Mumbai’s Dabbawala & Six Sigma

Mumbai’s 5000 plus Dabbawalas are world famous for their impeccable service standards. They pick up lunch boxes/ tiffin carriers from over 2,00,000 homes/ apartments, deliver them to some 80,000 destinations and again ensure their safe return to those homes/ apartments – all on the same day with each lap of journey en route accomplished within the specified time limits. The people at work are not from any high academic background; rather many of them are almost illiterate. They face the same crowded pavements, on-road dense vehicular traffic and overloaded suburban trains, which normal office goers often give excuses for their late comings.  

Their way of doing business has, therefore, become a case study destination for every management guru and B-school. CII arranged interface for who’s who of industry and business to share great management lessons from them. A Dabbawala figured among a handful few from India who got invitations to witness the marriage ceremony of Prince Charles. Sometime back, there was also an All-Dabbawala ‘Deal Ya No Deal’ show in Sony Entertainment TV. They steal all attention just because their service is of Six Sigma quality.

Every business concern is made of a number of interrelated processes. When inputs are made to traverse through a process, they result into certain outputs (products & services) serving either internal or external customers. A process is termed as industrial or commercial depending on whether 80% or more of the values derived are from machinery or from human activity, respectively.  

No matter how perfect a process is, no product/ service will come conforming to exact targeted specifications. It would always vary. However, when it varies within certain Lower Specification Limit (LSL) and Upper Specification Limit (USL) as acceptable/ agreed to or specified by the customers, then it is considered to be defect free or quality product/ service.

Further, every opportunity of delivering a product/ service is also wrought with an opportunity for the occurrence of defect. When the Defects Per Million Opportunity (DPMO) doesn’t exceed 3.4, the process is said to have met Six Sigma level. And Mumbai Dabbawalas’ DPMO is less than 3.4 or precisely, it is 2!

‘Sigma (r)’ denotes ‘Standard deviation’ – a statistical measure of dispersion/ variance. It is the positive square root of the arithmetic mean of the squares of deviations of given observations from their arithmetic mean.

Say, it is a midsummer and your organisation wants to hold a three-hour business plan meet of your 100 sales persons. You look for a conference hall with right facilities and ambience, especially the room temperature which should be maintained throughout at 22!1⁰ C. And two hotels in the city also promised the same. When measured at every half an-hour interval in the one where you held your meet, it read as 18, 28, 30, 24, 20 and 18; the arithmetic mean value and ‘r’ being 23 and 4.7, respectively.

Whereas, had you gone to the other hotel, other things remaining same, the observed values of the room temperature would have been say, 23, 22, 24, 22, 23 & 24. Although the mean was the same 23, the ‘r’ being less at 0.8, the service of the second hotel was more qualitative and would have given you more satisfaction. Hence the saying, ‘Company may celebrate mean but customers are bothered by the variance’.

However, its process was still not conforming to Six Sigma level. With two observed values out of six not meeting the customer expectations (22!1⁰ C), the DPMO worked out to 333,333.33 (i.e., 2/6 multiplied by 1,000,000), which was hugely far from the required 3.4!

Benefits of higher Sigma level*

Sigma Level	DPMO	Cost of quality
2	308,537	Not applicable
3	66,807	25-40% of sales
4	6,210 (Industry Average)	15-25% of sales
5	233	5-15% of sales
6	3.4 (World class)	< 1% of sales

*Source: ‘SIX SIGMA - The Breakthrough Management Strategy’ by Mikel Harry & R Schroeder.

The figures in third column indicate that if, for example, you purchase a product at Rs.10,000/- from a company operating at 4 Sigma Level, you are being made to pay about Rs.1500-2500/- (i.e., 15-25% of sale price) towards the cost of inefficient processes deployed by the company to manufacture the item. Putting it in other way, the company concerned can reduce the price of the product by Rs.1500-2500/- if it fixes its faulty processes or improves/ recreates the processes. This measure would also help the company to increase its market share tremendously.

Past definition of Quality

·         Conformance to standards irrespective of how they were met. Lot many hidden costs used to get factored into the cost of the product/ service.  

·         High quality could be only at a high cost.

·         Accordingly, it was difficult to gain more market share since price could not be reduced without hitting the bottomline.

Present definition of Quality

Conformance to standards by continuous recreation of internal processes. This eliminates the need to observe after production quality control and cost of rework associated, repair/ replacement of defective parts/ products, after sales warranty service, etc. This ultimately reduces cost. The slogan now is ‘Being better is cheaper’. In other words, a quality product or service need not necessarily be a costly one.

Why China made toffees, instant foods, stationery articles, aesthetic and art/ feng shui objects, electronic toys, gift, decorative, utility items, etc., have flooded the world market? Are we all purchasing them just because they are cheap? Our Diwali has become whose Diwali anyway? When do we wake up to the reality?  

Says W Edwards Deming; “Eighty-five percent of the reasons for failure to meet customer expectations are related to deficiencies in systems and processes ... rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”

I have a Maruti 800 of 1992 make. First time when I had a punctured tyre, I went to a wayside repair shop. A boy fixed it. After a few months, I observed that the tread on the said tyre was getting unevenly worn off. I took the car to a wheel alignment shop. The man on the job reset a nut that was wrongly set with its groove-side out. To put an end to this sort of problem for good, subsequent models came with the flat side of this category of nuts permanently blocked.

So, companies be alert! If you wish to achieve the efficiency of Mumbai’s Dabbawalas, ‘Don’t fix your employees for any deficiency in their performance standards in meeting customer expectations, rather take their help to identify the faults in your systems and procedures and fix them.’