructure management

The Dabbawalas essentially manage themselves with respect to hiring, logistics, customer acquisition and retention, and conflict resolution. This helps them operate efficiently and keep costs low and the quality of service high. All Dabbawalas contribute to a charitable trust that provides insurance and occasional financial aid—for example when a Dabbawala needs to replace a bicycle that’s been stolen or is broken beyond repair.

Each Dabbawala is an entrepreneur who is responsible for negotiating prices with his own customers. However, governing committees set guidelines for prices, which take into account factors such as the distance between a customer’s residence and office and the distance between that office and the closest railway station. Because Dabbawalas own their relationships with customers and tend to work in the same location for years, those relationships are generally long-term, trusting ones. The Dabbawalas within a group don’t have a monopoly over any particular area; they’re encouraged to seek out new customers, even in a building that is served by a colleague. However, once the relationship is established, no other Dabbawala is permitted to go after the same customer and “steal” him.

When someone wants to join a local dabbawala group, the group will assess whether there’s enough demand to add another person. New hires are trained on the job by the group. They learn to assist in all activities. After a probation period of six months, they can buy into the business with a sum equal to ten times their expected monthly income. So, for example, if a new hire expects to make ₹ 10,000 a month at a particular unit, then he would need ₹100,000to become an equity partner who would share in the profits.

Dabbawalas with more than ten years of experience serve as supervisors. Every group has one or more supervisor, who supervises the coding, sorting, and loading and unloading of boxes and are responsible for resolving disputes, overseeing collections, and troubleshooting. They also pick up and deliver boxes themselves. Members elect representatives from among the supervisors to serve on two managing committees that meet monthly to tackle operational and organisational issues as well as problems that cannot be resolved at the local level.

key LEARNING

Bombay Dabbawala Operations creates a sense of pride and a source of inspiration to managers and academicians. The organisation has perfected its systems and procedures to handle the large volume of operations with negligible errors (six sigma). Its operations are customer centric, employee driven, and value based. The management practices at Bombay Dabbawala Operations are intuition based (codification system, homogeneous employee background, innovative Human Resource practices etc).

Leave a Reply