This action might not be possible to undo. Are you sure you want to continue?
SUPPLY CHAIN MANAGEMENT PRACTICES
Presented by: Dr. Debomalya Ghose, Asstt. Professor, Department of Business Administration, Assam University.
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 oldfashioned 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 resent 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.
where he and other collecting dabbawalas sort (and sometimes bundle) the lunch boxes into groups. with markings to identify the destination of the box (usually there is a designated car for the boxes). usually on bicycle. It has been recognized since 2002 to be one of the most reliable supply chains in the world.A collecting dabbawala. The grouped boxes are put in the coaches of trains. . The empty boxes.999999 percentage of correctness. The Dabbas have some sort of distinguishing mark on them. The markings include the rail station to unload the boxes and the building address where the box has to be delivered. This is despite the supply chain using no computers or modern technology and most of the delivery staff being illiterate. A few years ago. collects Dabbas from homes or from the Dabba makers. who delivers them. boxes are handed over to a local dabbawala. are again collected and sent back to the respective houses. after lunch. At each station. The dabbawala then takes them to a designated sorting place. or a 99. US business magazine Forbes gave Mumbai's dabbawallas a Six Sigma performance rating. after being given a six sigma rating by Forbes Magazine. such as a color or symbol.
Within each organization. the supply chain includes all functions involved in receiving and filling a customer request. and customer service. SUPPLY CHAIN MANAGEMENT 2. The distributor in turn is stocked by the manufacturer . new product development. The supply chain includes not only the manufacturer and suppliers. directly or indirectly. operations. such as a manufacturer. finance. 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. but also transporters. in fulfilling a customer request.1 What is supply chain? A supply chain consists of all parties involved. 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. but are not limited to. retailers. These functions include. marketing.2. The next stage of this supply chain is the Wal-Mart retail store that the customer visits. warehouses. distribution. and even customers themselves.
most supply chains are actually networks. and product flows along both directions of this chain. 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. Thus. . This is certainly part of the supply chain. a manufacturer may receive material from several suppliers and then supply several distributors. It may be more accurate to use the term supply network or supply web to describe the structure of most supply chains.(say. This example illustrates that the customer is an integral part of the supply chain. funds. but it is also important to visualize information. in this process. the primary purpose of any supply chain is to satisfy customer needs and. In fact. who may themselves have been supplied by lowertier suppliers. In reality. Proctor & Gamble [P&G] in this case). The P&G manufacturing plant receives raw material from a variety of suppliers. The term supply chain may also imply that only one player is involved at each stage. generate profit for itself.
The objective of a supply chain The objective of every supply chain should be to maximize the overall value generated. The appropriate design of the supply chain depends on both the customer’s needs and the roles played by the stages involved. 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 . and funds. information.A typical supply chain may involve a variety of stages. These flows often occur in both directions and may be managed by one of these stages or an intermediary. 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.
Effective supply chain management involves the management of supply chain assets and product. and fund flows to maximize total supply chain profitability. product. the appropriate management of these flows is a key to supply chain success. given that different stages have different owners. Thus.filling the customer’s request. For any supply chain. value will be strongly correlated with supply chain profitability. information. and funds. the next logical step is to look for resources and cost. All flows of information. Each . 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. product or funds generate costs within the supply chain. The customer is the only one providing positive cash flow for the supply chain. there is only one source of revenue: the customer. All other cash flows are simply fund exchanges that occur within the supply chain.2 Decision phases in a supply chain Successful supply chain management requires many decisions relating to the flow of information. 2. For most commercial supply chains.
given the marketing and pricing plans for a product. the location and capacities of production and warehousing facilities. As a result. a company decides how to structure the supply chain over the next several years.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. Strategic decisions made by companies include whether to outsource or perform a supply chain function in-house. A firm must ensure that the supply chain configuration supports its strategic objectives and increases the supply surplus during this phase. how resources will be allocated. each category of decisions must consider uncertainty over the decision horizon. the products to be manufactured or stored at various locations. SUPPLY CHAIN PLANNING: . It decides what the chain’s configuration will be. SUPPLY CHAIN STRATEGY /DESIGN: During this phase. 2. and what processes each stage will perform. and the type of information system to be utilized. 1.
companies must include uncertainty in demand. the subcontracting of manufacturing. 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. the time frame considered is a quarter to a year. Planning includes making decisions regarding which markets will be supplied from which locations. and competition over this time horizon in their decisions. Therefore.For decisions made during this phase. Given a shorter time frame and better forecasts than the design phase. SUPPLY CHAIN OPERATION: . This configuration establishes constraints within which planning must be done. In the planning phase. As a result of the planning phase. 3. companies define a set of operating policies that govern short-term operations. exchange rates. the supply chain’s configuration determined in the strategic phase is fixed. and the timing and size of marketing and price promotions. 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. the inventory policies to be followed.
