One of the best case studies when it comes to running a successful process-driven error-free, low-investment and high-profit making business from India, is the well-known Six Sigma-certified Mumbai Dabbawala Association. SOLVING TWO INDIAN CHALLENGES:
So with its ability to solve these two real-world problems, the Dabbawala Association has been in business for over last 125 years. It has a team of around 5,000 people, most of whom are skilled labourers who work round the clock using various modes of transport, trains, cycles, hand-pulled carts, huge carriers over the top of their head– you name it, they have it. Many of them cannot read or write, or don’t use any form of fancy technology or computers, yet, they are better performers than the most of the folks you see working for any startup. This has been continuing for ages now. In 1998, Forbes Magazine recognized its reliability to match the Six Sigma standard. This means that the dabbawalas make less than 1 mistake in every 6 million deliveries.
A very driven business with all the fundamentals required for a successful startup is evident in each and every employee of the Dabbawala Association. If you really look at it from the cultural aspect, they all are founders and stakeholders who give more than 100 percent each time they are out there doing their job. Come hell or highwater, your dabbawaala will never fail you– be it the heavy rains during monsoon, or shutdown of various forms of transport on a lot of days, or any kind of traffic jam– nothing stops these folks from doing their job. They know every nook and corner of each street they have to go to and are ,more often than not ,accurate and timely in their deliveries. They have a very insighftul coding system on the lunchboxes based on the delivery area and most of the work is done on paper, without the use of any kind of technology– except the association’s recent service of enabling booking via SMS. This is indicative of how it’s adapting to change and scaling the business.
So what are the learnings startups can take from this amazing feat of solving real-world problems without any hiccups? I liken it to the Lean Six Sigma approach that counts for everything. The challenges they face are real and startups– or any business for that matter– certainly can take home a lot of learnings. I’d like to focus on a few of those aspects taking a cue from this brilliant institution.
1.OWNERSHIP : Ownership is a feeling that an employee has to instill in oneself, and unless you get that feeling of ownership you cannot work excellently," Pawan Agarwal, CEO of Dabbawala Association, said during one of his speeches at the E-Summit 2012 in IIT Delhi. Yes, driving this is an important aspect when it comes to startups. Building that culture is an integral part of making your startup successful. Very few people today aspire to become linchpins within organizations they work for. If your startup is driving that culture, appreciating the hard work, and giving the employees and stakeholders to nurture ownership of any kind, you would actually see the efficiency increase manifolds immediately.
2. SIMPLICITY : The people of Mumbai say with confidence:
“Our lunch can go wrong but not the Mumbai dabbawalas.”
Why is that possible? It all boils down to keeping things simple. Be it a Steve Jobs or Picasso, all the great artists always had a penchant for simplicity. The dabbawalas maintain that value and drive great efficiency at keeping their basics simple. The process is very lean, very uncomplicated, and doesn’t involve any form of algorithms or flowcharts or complicated SOPs and process charts or reports. The best innovations world over are the simplest.
3.STANDARDIZATION : Yes, the Dabbawala Association is also ISO 9001:2000-certified. In fact, take a look at the simple colour coding system which acts as an identification system for the destination and recipient. It uses hardly any complicated documentation. All their documentation is on the books which are maintained for years, and the pricing structure is standard– no matter from what location to what location the delivery has to be made.
4.BUILD, MEASURE, LEARN: Understanding the need to keep pace with the fast-changing world around us and the use of mobile technology in the city and globally, the Dabbawala Association recently started to embrace technology and now allow for delivery through SMS. According to the organization, it sees a growth rate of between 5 and 10 percent every year.
5.BUILD SERVICES AROUND YOUR OWN INFRASTRUCTURE : Dabbawalas use a combination of various transport modes, especially very efficient and low cost ones. Trains, cycles, and handcarts contribute to maintaining reliable, efficient, and accurate delivery timelines.
6.AS LEAN AS IT GETS: If you consider the dabawallas, their invesment is bare minimum– two bicycles, a wooden crate for the tiffins, white cotton kurta pyjamas, and the trademark white Gandhi cap, or topi as it’s called. The returns on capital are based on the monthly division of earnings of each unit. And it also works on standardization as far as you look at it. They charge around 450 rupees (US$7.95) per month per customer and they acquire scalability in form of gaining more traction and customers as they go. When you look at this enterprise, certainly there’s a lot more that everyone can learn from, but one most important aspect and one that cannot be ignored no matter which business your startup is– customer is king! In fact, dabbawalas go a step further. They regard their customer as their Lord Vitthala. Now that’s something that says a lot about what they stand for, doesn’t it?
7.DISCIPLINE Dabbawalas are extremely disciplined professionals.Maintaining accuracy in every 2,60,000 transactions/per day is not an easy task and there is no place for indiscipline. For a Dabbawala “ERROR IS EQUAL TO HORROR”, and they have maintained 100% track record of on-time delivery. Mistakes are extremely rare. +++
8. BARGAINING POWER OF BUYERS :
The delivery rates of the dabbawallas are so nominal (about Rs 300 per month) that one simply wouldn’t bargain any further.Also, their current monopoly negates any scope of bargaining on the part of their customers. Thus, we encounter a perfect win-win combination for the customers as well as the dabbawallas.
9.NO THREAT OF NEW PRODUCT/SUSTITUTE:
As substitutes to home cooked food are not seen as a viable alternative in the Indian scenario, the threat to the dabbawalla service is not an issue at least in the foreseeable future. This gives them a leeway to probably expand their already existing network into newer cities as demand increases in these places as well. So, will these people next target the other metros in India? Only time will tell.
10.TIME MANAGEMENT AND ACCURACY :
Maybe all our brand toting management graduates should be made to do a field internship with the hard working, faultless and efficient Dabbawalas for sometime; forsake an international internship jaunt to exotic locales like Poland or Japan to learn the basics of Time Management on our very own Indian soil. Imagine if one of the Dabawalas thought “I am too tired to get up at 5.15 and I will get up at 6.15 am.” Which means 15 customers would go without their daily meal. It is more of a realization that the customer is the Annadataa giving them their lunch and not any other compulsion for work efficiency. Dabbawalas were invited to represent the Republic day march of this year in New Delhi as well as Mumbai. Most of workers in that team is illiterate( or left after primary education) . Each earn at about Rs. 4000 to 5000 per month. Never ignore this team at alll! International Forbes magazine has lauded it with Six Sigma accuracy of 99.99 % precision. In 1998 survey of Forbes shows only one error in 6 millions of their transactions.
Dabbawala’s organization has received ISO 9001 certification in year 2000 for their service to nation. When England Prince Charles visited India, he had spent his daytime observing their work. He had also invited 2 dabbawalas to his wedding Party with Camila Parker. This group of people had wide global fans including virgin King, Richard Branson. So, such a team is globally acclaimed for its time management and accuracy.