I would like to publish my lastest report based on Yamato: Ta-Q-Bin case study from National University of Singapore in my QBS Global logistic class.
*This report comes from my opinion and research only.
Case #2: “Yamato Transport Co. Ltd.: TA-Q-BIN”
- Describe key factor for success of Ta-Q-Bin in Japan
One of the major key success factor of Ta-Q-Bin in Japan is their end to end quality of human resources. Since they are in the labor intensive industry. The core of their business relies on the quality of the frontline employees who interact with their customers.
Their quality process of human resources starts since the quality at the beginning of employment. To ensure Yamato has full control on the standard of service quality over their employees, they employ 100% of their task forces while others competitors outsource this part to third party. This might vary the quality of service standard.
Yamato also defined their Yamato way which provide the core value and company precept and communicate them over their employee during the new employees one-week intensive training session to create the right fundamental corporate culture all over each employees.
Employees are encouraged to contribute their ideas through Voice of Employee (VoE) which employees can provide their feedback, lesson learnt, process improvement while they have learnt from the field to improve the service quality and the excellence ideas will be recognized by the senior managements and award system to reward the employees who introduces the good practices to their center. This process is the continuous improvement (Kaizen) for the company to improve their service quality to be better
Another factor is their operation excellence. Yamato implemented hub-and-spoke system and conduct the ‘last mile’ of delivery where bulk of parcel are transferred between hub and broken down into smaller batch and distribute from hub to district branches and center then delivered to customer. This practice improve efficiency and lower the operating cost by reduce the number of direct delivery to each destination.
Multifunction of employee both sales driver (SD) and Field cast (FC) are the key roles in Ta-Q-Bin operation. They can work in several function within 1 role. Not only driver but salesperson who can provide recommendation for their customer about the packaging and delivery, clerk to collect and issue customer payment on-site also manager who can make a decision on route when there’s any change in volume of parcel in the most efficiency way. This multi-function role plays a significant competitive advantage because of operating cost in salary or wage of the employee is reduced from several roles into only one.
- What is the difference between Ta-Q-Bin and other similar delivery service available in your hometown?
In Thailand, delivery service market in almost perfect competition market structure. There are many small service providers in Thailand but they cover only some part of specific area. The biggest player still Thailand post, a state-own enterprise. They offer various type of delivery service both Business-to-Business, Business-to-Consumer and Consumer-to-Consumer.
Recently, Thailand post was modernized and restructured their organization by enhancing their operation with modern technologies.
Management style of Thailand post is difference from Yamato since it’s a state-own enterprise the complex high hierarchy of management compare with the flat organization in Yamato.
The number of domestic parcel shipping of Thailand post is almost 2 billion units with trending up. It less than the the number in Japan domestic market.
Figure 1 the number of domestic parcel delivery in Thailand (2012-2014) in millions unit
Comparing their financial performance their operating income margin is around 9.18% (2012-2014) which higher than Ta-Q-Bin (around 5.11%-5.29%, 2010-2012) this represent that the performance of Thailand Post is higher than Ta-Q-Bin.
However, the quality and minded service always be the weak spot of Thailand post. It represents a bad reputation of Thailand post delivery service on poor quality. Customer mostly complained about their defect good that was damaged while in the shipping process. The quality of service is the major problem on Thailand Post but they dominate the monopoly in domestic market. Most people in Thailand still accept to use their service because of their price still reasonable with their quality of service.
- What are major barriers to launch Ta-Q-Bin service oversea?
Market differences is one of the major barriers to prevent Ta-Q-Bin to launch their service oversea because of their business mostly relies on the quality of employees in the front line which the standard and quality might varies depends on their culture by the example of Taiwan success because of their similar culture and environments with Japan. However, Ta-Q-Bin still has to adapt their service to match with each target market such as delivery service by motorcycle in Taiwan is well-known style. Ta-Q-Bin has to use this way of delivery even it might be dangerous the break the company precept in Japan on “Safety first, sale second”.
On the other hand, another country which has difference culture, local believe and environment has many challenge for Ta-Q-Bin to deal with such as Singapore which customer-to-customer business is relatively low compare with their huge market on business-to-business transaction. Also, low brand awareness in low-sparse demand density result in costly and unrewarding operating cost.
The number of competitors in Shanghai market turns this service into a highly competitive market result with price war. Customer can get a cheaper price from their competitors although the quality of service represent the the low price
However, the booming of e-commerce in China contribute a large growth in logistic business. Ta-Q-Bin leverage their advantage on Cool Ta-Q-Bin on this growth but still in bottle neck with the not ready infrastructure in temperature control fridges and container.
Poor service-mindedness is also a major obstacle for Ta-Q-Bin in several countries such as Singapore, China and Hong Kong which result in high turnover on staff over these country.
Difference culture background also affect the operation of Ta-Q-Bin in Malaysia since most of their population is Muslim, some of their belief is not the same as Japan that could affect the employee training, direction and service quality standard in company core value based on Japanese culture.
- how do you foresee the success of their global expansion by 2019? Do you agree or not?
In my view it is possible to achieve their goal of 20% of their total revenue by 2019. Because Ta-Q-Bin expands their market to ASEAN and establish their regional operation in Singapore as an ASEAN hub in this region.
ASEAN Economic Community will be Ta-Q-Bin biggest chance to gain market share over ASEAN regions since the collaboration of free movement of good, service, investment, skilled labor and freer flow of capital among those ASEAN members. Logistics industry will gain the benefit of these movement of goods, services as well.
Most of the ASEAN country are still in developing. It will have a lot of chance to gain market share in those country. The number of logistic service providers are huge but their service quality varies with non standard also, the coverage of the area is cover only major area. There’s still plenty of room for Yamato to expand their business.
However, the diversity of these country is one of Ta-Q-Bin challenges to expand their global market because most of the population are Muslim. They might have many difference culture and consumer behavior compare to the developed country that Yamato is already entered. To issue this challenge carefully joint venture with local firm might be the realistic way to penetrate the market in each local country.