MUMBAI DABBAWALA

SUPPLY CHAIN MANAGEMENT PRACTICES

Presented by:
Dr. Debomalya Ghose,
Asstt. Professor, Department of Business Administration,
Assam University.
1. INTRODUCTION

A dabbawala, also spelled as dabbawalla or dabbawallah,

literally meaning person with a box, is a person in
the Indian 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 (mostly in the suburbs), delivering it to
their respective workplaces and returning back the empty
boxes by using various modes of transport. "Tiffin" is an old-
fashioned English word for a light lunch or afternoon snack,
and sometimes for the box it is carried in. For this reason,
the dabbawalas are sometimes called Tiffin Wallahs.

The concept of the dabbawala originated when India was

under British rule. Many British people who came to
the colony did not like the local food, so a service was set up
to bring lunch to these people in their workplace straight from
their home. Nowadays, although Indian business men are the
main customers for the dabbawalas, increasingly affluent
families employ them instead for lunch delivery to their
school-aged children. Even though the services provided
might include cooking, it primarily consists of only delivery
either home-made or in that latter case, food ordered from a
restaurant.

At 19,373 persons per km², Mumbai is India's most densely

populated city with a huge flow of traffic. Because of this,
lengthy commutes to workplaces are common, with many
workers traveling by train.

Instead of going home for lunch or paying for a meal in

a café, many office workers have a cooked meal sent either
from their home, or sometimes from 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 Dabbas
from homes or from the Dabba makers. The Dabbas have
some sort of distinguishing mark on them, such as a color or
symbol. 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.

It has been recognized since 2002 to be one of the most

reliable supply chains in the world, after being given a six
sigma rating by Forbes Magazine. This is despite the supply
chain using no computers or modern technology and most of
the delivery staff being illiterate.

A few years ago, US business magazine Forbes gave

Mumbai's dabbawallas a Six Sigma performance rating, or a
99.999999 percentage of correctness.
2. SUPPLY CHAIN MANAGEMENT

2.1 What is supply chain?

A supply chain consists of all parties involved, directly or
indirectly, in fulfilling a customer request. The supply chain
includes not only the manufacturer and suppliers, but also
transporters, warehouses, retailers, and even customers
themselves. Within each organization, such as a manufacturer,
the supply chain includes all functions involved in receiving
and filling a customer request. These functions include, but
are not limited to, new product development, marketing,
operations, distribution, finance, and customer service.

Consider a customer walking into a Wal-Mart store

to purchase detergent. The supply chain begins with the
customer and his or her need for detergent. The next stage of
this supply chain is the Wal-Mart retail store that the customer
visits. Wal-Mart stocks its shelves using inventory that may
have been supplied from a finished-goods warehouse or a
distributor using trucks supplied from a finished-goods
warehouse or a distributor using trucks supplied by a third
party. The distributor in turn is stocked by the manufacturer
(say, Proctor & Gamble [P&G] in this case). The P&G
manufacturing plant receives raw material from a variety of
suppliers, who may themselves have been supplied by lower-
tier suppliers.

This example illustrates that the customer is an integral

part of the supply chain. In fact, the primary purpose of any
supply chain is to satisfy customer needs and, in this process,
generate profit for itself. The term supply chain conjures up
images of product or supply moving from suppliers to
manufacturers to distributors to retailers to customers along a
chain. This is certainly part of the supply chain, but it is also
important to visualize information, funds, and product flows
along both directions of this chain. The term supply chain
may also imply that only one player is involved at each stage.
In reality, a manufacturer may receive material from several
suppliers and then supply several distributors. Thus, most
supply chains are actually networks. It may be more accurate
to use the term supply network or supply web to describe the
structure of most supply chains.
A typical supply chain may involve a variety of stages. These
supply chain stages include:

• Customers

• Retailers

• Wholesalers/distributors

• Manufacturers

• Component/raw material suppliers

Each stage in a supply chain is connected through the flow of

products, information, and funds. These flows often occur in
both directions and may be managed by one of these stages or
an intermediary. The appropriate design of the supply chain
depends on both the customer’s needs and the roles played by
the stages involved.

