Case Study on Mumbai Dabbawala

Case study on Mumbai Dabbawala

Summary:

A concept that started in the colonial period of British India over a century ago for serving British officers becomes India's economic capital Mumbai's most preferred service to get food from home for lunch without carrying lunch boxes during travelling to offices in the morning rush hour. The service is currently spread across the city of Mumbai, The service costs the consumers USD 10 per month, The subscription to the service continues to grow at 5 to 10 percent annually.

Overview:

The concept of the "Dabbawala (box carriers)" originated when India was under British rule. Many British people who came to India 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. The service began in 1890 with around 35 Dabbahwalas for catering to British officials. Today the organization has grown over to a team size of 4,500 to 5,000 people.

However many factors lead to the expansion of this service. Some notable factors worth mentioning are the expansion of the city as a center of economic activity for India, the inconvenience on part of office going people to carry lunch boxes in the morning rush hour, the convenience of having home food without spending in local café and successful and operationally sound legacy.

Value proposition of the business model innovation:

Customer Value Proposition:

• Scale of operations: More than 175,000 or 200,000 lunch boxes get moved every day by an estimated 4,500 to 5,000 Dabbawalas

• Low cost of service for the consumers: subscriber of the service pay approximately USD 10 per month for availing the service

• Almost No Error in Delivery: There is a probability of only one delivery will go to a wrong destination in every 6,000,000 deliveries.

Distribution Channel:

• Codified tagging of each lunch Box: Each lunchbox is marked with a set of numbers and colours to denote where it should go

• Absolutely smooth delivery: From the customer's house to his office, the Dabba (lunch box) will be handled by at least three different delivery men and sometime the number of men involved in delivery can go up to twelve men, depending on which place it has been picked up and to which part of the city it has to be dropped

Cost Structure:

• Absence of major technological applications: The service does