The Dabbawalas: Lessons in Service Delivery

 

You may not have heard of the Dabbawalas in Mumbai, India, but they run one of the most efficient and effective food delivery services in the world. A dabbawala; also spelled as dabbawalla or dabbawallah; literally means “box person.” The Dabbawalas deliver food daily to a high volume of customers throughout the city of Mumbai.  The organization’s operational goals and challenges are shared by many of the world’s service companies. You can apply the lessons learned from the Dabbawalas’ business model and systems to improve service industry operations.

The Dabbawalas’ Business Model

5,000 Dabbawalas work daily to deliver home-cooked food to more than 400,000 customers in Mumbai. The food is delivered in cylindrical lunchboxes to customers working in offices or schools. The Dabbawalas utilize local trains, bicycles and hand carts to deliver food to customers. The organizational structure of the company is flat and includes a governing body, team supervisors and deliverymen. Each employee is an equal shareholder in the organization, and receives an equal share of the profits. The company is also Six-Sigma compliant. The service costs less than $10 a month for customers. Strong teamwork and strict time management are integral parts of the Dabbawalas’ success (The Economist).


Effective Lunchbox Coloring System

The Dabbawalas utilize a coloring system to differentiate lunchboxes. Most of the Dabbawalas are illiterate and do not use technology (Geobeats). The company developed a system which aligns its food delivery service with its employees’ skill sets. The system allows for quick identification, packaging, onboarding and distribution to customers. According to The Economist, lunchboxes are delivered to the right address 99.9999 percent of the time. Effective systems are critical to high quality, cost-effective service. The Dabbawalas’ delivery systems are designed to be reliable and flexible, and are capable of meeting fluctuations in demand.

Flat Organizational Structure and Incentives

The flat organizational structure of the Dabbawalas reduces overhead costs and empowers frontline employees. Pay is based on team results and is shared equally among employees. This incentivizes all team members to work efficiently to achieve optimal results. The Dabbawalas have also right-sized their workforce in an effort to reduce costs, and maximize the efficiency of operations. Performance evaluations and feedback are given at regular intervals, which align employee actions with the overall goals of the organization. The recruitment process for new employees is standardized, which helps to onboard the optimal candidates.

Cost-Effective Transportation

Utilizing trains, bicycles and hand carts substantially reduces operating costs for the Dabbawalas. Trucks, cars and other automobiles require large initial investments, maintenance and gasoline. Automobiles also require insurance and depreciate at regular intervals. The Dabbawalas’ transportation systems are cost-effective and timely. These cost savings are ultimately passed to customers in the form of low monthly service fees. The delivery methods utilized are sustainable and are not as harmful to the environment as automobiles. Plus employees are active, which contributes to better health and morale.

Low Transaction Error Rate

The Dabbawalas operate with a high degree of accuracy, and are said to be Six-Sigma compliant. According to the American Society for Quality, “Six-Sigma quality means no more than 3.4 defects per million opportunities.” The Dabbawalas have less than one error per million transactions (Geobeats). This means the Dabbawalas operate with a phenomenal level of accuracy rarely achieved by other businesses. Accuracy is important not only for customer satisfaction, but also for corporate profitability. The costs of rework, internal failures and other defects drive operating costs. Statistical accuracy of processes and systems is a sign of quality and sustainability.

Professors Learn from Dabbawalas

According to The Economic Times, Harvard professors are evaluating the Dabbawalas to learn management insights and lessons. These professors are trying to ascertain how an organization with limited resources and technology can achieve such high levels of precision. The Dabbawalas have become the subject of numerous research papers and classroom discussions. The Dabbawalas’ business model is unique in that it focuses on human ingenuity and social interaction versus technology. Large corporations are also taking notice of this successful business. Companies including Coca-Cola and Daimler have invited the Dabbawalas to explain their business model to managers (The Economist).

The Dabbawalas share common operational goals and challenges with other service industry companies. System optimization and process excellence are quality concepts which are effective in service operations. The Dabbawalas’ food delivery service in Mumbai, India, applies these concepts exceptionally well. The Dabbawalas have won worldwide notoriety for their business model and high quality service. You can take the lessons learned from the Dabbawalas and apply them to other service industry companies.

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