The objective of a supply chain

The objective of every supply chain should be to maximize

the overall value generated. The value a supply chain
generates is the difference between what the final product is
worth to the customer and the costs the supply chain incurs in
filling the customer’s request. For most commercial supply
chains, value will be strongly correlated with supply chain
profitability, the difference between the revenue generated
from the customer and the overall cost across the supply
chain.

Having defined the success of a supply chain in terms of

supply chain profitability, the next logical step is to look for
resources and cost. For any supply chain, there is only one
source of revenue: the customer. The customer is the only one
providing positive cash flow for the supply chain. All other
cash flows are simply fund exchanges that occur within the
supply chain, given that different stages have different
owners. All flows of information, product or funds generate
costs within the supply chain. Thus, the appropriate
management of these flows is a key to supply chain success.
Effective supply chain management involves the management
of supply chain assets and product, information, and fund
flows to maximize total supply chain profitability.

2.2 Decision phases in a supply chain

Successful supply chain management requires many decisions
relating to the flow of information, product, and funds. Each
decision should be made to raise the supply chain surplus.
These decisions fall into three categories or phases depending
on the frequency of each decision and the time frame during
which a decision phase has an impact. As a result, each
category of decisions must consider uncertainty over the
decision horizon.

1. SUPPLY CHAIN STRATEGY /DESIGN:

During this phase, given the marketing and pricing plans for a
product, a company decides how to structure the supply chain
over the next several years. It decides what the chain’s
configuration will be, how resources will be allocated, and
what processes each stage will perform. Strategic decisions
made by companies include whether to outsource or perform a
supply chain function in-house, the location and capacities of
production and warehousing facilities, the products to be
manufactured or stored at various locations, and the type of
information system to be utilized. A firm must ensure that the
supply chain configuration supports its strategic objectives
and increases the supply surplus during this phase.

2. SUPPLY CHAIN PLANNING:

For decisions made during this phase, the time frame
considered is a quarter to a year. Therefore, the supply chain’s
configuration determined in the strategic phase is fixed. This
configuration establishes constraints within which planning
must be done. The goal of planning is to maximize the supply
chain surplus that can be generated over the planning horizon
given the constraints established during the strategic or design
phase. Planning includes making decisions regarding which
markets will be supplied from which locations, the
subcontracting of manufacturing, the inventory policies to be
followed, and the timing and size of marketing and price
promotions. In the planning phase, companies must include
uncertainty in demand, exchange rates, and competition over
this time horizon in their decisions. Given a shorter time
frame and better forecasts than the design phase, companies in
the planning phase try to incorporate any flexibility built into
the supply chain in the design phase and exploit it to optimize
performance. As a result of the planning phase, companies
define a set of operating policies that govern short-term
operations.

3. SUPPLY CHAIN OPERATION:

The time horizon here is weekly or daily, and during this
phase companies make decisions regarding individual
customer orders. At the operational level, supply chain
configuration is considered fixed and planning policies are
already defined. The goal of supply chain operations is to
handle incoming customer orders in the best possible manner.
Because operational decisions are being made in the short
term (minutes, hours or days), there is less uncertainty about
demand information. Given the constraints established by the
configuration and planning policies, the goal during the
operation phase is to exploit the reduction of uncertainty and
optimize performance.

2.4 Supply chain performance:

achieving strategic fit
Strategic fit means that both the competitive and supply chain
strategies have aligned goals. It refers to consistency between
the customer priorities that the competitive strategy hopes to
satisfy and the supply chain capabilities that the supply chain
strategy aims to build.

There are three basic steps to achieving strategic fit:

1. Understanding the customer and supply chain
uncertainty: First, a company must understand the
customer needs for each targeted segment and the
uncertainty the supply chain faces in satisfying these needs.
These needs help the company identify the extent of the
unpredictability of demand, disruption, and delay that the
supply chain must be prepared for.

2. Understanding the supply chain capabilities: There are

many types of supply chains, each of which is designed to
perform different tasks well. A company must understand
what its supply chain is designed to do well.

3. Achieving strategic fit: If a mismatch exists between what

the supply chain does particularly well and the desired
customer needs, the company will either need to restructure
the supply chain to support the competitive strategy or alter
its competitive strategy.