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. Because operational decisions are being made in the short term (minutes. There are three basic steps to achieving strategic fit: .The time horizon here is weekly or daily. supply chain configuration is considered fixed and planning policies are already defined. and during this phase companies make decisions regarding individual customer orders. 2. hours or days). The goal of supply chain operations is to handle incoming customer orders in the best possible manner. the goal during the operation phase is to exploit the reduction of uncertainty and optimize performance. At the operational level. Given the constraints established by the configuration and planning policies. there is less uncertainty about demand information.4 Supply chain performance: achieving strategic fit Strategic fit means that both the competitive and supply chain strategies have aligned goals.
A company must understand what its supply chain is designed to do well. These needs help the company identify the extent of the unpredictability of demand. disruption. Understanding the supply chain capabilities: There are many types of supply chains. Achieving strategic fit: If a mismatch exists between what the supply chain does particularly well and the desired customer needs. and delay that the supply chain must be prepared for. each of which is designed to perform different tasks well. a company must understand the customer needs for each targeted segment and the uncertainty the supply chain faces in satisfying these needs. 3. Efficient supply chain. . Responsive supply chain.1. 2. 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. 2. Understanding the customer and supply chain uncertainty: First.
the more responsive it is. capacity must be increased. Meet a high service level 6. This increase in cost leads to the second category of supply chain. Handle a large variety of products 4. Respond to wide ranges of quantities demanded 2.RESPONSIVE SUPPLY CHAIN: Supply chain responsiveness includes a supply chain’s ability to do the following: 1. The more of these abilities a supply chain has. EFFICIENT SUPPLY CHAIN: . Handle supply uncertainty These abilities are similar to many of the characteristics of demand and supply that led to high implied uncertainty. to respond to a wider range of quantities demanded. For instance. which increases costs. Build highly innovative products 5. Meet short lead times 3. Responsiveness however comes at a cost.
COST-RESPONSIVENESS EFFICIENT FRONTIER . there are additional costs that lower efficiency.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.
sometimes spelled dabbawalla. Dabbawalas are sometimes called tiffin-wallas. tiffinwalla or dabbawallah. tiffinwalla.FINDING THE ZONE OF STRATEGIC FIT 3. Tiffin is an old-fashioned English word for a light lunch. it is actually a highly specialized trade that is over a century old and which has become integral to Mumbai's culture. Though the work sounds simple. . and sometimes for the box it is carried in. THE MUMBAI DABBAWALLA A dabbawala (one who carries the box). 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.
They starved to protect people from brutality of the rulers. • • Started in 1890 Charitable trust: Registered in 1956 .The dabbawala originated when a person named Mahadeo Havaji Bachche started the lunch delivery service with about 100 men. They are starving to feed our people on time. Nowadays. Indian businessmen are the main customers for the dabbawalas. They carry tiffin (Lunch box) from the home of customer and carry it to their work place of work. 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.
00.e.e. Cost of service . 4.999999) Technological Backup: Nil. Distance. Their logistics and supply chain system is among the top in the world with SIX SIGMA rating. Their motto is 100% customer satisfaction with no error.000 Tiffin Boxes i. They work on central. Space) Rs.a. Literacy Rate: 8th Grade Schooling Total area coverage: 60 Kms to 70 Kms Employee Strength: 5000 Number of Tiffin's: 2. 300/month ($ 6.Rs. • • • • • • Error Rate: 1 in 16 million transactions Six Sigma performance (99. 36 crores p. • How do they work? • They work as work is worship. 00. Turnover approx. Rs. 36 Cr. [6000*12*5000=360000000 i. They care for the health of their customers by providing home cooked food.00/month) Standard price for all (Weight. Time taken: 3 hrs. western and harbour railway lines.• • • • Avg.] .000 transactions every day.
a Gandhi topi and a trophy by the dabbawalas.9999% performance • 0 % Disputes • • • 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. The prince was presented a small memento.• • • • • “No strike” record as each one a share holder Earnings -5000 to 6000 p. He took keen interest in their way of functioning. Diwali bonus: one month's from customers 0 % fuel • 0 % investment 0 % modern technology • 100 % Customer Satisfaction • 99.m. accompanied with a garland. expressed surprise at their efficiency and was struck with awe when he was told that they didn’t employ any technology. 2003. AWARDS .
