From Trailblazer to Industry Leader
This expression sums up the business of the Yamato Group. Having created a service that nobody had even thought of, a new market sprung up. The company then further honed its service to ensure that it remained the best among many competitors.
Masao Ogura, then president of Yamato Transport Co., Ltd. "invented" the Kuroneko Yamato door-to-door delivery service in 1976, and he symbolizes this spirit. A door-to-door individual parcel delivery service with a network covering the entire country was considered to require too much infrastructure investment and effort to be viable for a private enterprise. The decision by Mr. Ogura truly created a unique trailblazing "Blue Ocean" product called TA-Q-BIN. Later, various other companies followed suit and the market for door-to-door parcel delivery services was formed.
Today, this market moves about 3.2 billion parcels a year, with the Yamato Group's TA-Q-BIN handling about 1.3 billion of these, giving our product a leading market share of 42 percent (*). The total number works out to 10 parcels per year sent for every inhabitant of Japan. Door-to-door parcel delivery has truly become an indispensable part of daily life.
However, the "from trailblazer to industry leader" spirit already defined the company in prewar times and was embodied by its founder, Yasuomi Ogura. In order to open up new territory, one must think about the customer's latent needs even more deeply than the customer himself, and then turn the concept into tangible reality. Subsequently, in order to be a leader, the customer oriented service must continue to evolve and develop, staying ahead of rivals in the field.
The entire Yamato strategy evolves from a single tenet: "everything for the customer." The history of the Yamato Group, now poised to expand its network to the world and to corporate logistics, starts out from this point, Keiji Aritomi, Advisor of Yamato Holdings tells us.
* Source: FY 2010 survey of number of handled home delivery parcels, conducted by Ministry of Land, Infrastructure, Transport and Tourism
Masao Ogura, the "inventor" of TA-Q-BIN
The founder of Yamato Transport, Yasuomi Ogura (far right) in front of a truck
Advertisement for the courier route service that was the cash cow of Yamato Transport (1929)
In 1976, Kuroneko Yamato TA-Q-BIN is born.
The Yamato Group has always aimed to be a trailblazer, creating firsts for Japan, and has maintained its position as a leader in the industry. Being a trailblazer means creating useful services for customers that simply did not exist before. Being a leader means growing and expanding these services to reach a maximum number of customers. In other words, "from trailblazer to industry leader" is nothing other than the realization of the basic Yamato strategy "everything for the customer."
In keeping with this management philosophy, Masao Ogura, then president of the company, "invented" the Kuroneko Yamato TA-Q-BIN service in 1976. Until that point, the only way for an individual to send a parcel to another person was through the postal service. For the first time, a private enterprise entered the field of small-lot parcel delivery. After three years, the operation went into the black, eventually surpassing the postal parcel volume in the mid-1980s, and prompting many other transport companies to enter the field. The "personal courier" market was born.
In fiscal 2010, this market handled about 3.2 billion parcels. The Yamato TA-Q-BIN service has a share of about 1.3 billion parcels or roughly 42 percent (* see above), making us the leader in the Japanese market. A staff of about 55,000 sales drivers and a fleet of about 45,000 trucks covers every corner of Japan, and we have created a framework that enables us to pick up a parcel anywhere within 15 minutes.
The Yamato Group has been an innovator aiming to become a leader since its very beginnings. In 1919, Yasuomi Ogura, who had just turned 30, formed a company that he called Yamato Transport. In an age when there were only 204 trucks in all of Japan, he acquired 4 of these to start his business. It was certainly a bold and forward-looking investment.
In 1929, he started to operate a regular transport route between Tokyo and Yokohama. This was named the "Yamato Courier" and it was the first such regular service in Japan. Until then, practically all long-distance transport was done by rail. Moving goods over medium or long distances by road and offering a regular route service by a truck operator was a ground-breaking decision. Yasuomi Ogura succeeded in this endeavor, and Yamato Transport became the biggest trucking company in prewar Japan.