A supply chain can be classified into two categories:

1. Responsive supply chain.

2. Efficient supply chain.

RESPONSIVE SUPPLY CHAIN:

Supply chain responsiveness includes a supply chain’s

ability to do the following:

1. Respond to wide ranges of quantities demanded

2. Meet short lead times

3. Handle a large variety of products

4. Build highly innovative products

5. Meet a high service level

6. Handle supply uncertainty

These abilities are similar to many of the characteristics of

demand and supply that led to high implied uncertainty. The
more of these abilities a supply chain has, the more responsive
it is.

Responsiveness however comes at a cost. For instance, to

respond to a wider range of quantities demanded, capacity
must be increased, which increases costs. This increase in cost
leads to the second category of supply chain.

EFFICIENT SUPPLY CHAIN:

 It is the inverse of the cost of making and delivering a
product to the customer. Increase in cost lower efficiency.
For every strategic choice to increase responsiveness, there
are additional costs that lower efficiency.

COST-RESPONSIVENESS EFFICIENT FRONTIER

FINDING THE ZONE OF STRATEGIC FIT

3. THE MUMBAI DABBAWALLA

A dabbawala (one who carries the box), sometimes spelled
dabbawalla, tiffinwalla, tiffinwalla or dabbawallah, is a person
in the Indian city of Mumbai whose job is to carry and deliver
freshly made food from home in lunch boxes to office
workers. Tiffin is an old-fashioned English word for a light
lunch, and sometimes for the box it is carried in. Dabbawalas
are sometimes called tiffin-wallas.
Though the work sounds simple, it is actually a highly
specialized trade that is over a century old and which has
become integral to Mumbai's culture.
 The dabbawala originated when a person named Mahadeo
Havaji Bachche started the lunch delivery service with about
100 men. Nowadays, Indian businessmen are the main
customers for the dabbawalas.

Who are they?

They are successor of the great worriers “Mawle”, who were
associated with the Nobel king Chhatrapati Shivaji Maharaj, the
founder of Maratha Empire. They starved to protect people from
brutality of the rulers. They are starving to feed our people on time.

They carry tiffin (Lunch box) from the home of customer and carry
it to their work place of work.

• Started in 1890
• Charitable trust: Registered in 1956
• Avg. Literacy Rate: 8th Grade Schooling
• Total area coverage: 60 Kms to 70 Kms
• Employee Strength: 5000
• Number of Tiffin's: 2, 00,000 Tiffin Boxes i.e. 4, 00,000
transactions every day.
• Time taken: 3 hrs.

How do they work?

• They work as work is worship. Their motto is 100%

customer satisfaction with no error. Their logistics
and supply chain system is among the top in the world
with SIX SIGMA rating. They work on central,
western and harbour railway lines. They care for the
health of their customers by providing home cooked
food.

• Error Rate: 1 in 16 million transactions

• Six Sigma performance (99.999999)
• Technological Backup: Nil.
• Cost of service - Rs. 300/month ($ 6.00/month)
• Standard price for all (Weight, Distance, Space)
• Rs. 36 Cr. Turnover approx. [6000*12*5000=360000000
i.e. Rs. 36 crores p.a.]
 • “No strike” record as each one a share holder
• Earnings -5000 to 6000 p.m.
• Diwali bonus: one month's from customers
• 0 % fuel • 0 % investment

• 0 % modern • 100 % Customer

technology Satisfaction

• 99.9999% • 0 % Disputes
performance

• No Alcohol Drinking during business hours

• Wearing White Cap during business hours
• Carrying Identity Cards

The Mumbai Dabbawalas were honoured by Prince Charles

on the 4th of November, 2003. He took keen interest in their way of
functioning, expressed surprise at their efficiency and was struck
with awe when he was told that they didn’t employ any
technology. The prince was presented a small memento,
accompanied with a garland, a Gandhi topi and a trophy by the
dabbawalas.

AWARDS
• Shri.Varkari Prabhodhan Mahasamati Dindi Palkhi Sohala –
4th March – 2001.
• Documentaries made by BBC, UTV, MTV, ZEE TV, AAJ
TAK, TV TODAY, SAHARA SAMAY, STAR TV, CNBC
TV 18, CNN, SONY TV, TV TOKYO, NDTV, Channel 7,
DD Metro, Doordarshan.