IIT & IIM. MTV. Mumbai Invitation from CII for conference held in Bangalore.Radio Mirchi • • • . ZEE TV. SAHARA SAMAY. Harvard U. Reddy’s Lab Foundation Hyderabad. IIMA. Included in a subject in University of California. Documentaries made by BBC.Varkari Prabhodhan Mahasamati Dindi Palkhi Sohala – 4th March – 2001. IIML. TV TOKYO. SCMHRD Pune. Suryadatta Pune. Cambridge Oxford .S. Doordarshan. Channel 7. CII Cochin. CII Delhi.• Shri.A. SONY TV. Berkeley. DD Metro. UTV. Radio – German Radio Network . AAJ TAK. CNBC TV 18. CASE STUDY – Richard Ivey School of Business – Ontario IFIM Business School Bangalore IIM Ahmedabad ICFAI Press Hyderabad Agrawal Institute of Management. CNN. STAR TV. MIT Pune. SCMHRD Nasik.. MET Mumbai. Dr. TV TODAY. NDTV.
Radio Mid-day FM – Gold BBC Radio Letter from "PRINCE CHARLES" CERTIFICATE OF REGISTRATION .
4. SUPPLY CHAIN PRACTICES: MUMBAI DABBAWALA .
Carts. 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. . Customers: Office going people and also school children in Mumbai. Manufacturer: Housewives. Means of transport: Bicycles. Product: Home cooked food. 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. Railway (Mumbai Local).Let us take an insight of the supply chain in case of the Mumbai Dabbawalas.
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 Mumbai Dabbawallas in their endeavour uses the cheapest means of transportations. the dabbawalas ensure an efficiency of .The supply chain flow diagram explaining the entire supply chain in the case of the working of the Mumbai Dabbawala.
The meal is cooked in the morning and sent in lunch boxes carried by dabbawalas. The grouped boxes are put in the coaches of trains. who have a complex association and hierarchy across the city. collects Dabbas from homes or from the dabba makers. At 19. thus satisfying the needs of their customers.373 persons per km². lengthy commutes to workplaces are common. The dabbas have some sort of distinguishing mark on them. The dabbawala then takes them to a designated sorting place. Instead of going home for lunch or paying for a meal in a café. essentially cooking and delivering the meal in lunch boxes and then having the lunch boxes collected and resent the next day. usually on bicycle. A collecting dabbawala.9999%. many office workers have a cooked meal sent either from their home.99. such as a color or symbol. Mumbai is India's most densely populated city with a huge flow of traffic. with many workers traveling by train. This is usually done for a monthly fee. or sometimes from a caterer who delivers it to them as well. where he and other collecting dabbawalas sort (and sometimes bundle) the lunch boxes into groups. which is the primary objective of any supply chain. Because of this. with markings .
even on the days of severe weather such as monsoons. 4. after lunch. who delivers them. Dabbawalas are generally well accustomed to the local areas they cater to. are again collected and sent back to the respective houses. The success can be attributed to the . and use shortcuts and other low profile routes to deliver their goods on time. SUPPLY CHAIN SUCCESS: MUMBAI DABBAWALA The success of the Mumbai Dabbawalas has been recognised worldwide. At each station. The service is almost always uninterrupted. boxes are handed over to a local dabbawala. The empty boxes. people communicate between home and work by putting messages inside the boxes. The local dabbawalas and population know each other well and often form bonds of trust. however. Occasionally. this trend is vanishing. The markings include the rail station to unload the boxes and the building address where the box has to be delivered. with the rise of instant communication such as SMS and instant messaging.to identify the destination of the box (usually there is a designated car for the boxes).
well-disciplined organizational structure and a well-planned operational process. Used cycle. UNDERSTANDING THE CUSTOMER AND SUPPLY CHAIN UNCERTAINTY: Quantity of product needed in each lot: 1 Dabba per customer. Response time: 12:30 pm i. Their strategy can be summarized as follows: 1. Assigned one Dabbawala for a specific area consisting of about 30 houses.e. lunch time in office. . Different set of dabbawalas to perform specific task to that set. strategic fit can be achieved if the following three steps are taken care of: 1. push carts and the train “Mumbai local” as their means of transport. 2. 4. Distributed the entire city into several areas or zones. 3. THE ORGANIZATIONAL STRUCTURE OF THE MUMBAI DABBAWALA As discussed earlier.
