Awesome post Saumya! It is the first case we’ve looked at whereby the process flow moves in one direction and then run in reverse just a few hours later. I wonder what kinds of new challenges the ambi-directional nature of the flow presents.
I also thought that the average journey was a bit on the long side- do you think that the average 25 mile journey (50 miles round trip!) of a Dabbawala across one of the world’s most congested cities, is reflective of an optimized distribution system? It seems like an impossibly far distance to travel for such a low margin offering.
It also seems as though the system is optimized around handling variability in delivery location, how about variability in menu offerings? How large is the menu and when do customers place orders? Can people order whatever they want so long as there is another Dabba-maker within the city willing to supply such a Dabba? We saw in the beer-making simulation how partial blindness on consumer demand can put stress on the distribution system. What if tomorrow there were half as many orders as today of fresh paneer tikka, who is responsible for the inventory risk and how do they plan around it?
Thanks BP for a fascinating article on TJs cloak-shrouded foodstuffs business dealings. What’s interesting about there business model is that they seem to have set up as a consumer-facing wholesaler- focusing on a smaller SKU selection, at whole sale pricing and at the same time driving high volume. They’ve also dis-intermediaried the distributor which could pose some interesting inventory risk management challenges. This leaves them more producer surplus to pass on to the consumer. With 11 billion in revenues and at a scale of 450 stores in 41 states, perhaps they have the greenbacks to establish systems that can manage direct-from-the-manufacturer inventory however, I would imagine this may have been incredibly challenging when they were just starting out. I would also have been really interested to see how their merchandising team makes stocking decisions and how those decisions support theirs customer promise.