• CASE STUDY –
Richard Ivey School of Business – Ontario
IFIM Business School Bangalore
IIM Ahmedabad
ICFAI Press Hyderabad
Agrawal Institute of Management, Mumbai

• Invitation from CII for conference held in Bangalore, IIML,

IIMA, CII Cochin, CII Delhi, Dr. Reddy’s Lab Foundation
Hyderabad, SCMHRD Pune, Suryadatta Pune, SCMHRD
Nasik, MIT Pune, MET Mumbai, IIT & IIM, Harvard U.S.A.,
Cambridge Oxford .
Included in a subject in University of California, Berkeley.
Radio –
German Radio Network ,Radio Mirchi
Radio Mid-day FM – Gold
BBC Radio

Letter from "PRINCE CHARLES"

CERTIFICATE OF REGISTRATION
4. SUPPLY CHAIN PRACTICES:
MUMBAI DABBAWALA
Let us take an insight of the supply chain in case of the
Mumbai Dabbawalas. Mumbai dabbawalas actually act as an
intermediary to serve the customer by delivering lunches to
them which has been prepared at the houses of the respective
customers.

Product: Home cooked food.

Manufacturer: Housewives.

Supplier: The food prepared at home is supplied to the

dabbawalas to be dispatched on time to the office going
people and also school going children.

Means of transport: Bicycles, Carts, Railway (Mumbai

Local).

Customers: Office going people and also school children

in Mumbai.
The supply chain flow diagram explaining the entire supply
chain in the case of the working of the Mumbai Dabbawala.

The Mumbai Dabbawallas in their endeavour uses the

cheapest means of transportations. Their prime objective is to
deliver the tiffin boxes collected from houses to their
respective destinations strictly on time. Being recognised as
one of the most efficient and promising supply chain network
in the world, the dabbawalas ensure an efficiency of
99.9999%, thus satisfying the needs of their customers, which
is the primary objective of any supply chain.

At 19,373 persons per km², Mumbai is India's most densely

populated city with a huge flow of traffic. Because of this,
lengthy commutes to workplaces are common, with many
workers traveling by train.

Instead of going home for lunch or paying for a meal in

a café, many office workers have a cooked meal sent either
from their home, or sometimes from 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 Dabbas

from homes or from the dabba makers. The dabbas have some
sort of distinguishing mark on them, such as a color or
symbol. 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.

The service is almost always uninterrupted, even on the days

of severe weather such as monsoons. The local dabbawalas
and population know each other well and often form bonds of
trust. Dabbawalas are generally well accustomed to the local
areas they cater to, and use shortcuts and other low profile
routes to deliver their goods on time. Occasionally, people
communicate between home and work by putting messages
inside the boxes; however, with the rise of instant
communication such as SMS and instant messaging, this trend
is vanishing.

4. SUPPLY CHAIN SUCCESS:

MUMBAI DABBAWALA
The success of the Mumbai Dabbawalas has been
recognised worldwide. The success can be attributed to the
 well-disciplined organizational structure and a well-planned
operational process. Their strategy can be summarized as
follows:
1. Distributed the entire city into several areas or zones.
2. Assigned one Dabbawala for a specific area consisting of
about 30 houses.
3. Different set of dabbawalas to perform specific task to that
set.
4. Used cycle, push carts and the train “Mumbai local” as
their means of transport.

THE ORGANIZATIONAL STRUCTURE OF THE MUMBAI DABBAWALA

As discussed earlier, strategic fit can be achieved if the

following three steps are taken care of:
1. UNDERSTANDING THE CUSTOMER AND SUPPLY
CHAIN UNCERTAINTY:

Quantity of product needed in each lot: 1 Dabba per customer.