Desired rate of innovation: Not much innovation required as such. 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. As a result. So it is clear that they do not cater to variety of services. Price of the product: Price paid for transportation from source to destination. 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. 3.Variety of products needed: Homemade food specific to each customer. The organization is headed . Service level required: On time delivery of correct Dabbas. 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. where cost incurred to cater the service is very less considering the fact that receive a huge turnover annually. which is the cheapest as they only pay for using the railway (Mumbai local). The Mumbai dabbawalas have a very well organized as well as disciplined and simple organizational structure. where each member knows his assigned role. their supply chain can be thought of an efficient supply chain. 2.
there is only one mistake in every 6. Everyone who works within this system is treated as an equal.500 to 5. the dabbawalas have started to embrace modern information technology. and now allow booking for delivery through SMS. mydabbawala. A web site. More than 175. Their supply chain has achieved success as they could properly follow the three necessary steps that guarantee success. in order to keep up with the times. everyone gets paid about two to four thousand rupees per month (around 25-50 British pounds or 40-80 US dollars).000.000 dabbawalas.000 or 200. Regardless of a dabbawala's function. Several dabbawalas work under one Mukaddam. has also been added to allow for on-line booking. The Mumbai dabbawalas run a very successful business since its inception about a century ago.com.000 deliveries. The executive committee is subordinated by the Mukaddam (supervisors).by an executive committee. all with an extremely small nominal fee and with utmost punctuality. 6. which looks after the entire business. The success of the system depends on teamwork and time management that would be the envy of a modern . with the barefoot delivery men as the prime movers.CONCLUSION: Although the service remains essentially low-tech. An on-line poll on the web site ensures that customer feedback is given pride of place. According to a recent survey.000 lunches get moved every day by an estimated 4.
manager. Owing to the tremendous publicity. a wooden crate for the tiffins. A simple colour coding system doubles as an ID system for the destination and recipient. The local dabbawalas at the receiving and the sending ends are known to the customers personally. The service is uninterrupted even on the days of extreme weather. and Prince Charles. and the white trademark Gandhi topi (cap). Occasionally. this was usually before the accessibility of instant telecommunications. that there is no system of documentation at all. people communicate between home and work by putting messages inside the boxes. visited them (he had to fit in with their schedule. since their timing was too precise to permit any flexibility). 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. such as Mumbai's characteristic monsoons. There are no multiple elaborate layers of management either — just three layers. they are well accustomed to the local areas they cater to. The return on capital is ensured by monthly division of the earnings of each unit. in the shape of two bicycles. The BBC has produced a documentary on dabbawalas. Each dabbawala is also required to contribute a minimum capital in kind. white cotton kurta-pyjamas. which allows them to access any destination with ease. Most remarkably in the eyes of many . during his visit to India. Also. some of the dabbawalas were invited to give guest lectures in top business schools of India. However. which is very unusual. so that there is no question of lack of trust.
The Guardian. Peter Meindl and D.org Hart. London). The semiliterate dabbawalas have shown us an exemplary example of how efficient a supply chain can be. Supply chain management – Sunil Chopra. the Mumbai dabbawala is also a house of employment. 2. "The Mumbai working lunch".com – official website of the Mumbai dabbawalas. The success story of the Mumbai dabbawalas is sung worldwide. www. The Independent Online (The Independent group. www. they have become a symbol. . REFERENCE: 1. 7. 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. Kalra.mydabbawala. the success of the dabbawala trade has involved no Western modern high technology. Harding. 3.wikipedia. success and discipline. 5.V. Generating employment to an estimated 5000 Mumbaikars. The Mumbai dabbawala can now be thought of as a landmark of efficiency. Luke (2002-06-24). 4. Jeremy (2006-03-19).Westerners. an identity of India at the very first glance. "A Bombay lunchbox".
This action might not be possible to undo. Are you sure you want to continue?