Dabbawallahs of Mumbai (A)

Case Analysis

Group-4

Ananya Verma 1901184 | Aniket Dubey 1901010 | Ashima Tirkey 1901071 |

Sonal Singh 1901169

How does a service supply chain differ from a manufacturing supply chain? Do you
need different set of measures to assess the effectiveness of a services supply chain?

Supply chain design, particularly in the manufacturing sector, necessitates a strong emphasis
on physical product and a larger supplier base. On the other hand, service companies
generally require little other than office supplies for physical supplies and often work with
much smaller suppliers.

 The main difference is that most of the production costs are related to procurement,
transportation and handling of physical material, while almost all manufacturing
services are devoted to information manipulation and the creation of relationships.
Due to this difference, the investment of capital in machinery and equipment in the
manufacturing industry is typically far higher.
 Traditional manufacturing supply chain management is concerned with logistics, or
the movement of physical materials from one location to another. The size and weight
of the objects being delivered, as well as the distance between the supplier and the
manufacturing plant, may have a significant impact on the product's cost.
 The service industry upgrades servers and introduces new software to accelerate the
flow of communication, while the manufacturing industry aims to negotiate better
shipping rates and fill containers with product to minimize unit cost, thereby reducing
the labor costs necessary to produce a finished product.
 A finished good is a commodity that has been fully converted from a raw material
form to a form that is ready to sell to the consumer, according to traditional
 definitions. A finished good is the same as a closed file in the services supply chain.
The loan has been approved, the home sale has closed, or the class has ended, leaving
just a few sheets of paper as proof.

The measures to assess the efficiency of service supply chain are by and large similar to that
of manufacturing supply chain.

 Service Quality – Service quality is focused on the service's customer. The consumer
can be a company or a person, and it does not have to be the end customer; instead, it
can be a customer within the supply chain, or an internal customer. Quality is a sub-
measure of the supply chain performance measure "conformance," which includes
conformance quality, quality reliability, and customer satisfaction.
 Cost – Cost is inextricably linked to the performance indicator price. In the
development, maturity, and saturation stages of the product life cycle, price is
becoming an increasingly important order-winning criterion.
 Flexibility – There are four types of system flexibility where each type can be
measured in terms of range and response: volume flexibility (the ability to change the
output level of services offered), delivery flexibility (the ability to change planned
delivery dates), mix flexibility (the ability to change the variety of services offered)
and new product flexibility (the ability to introduce and offer new services.

What are the economics of the Dabbawallah meal distribution network? Is it a

sustainable and a scalable business model?

Economics of the Dabbawallah meal distribution network

Regardless of job, each dabbawala is paid about 8,000 rupees per month. Harvard Business
Review considered it to be as reliable as a six-sigma standard in 2005. This means for
every six million deliveries, the dabbawalas make less than one mistake. 4,500 to 5,000
dabbawalas transport between 175,000 and 200,000 lunch boxes, all for a very small fee
and with extreme punctuality. Tiffin-wallahs work for themselves. The membership fee for
the union is 30,000 rupees, which includes a 5,000-rupee monthly salary and a lifetime
career. The monthly fee of 150 rupees covers distribution six days a week.
Business model

Every day, 5,000 Dabbawalas in Mumbai offer home-cooked food to more than 400,000
customers. Customers who work in offices or schools receive the food in cylindrical
lunchboxes. Customers are served by the Dabbawalas using local trains, bicycles, and hand
carts. The company's organisational structure is flat, with a controlling body, team managers,
and deliverymen. Each employee is a shareholder in the company and receives a
proportionate share of the profits. Between the hours of 7 a.m. and 9 a.m., lunch boxes are
collected from homes and delivered to the nearest railway station.
This dabbawala business model is scalable because they can track delivery timeliness and
errors. It is also long-term since it is the railway system that generates demand in the first
place. Carrying dabbas is difficult on crowded trains, and office workers seldom eat out
due to the high cost, a preference for home-cooked food, and the low quality of the few
office cafeterias that exist. As a result, office workers prepare their lunches at home and
have them delivered by dabbawalas after the morning rush hours.

What is your assessment of the future of Dabbawallahs? Do you have any suggestions
for Raghunath Medge?

Due to the Corona Virus outbreak all around the world, Dabbawallahs had faced a lot of
problems, thus resulting in an uncertain future.

 The service is completely dependent on suburban trains. They cannot operate if the
local trains are not operational.
 There is also uncertainty about customers' response. "In most buildings in the city,
housing societies have banned the entry of even relatives. 
 Unemployed and broke, many dabbawalas left for their hometowns in western
Maharashtra when it became clear that the lockdown imposed for 21 days on March
24 will get extended for an indefinite period. Now, due to the second wave of
COVID-19, the situation is coming back to square one.
  Currently, around 5,000-odd dabbawalas ferry over 200,000 dabbas daily. They earn
quite a meagre salary of Rs 8,000 per month. Most of them reside in slums, which are
the hotbeds of COVID-19.
 As many of the offices has adapted the work from home culture at least for 3 days a
week and going forward, it will be the new normal. This will directly affect the
demand of Dabbawallah as there will be no need of delivering food to workers from
their own houses.

Suggestion to Medge

Considering the above issues resulting in the uncertain future, Medge should focus on people
who are migrants and staying away from their homes for work or studies and are not able to
cook their own food but willing to consume home cooked food. Dabbawallah’s can
collaborate with household ladies who want to make earnings by selling homecooked fresh
food and deliver it to various location as per their business model.