For every Mumbaikar, men clad in white cotton kurta-pyjama and white trademark Nehru cap ringing their bicycle bell play a very important role in his work-day life. Every B-school wants to learn from these men. They are an example of perfect logistics management and distribution framework. Infact, corporates like Airtel wanted to tap their distribution network to widen their consumer base. They are perhaps the only Indians to get an invitation to attend Prince Charles’ wedding. And, more recently, they were seen in Salman Khan’s Dus Ka Dum show. That’s Mumbai’s dabbawala for you.
They draw such attention because of their utmost punctuality and an error rate of just 1 in 16 million transactions while handling around 2 lakh dabbas (boxes) daily. Recognising this, they have been given the six-sigma performance rating of 99.99 from Forbes Global magazine. Their style of operation is dependent only on human capital with minimum infrastructure, technology and zero documentation. As most of our modern business and education is based on technology and efficient business practices, theirs, a contrast, based on human and social ingenuity has given them a cult status. We take a look at how their business works.
Identifying a niche
It all started when Mahadeo Havaji Bachche, the founder of Mumbai Dabbawalas, identified an opportunity in the food servicing business in the 19th century, a period which saw an influx of migrants into Mumbai from various parts of the country. With canteens non-existent and food preference varying, a niche market was created that called for a collective effort by semi-literate villagers to pioneer the service of providing home cooked food to urban employed men. Bachche started Nutan Mumbai Tiffin Box Suppliers Trust (NMTBST) now popularly known as Mumbai’s Dabbawala with just 20 Dabbawalas in the year 1890. Today, their workforce is a strong 5,000 and they account for almost 120 million tiffin deliveries in a year, with the gross turnover of Rs 50 crores.
Unique Mumbai model
When asked about the success of the Dabbawalas in Mumbai, Pawan Agrawal, CEO of NMTBST points out, “Mumbai constitutes a varied and diverse community from all over India, and thus specific food preferences which can be catered to by home cooked food only.” Moreover, an average Mumbaikar’s working day starts very early owing to the long distances between the work place and home with little or no time to prepare a good meal in the morning. This is a key selling point for the dabbawala network to become successful. Also, operationally, what makes their job easy is the single directional flow of traffic during the day, from the suburbs towards the city.
“Mumbai constitutes a varied and diverse community from all over India, and thus specific food preferences which can be catered to by home cooked food only,” says Pawan Agrawal, CEO of Mumbai’s Dabbawalas.
The suburban homemaker engages a local dabbawala for a paltry sum of Rs 300 to deliver home cooked lunch to her husband who works in South Mumbai. A specific time for pick up is fixed and even a minute late in handing over the box to the dabbawala means that the man goes without lunch.
Delivery with precision
Once they collect the dabbas from the household, they deliver it to the nearest railway station. Mumbai’s railway infrastructure offers an easy platform for their business to operate without any glitches. It provides sorting areas on platforms as well as special compartments on trains travelling south between 10.00 and 11.30 in the morning. During the journey, dabbawalas regroup according to the number of boxes to be delivered in a particular area. This is then transported to the railway station closest to the destination. Then another team collects the dabbas from that station to the final delivery point. If 150 dabbas are to be delivered to a specific station area, then four people are assigned to that station, keeping in mind that one person can carry only 35-40 boxes. It takes about 10 minutes to 15 minutes to search, assemble and arrange 40 tiffin boxes onto a crate, and by 12.30 PM they are delivered to offices.
Despite handling 2 lakh dabbas, there is very little scope for error. This is because of the mark on top of the ‘dabba’, which is actually a coded delivery address. Everything including the pick-up station code, the collection team’s code and the destination code are included as numbers and alphabets on the box. The empty boxes are also collected and taken back to the respective homes, (or even to catering services or hotels) before 5 PM.
People, their strength
World over, logistics is the new mantra for building competitive advantage. Mumbai’s Dabbawalas developed their very own desi version long before the world recognized the importance of logistics in running a business. Agrawal, who has given numerous lectures at business schools says, “Despite all the training and educational qualification of employees of the corporate world, they sometimes fall short in motivation and goal orientation. It takes a group of semi-literate, but supremely self-motivated bunch of Dabbawalas, to show the way to India Inc. It is our utmost discipline and the theory that the customer is our focal point that has paved the way to this unparalleled success.”
Despite changing the lives of Mumbaikars or making it to the lectures of top B-schools, a dabbawala earns only around Rs 5,000 to Rs 6,000 in a month with annual bonus and increments. “Even with not so attractive emoluments, the attrition levels are almost nil owing to the discipline and commitment exhibited by the Dabbawalas. The corporate world finds it difficult to tackle the high rate of attrition. Youngsters have to learn that there are no quick fix solutions and there is no shortcut to hard work and commitment,” feels Agrawal. A commendable fact is that the Dabbawalas have never carried out self-branding exercises. The credibility associated with their brand has largely been acquired through word of mouth because of their high standards of legendary customer service.
Dabbawalas are already imparting their knowledge to management students and entrepreneurs on supply chain management principles. Now they are all set to offer consultancy services on logistics management as a separate revenue stream. “We are exploring options of presenting our successful management practices to Indian corporate houses as part of a consultancy business division to enhance our other sources of income,” says an excited Pavan Agrawal. The Dabbawalas have made presentations to various corporate houses, banking firms and consulting majors. These include Reserve Bank of India, Union Bank of India, ICICI Bank, Kirloskar, Finolex, Accenture, ING Vysya Bank, Godrej, Coca-Cola and Daimler Chrysler, among others.
Until recently, socialists predicted the fall of the dabbawala reign with ‘eating out’ becoming very popular among India’s emerging middle class. But the recession has brought back a sense of frugality and the Dabbawalas are back in business, better than before. And as long as there is healthy eating in vogue, Dabbawalas will not run out of dabbas to deliver!