Saturday, December 31, 2011

No. 17: Secret of the continued success of Yamato Transport (January 1, 2012)

Yamato Transport is the pioneer and all-time leader of the home delivery business in Japan with a share of 42.0%. When you look into Yamato’s activities, you will learn that constant and strenuous efforts alone to develop and expand the market allow a company to maintain the market leader position. Yamato started the home delivery service in 1976 and delivered 1.7 million packages in the same year, and it is supposedly to have delivered 1,400 million packages in 2011. 

After the March 11 disaster, Yamato established a system to save 10 yen from each package for a subsidy to purchase equipment and instruments necessary for fish processing in the devastated area. The company contributed more than 13 billion yen. Although it is clear that it will result in net loss in the current business year, it gave the highest priority to the reconstruction of the local industry. In another prefecture, it introduced an even faster delivery system in alliance with a local supermarket chain. An order the supermarket chain receives from a customer by 4:00 p.m. through its website is delivered to the customer the next day wherever he lives inside the prefecture. 

Yamato places the highest importance on listening to the opinions in the field. A total 55,000 deliverymen and staff members in the operation centers create ideas for new service under the company concept, “We not only deliver packages but also create customer satisfaction.” In another prefecture, Yamato established a system to receive malfunctioning home appliances, fix them, and return them to the customers in just three days in the fastest case. The company is developing repairmen to shorten the delivery time and reduce repair cost. This business now handles more than 10,000 home appliances per month.

Yamato is also energetically expanding the business overseas. Unlike western home delivery companies that entrust local partners with details of local operations, Yamato instills the Yamato way into the mindset of local people. A Chinese deliveryman cannot understand why he has to say “Thank you” to the recipient to whom he delivers a package. However, these kinds of people are now reportedly willing to say, “Thank you!” to the recipients.

The development of the home delivery business goes hand-in-hand with the development of information technology. Yamato never loosens it hold on applying IT to the business development. In Tokyo, it now can deliver an order to a customer inside Tokyo in just four hours in the fastest case thanks to its self-developed See-T Navi. The system enables a customer to take delivery of an order that he places midnight through TV mail-order program early next morning. The company is on the way to expand this system in other metropolitan areas.

The Yamato case tells us how important it is to make constant and strenuous efforts to segmentalize the market and create and develop customers in the well-established business domain.

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