Whether Yasuomi or Masao Ogura, why is it that the top management of Yamato Transport always strives to innovate and lead the industry - and achieves exactly that? The answer probably lies in the fact that they see the business of transport as being for the benefit of the world and of society. Transporting goods is a necessary part of the social infrastructure, and by definition, infrastructure should be universal, something that everybody has access to.
Furthermore, if providing infrastructure as a business, innovation, that is the ability to create a unique service, is necessary in order to survive. The infrastructure business requires a company to be a trailblazer and a leader. However, to benefit the world and society and still be a viable business requires considerable ingenuity. Even if one initially provides a service, any long-term benefit will be lost unless the company continues to exist and to thrive. For Yamato Transport, the road has not always been always smooth, and achieving and maintaining the company's status as an innovator and leader has by no means been easy.
Yamato Transport's Management Crisis Before the Birth of TA-Q-BIN
Not too long before the TA-Q-BIN service was born, Yamato Transport went through a difficult period. The "Yamato Courier" service was started before the war to carry a variety of small parcels along a predetermined route. This innovative idea created a market, and the company became the market leader.
But as the market matured, various problems surfaced. Field sales staff concentrated on getting easy orders that would increase turnover, but as a result, profitability suffered. Yamato Transport had developed a pool of retail customers for the courier route business, and increased profit margins by collecting individual items along the way. The individual parcel business has a higher profit margin than the large-scale hauling of goods, where competition is intense and discounts are always necessary, but handling orders and collecting parcels is very time-consuming.
Consequently, there was a gradual shift towards taking the trucks to the factories of big companies, loading large consignments, and transporting these directly, as in a chartered arrangement. In terms of time and effort required to get the business, large-scale hauling is certainly easier than individual parcel runs. Turnover can be increased, but there are many downsides in terms of profitability. When sales people in the field try to increase turnover by giving preference to large-scale orders it results in a drop in revenue, because fewer small-lot individual parcels are handled.
It is not easy to break that vicious circle. In order to get sales staff to concentrate on profit margins, management issued orders that there should be no more than five parcels per order sheet, in other words that goods for large-scale customers would not be transported. However, this policy also created some confusion. After stumbling, it can be difficult to regain one's footing. The profitability of Yamato Transport which was achieved through the regular route concept suffered severely through that very operation as its returns dwindled. This happened in the early 1970s.
Concentrating on Small Lots Leads to the Creation of TA-Q-BIN
Until that point, Yamato Transport derived high earnings from its small-lot courier route operation, making it at one point the largest trucking company in Japan. But going for easier large-lot orders led to a drop in revenue. It became clear that halfhearted measures would not be enough to remedy this situation.
It was Masao Ogura who then came up with the concept of going back to basics by focusing on small-lot individual parcel delivery. Yamato Transport created a completely new logistics service geared not only to businesses, but offering true convenience to private customers, taking the needs both of the sender and the recipient fully into consideration, with a country-wide network and with more flexibility than the postal service.
Large-lot corporate contracts were gradually phased out until there was no turning back, and the new business known as "Kuroneko Yamato TA-Q-BIN" was started in 1976 under the guidance of its creator. For the sender, the advantages included an easy to grasp price structure and the assurance that even a single parcel would be picked up and swiftly delivered the next day. For the recipient, the high level of service with assured delivery to the doorstep was a huge advantage. In terms of company management, TA-Q-BIN was designed to bring about a marked increase in profit ratio once the break-even point was passed, by concentrating on handling a high volume of highly profitable individual parcels.
However, building up such a service from scratch was no mean feat, both for staff members in the field and for management. But as it turned out, the ability to easily and quickly send any type of small parcel to any destination uncovered latent needs beyond expectations. The Kuroneko Yamato TA-Q-BIN service with its black cat logo became a smash hit that gave rise to a whole new market. Rival companies rushed to enter the field and began their own services, using other animals as logo symbols, which is why the intense competition for market share at the time became known as "the animal war."
The success of TA-Q-BIN revitalized Yamato Transport and lifted the company out of its difficult phase. Subsequently, new services centered around the TA-Q-BIN concept were developed, both through input from staff in the field and from management.