Response time: 12:30 pm i.e. lunch time in office.
Variety of products needed: Homemade food specific to each
customer.
Service level required: On time delivery of correct Dabbas.
Price of the product: Price paid for transportation from source
to destination, which is the cheapest as they only pay for using
the railway (Mumbai local).
Desired rate of innovation: Not much innovation required as
such.
2. UNDERSTANDING THE SUPPLY CHAIN
CAPABILITIES:

The Mumbai dabbawalas deal with only homemade cooked

food which they require to supply to their customers based at
different locations in the city of Mumbai. So it is clear that they
do not cater to variety of services. As a result, their supply
chain can be thought of an efficient supply chain, where cost
incurred to cater the service is very less considering the fact
that receive a huge turnover annually.
3. ACHIEVING STRATEGIC FIT:

The first step in achieving strategic fit is to assign roles to

different stages of the supply chain that ensure the appropriate
level of responsiveness. It is important to understand that the
desired level of responsiveness required across the supply
chain may be attained by assigning different levels of
responsiveness and efficiency to each stage of the supply chain.
The Mumbai dabbawalas have a very well organized as well as
disciplined and simple organizational structure, where each
member knows his assigned role. The organization is headed
by an executive committee, which looks after the entire
business. The executive committee is subordinated by the
Mukaddam (supervisors). Several dabbawalas work under one
Mukaddam. Everyone who works within this system is treated
as an equal. Regardless of a dabbawala's function, everyone
gets paid about two to four thousand rupees per month (around
25-50 British pounds or 40-80 US dollars). More than 175,000
or 200,000 lunches get moved every day by an estimated 4,500
to 5,000 dabbawalas, all with an extremely small nominal fee
and with utmost punctuality. According to a recent survey,
there is only one mistake in every 6,000,000 deliveries.
The Mumbai dabbawalas run a very successful business since
its inception about a century ago. Their supply chain has
achieved success as they could properly follow the three
necessary steps that guarantee success.

6.CONCLUSION:
Although the service remains essentially low-tech, with the
barefoot delivery men as the prime movers, the dabbawalas
have started to embrace modern information technology, and
now allow booking for delivery through SMS. A web site,
mydabbawala.com, has also been added to allow for on-line
booking, in order to keep up with the times. An on-line poll
on the web site ensures that customer feedback is given pride
of place. The success of the system depends on teamwork and
time management that would be the envy of a modern
manager. Such is the dedication and commitment of the barely
literate and barefoot delivery men (there are only a few
delivery women) who form links in the extensive delivery
chain, that there is no system of documentation at all.
A simple colour coding system doubles as an ID system for
the destination and recipient. There are no multiple elaborate
layers of management either — just three layers. Each
dabbawala is also required to contribute a minimum capital in
kind, in the shape of two bicycles, a wooden crate for the
tiffins, white cotton kurta-pyjamas, and the white trademark
Gandhi topi (cap). The return on capital is ensured by monthly
division of the earnings of each unit.
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 inside the boxes. However, this
was usually before the accessibility of instant
telecommunications. The BBC has produced a documentary
on dabbawalas, and Prince Charles, during his visit to India,
visited them (he had to fit in with their schedule, since their
timing was too precise to permit any flexibility). Owing to the
tremendous publicity, some of the dabbawalas were invited to
give guest lectures in top business schools of India, which is
very unusual. Most remarkably in the eyes of many
 Westerners, the success of the dabbawala trade has involved
no Western modern high technology. The main reason for
their popularity could be the Indian people's aversion to
Western style fast food outlets and their love of home-made
food.
The Mumbai dabbawala can now be thought of as a landmark
of efficiency, success and discipline. Generating employment
to an estimated 5000 Mumbaikars, the Mumbai dabbawala is
also a house of employment. The success story of the Mumbai
dabbawalas is sung worldwide, they have become a symbol,
an identity of India at the very first glance. The semiliterate
dabbawalas have shown us an exemplary example of how
efficient a supply chain can be.

7. REFERENCE:
1. Supply chain management – Sunil Chopra, Peter Meindl and
D.V. Kalra.
2. www.mydabbawala.com – official website of the Mumbai
dabbawalas.
3. www.wikipedia.org
4. Hart, Jeremy (2006-03-19). "The Mumbai working
lunch". The Independent Online (The Independent group,
London).
5. Harding, Luke (2002-06-24). "A Bombay lunchbox". The
Guardian.