India Food Distribution Systems – Term Paper

Opportunities

Due to their increased publicity in recent times after having been the subject of a Harvard case study and a visit from Prince Charles, the Dabbawala are in a prime position to take advantage of the opportunities that such publicity brings. For example, they can collaborate with other caterers and food systems to facilitate last mile delivery of packages or parcels. Currently, the MTBSA is in a partnership with KFC India to deliver for last mile delivery of meals to KFC clients. However, this is the only such partnership and the Dabbawalas could collaborate with other food systems or hotels to both increase their client base and profitability.

As noted above, India is host to some of the fastest growing cities in the world. This has resulted in rapid population growth in the urban areas, a situation which has been noted by multinational food giants such as Burger King, McDonalds, and KFC who are rapidly setting up shop in these cities. With the recent concerns about healthy eating, demand for these fast foods is expected to decline while demand for healthier alternatives increases. Home cooked food in these cities is expected to become a much more wallet and health friendly choice for the residents. However, the dabbawalas’ current organizational culture cannot allow expansion to these areas as it would require major shifts in their organizational perspectives.

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Their current low-operational costs and logistics system can be used for the delivery of other parcels other than food. Their service delivery has been certified six-sigma where their error rates are less than one in a million deliveries. This kind of performance is usually very hard to achieve in addition to long term consumer loyalty and trust.  The dabbawala can expand their operations to include packages and parcels that require same day delivery within the metropolis of Mumbai or any other locale. For example, for light packages below 5kg, they can offer same day courier delivery services for a fraction of the price of other courier services. Their business model is suitable in such an instance as it is easily scalable to cover larger areas at reduced costs.

Threats 

One of the major threats to the MTBSA is the presence of competing food systems offering different packages and targeting the younger generation. The dabbawala’s core objective is to deliver home cooked meals from the homes to the offices that assume that the client is already married. It also means that the client has to be living near the city. This is a major failing as the working people then use alternatives such as fast food or street food.  

Office canteens also offer an alternative to home cooked food. The popularity of these canteens stems from the avenues they offer lower level employees to socialize with upper level managerial staff on an informal basis. The prices are also usually subsidized for employees in these canteens.

4.3 Comparison Between MTBSA and McDonalds India Food Distribution Systems

4.3.1 McDonalds India introduction

McDonalds is the world’s leading quick service restaurant with a presence in more than 199 countries and serving more than 50 million customers daily. In India, the McDonalds franchise is a joint venture between two Indians, Amit Jatia, and Vikram Bakshi. Amit Jatia, who is also the managing director of Hardcastle Pvt. Limited, manages McDonald’s operations in the west and South of India, while Vikram Bakshi, owner of Connaught Plaza Restaurants Private Limited, runs the franchise’s operations in North and East India (Mishraand et al., 2013). Having been in the country for over a decade, the fast-food giant now has a network of over 160 restaurants over the country.

On the global arena, McDonalds has gained its reputation for speed of operations, quality of products, and an efficient and technologically advanced supply chain. The main reason for the brand’s success on the Indian sub-continent is their localization policies. They have a think global and act local strategy whereby they bring customized the market offering to new markets based on the economic, cultural, and sociopolitical factors in a particular locale (Vignali et al., 2001). This allows them to adjust their products and services to suit the preferences of their targeted local consumers. This strategy also allows some flexibility in the global branches advertisement tools, atmosphere, and architecture. Additionally, their franchise model provides a platform for business opportunities for entrepreneurs in emerging markets where McDonalds has a presence. It also creates additional employment opportunities, which aids in creating a friendly local corporate environment. The good image, coupled with aggressive marketing tactics to multiple types of media quickly made the brand into a household name with restaurants in numerous locations across the continent.

The localized menus have seen them gain countrywide acceptance as they feature no beef or pork products rather substituting them with chicken products. Compared to their traditional market of young children visiting the restaurants with their parents, McDonalds decided to focus on a different market in India, which is mainly made up of 19 – 30 year olds who work in the cities and have no children (Menon et al., 2016). This means that McDonalds India promotions marketing its products as meals have worked hence representing a threat to the dabbawalas. Since the dabbawalas rely on consumers living near and working in the city for their business, if potential clients continue migrating en-masse to other food options, then the dabbawalas could face a situation where their organizational revenues would eventually decrease over time. Therefore, a study of McDonald’s supply chain and their technology adoption will highlight possible remedies for the dabbawala’s situation.  

4.3.2 McDonald’s Supply Chain and Technology Adoption

Since it has to source its products from many suppliers and have them redistributed to their restaurants, they need an efficient and reliable supply chain. A surprising fact about their supply chain in India is that five people manage the whole distribution network across the country. When including the quality assurance department, the figure rises to eight employees. Unlike the dabbawala’s, McDonald’s supply chain is lean with no backups as it is 100% outsourced (Matani et al., 2015). Credit for this increased efficiency goes to pre-planning where company executives performed extensive market research where they evaluated the present logistics industry, the transport sector and resource availability.

For the dabbawalas to perform efficiently, they usually work the same lines for at least six months to get a mental map of the delivery process and locations. Good memory has also been cited as one of the factors considered when electing a dabbawala as a mukadam since it is essential for smooth coordination between various train stations. While the dabbawalas rely on memory, McDonalds lean distribution infrastructure relies heavily on technology especially software to automate some tasks. McDonalds suppliers use the SAP software package while their distribution centers utilize RAMCO Marshal ERP with Cobra (Rowley et al., 2016). This software automates the uploading of store orders while in the daily store operations, they have also developed other technologies for functions such as staff scheduling, track sales, and forecast demand for McDonalds products. Such statistics are very useful when deciding on the future growth of the organization.

McDonalds is also a good example of how technology can be used to enhance sales and consumer perception of a brand. For example, in some of its stores, McDonalds has some kiosks that allow incoming clients to order customized sandwiches while mobile apps help in remotely placing orders or paying for the same. Over the years, especially in India, McDonalds has worked to change the corporate image from ‘fast food’ to ‘good food fast.’ The technology adoption allows the company to personalize the experience to each customer rather than treating everyone as part of the masses.

4.4 Recommendations for MTBSA

The previous part conducted a SWOT analysis on the MTBSA that evaluated its strengths, weaknesses, opportunities, and threats thus giving an accurate overview of the dabbawala’s competitiveness based on both internal and external factors. A SWOT analysis helps organizations to assess the issues both within and outside the organization thus providing an outline for strategic decision-making. The analysis also compared it to one of their main competitors, McDonalds India to determine some practices that may help in alleviating the dabbawalas’ uncertain future. This part will briefly review the challenges facing the dabbawalas and then provide recommendations based on the previous analysis.