Here Comes The Milkman
How an age-old delivery model can prove transformational in solving the problem of the last mile
If you grew up in India, as I did, chances are you would have definitely witnessed the early morning milk delivery ritual.
I clearly remember how the milkman would come to our house at 6 am every day on his bicycle with bottles of milk that he would leave at our doorstep, and collect the empty ones left there from the previous day.
Little did I realise that what seemed like such a mundane, everyday activity had the power to become a potential solution for the delivery of essential products in the last mile.
My team and I were recently delivering a workshop and one of the participants was an organisation from Kenya called Hewatele. Hewatele works towards addressing the problem of limited oxygen supply in hospitals across Kenya.
The Founder, Dr. Bernard Olayo, was inspired to work on the problem of oxygen shortage after his experience of working as a young government doctor in west Kenya where he witnessed children dying from pneumonia, not because the doctors didn’t know what to do but because the hospitals didn’t have enough oxygen supply.
Bernard shared an alarming statistic to highlight the severity of the problem.
“If 100 children are being treated for pneumonia in a facility, with full treatment all 100 can be saved. But without oxygen, 40 of them will die.”
He stated that the main reason for the unavailability of oxygen in a majority of hospitals across Kenya was that large oxygen producers typically favoured large, centralised facilities in capital cities. This made access to oxygen challenging and exorbitantly expensive, especially for health centres that were located hundreds of kilometres away in the smaller and more remote towns and villages.
But was the answer then to ensure that every hospital has its own oxygen plant?
As a trial, he placed very small oxygen plants in 14 health facilities. After just 20 months, all of them had stopped working as the hospitals had tried to repair the equipment themselves and failed.
Armed with this knowledge, Bernard decided to set up a hub and spoke model where Hewatele would build, own and operate the oxygen plants, but in localized sites where it would be logistically easier to serve hospitals with a 100km radius. Bringing the plants closer to the hospitals would reduce costs due to shorter distribution distances and make it easier to cater to the demand from the hospitals within the fixed radius.
For the purpose of delivering the oxygen to the hospitals, he bought oxygen cylinders and delivery trucks and put together teams who were responsible for assessing the needs of the hospitals within their delivery radius.
Every day the trucks would leave on their fixed runs and make stops at the hospitals on their routes to deliver new oxygen cylinders and pick the empty ones.
It was a rehash of the milkman distribution model, adapted to the local context!
And it was a resounding success as it enabled hospitals to get access to life-saving oxygen, not only with a steady frequency but right at their doorsteps, all within a 2-hour delivery timeline. Something absolutely unheard of before!
Moreover, it proved to be highly cost-efficient, allowing Hewatele to undercut its competitor’s price by 30% in a market where oxygen costs 10 times what it does in the U.K.
The milkman model has the potential for replication globally. Basically anywhere in the developing world where infrastructure is weak and financing is poor. It has applications across multiple sectors and can prove transformational when we think of how essential products can reach the last mile.
So, what are the key elements of the milkman model and what does a social enterprise need to know when thinking of adopting this model to solve the problem of the last mile?
Here are a few pointers:
Take existing technology and make it operational- There is no need to reinvent the wheel. Use technology that exists but think of how it can reach people living in remote areas. The focus is not on the product but on how to make it accessible and affordable
Bring production closer to where it is needed- Localize production such that the product is manufactured closer to where it is needed. This will make it easier to assess and cater to local demand and reduce distribution costs that will translate into higher affordability for the customers
Pick the location of the production hub carefully-While the production is localized, the location of the hub is critical to ensure there is enough demand to cater to within a set radius else it would negatively impact the economic efficiencies of the model
Set up a planned delivery system- Control and plan the delivery by owning the process. Form a team that assesses the needs of the customers and sets up delivery schedules based on what, when and how much is needed. Standardizing delivery helps to optimize for time and costs and ensures a regular supply of the products to the customers
Use local resources and insights - The beauty of the model lies in how it gets adapted to the local context, using local resources based on local insights. Develop an in-depth understanding of the local conditions, challenges and needs to successfully adapt and operate the model on the ground
Inspired by a conversation with Dr. Bernard Olayo, Founder of Hewatele. Hewatele means ‘plentiful air’ in Swahili, an apt name for an organisation focused on improving the availability and affordability of life-saving oxygen in Kenya. Founded in 2014, Hewatele produces and distributes oxygen to healthcare facilities in Kenya that cater to underserved communities. They have 3 large plants that deliver oxygen to more than 200 hospitals and have touched 8 million lives in the last 6 years. They currently serve 10% of the Kenyan market and aim to take it up to 40% in the next 5 years.
