Tamago-ya (meaning “Egg-shop”) was founded by Isatsugu Sugahara in 1975, as a small mom-and-pop bento (“boxed lunch”) shop. Under the entrepreneurial leadership of Chairman Isatsugu and his son President Yuichiro Sugahara, the company grew rapidly to become the largest lunch box producer in Tokyo, Japan. As of 2019, it produced and delivered 70,000 boxes a day, employed 650 people, and grew revenue to US$80 million. Tamago-ya produced and delivered high-quality lunch boxes at low price of US$4 to office workers in the Tokyo Metropolitan area.
The success of Tamago-ya depended on its unique hyper-efficient supply chain management. It received orders at 9 a.m. until 10:30 a.m., and delivered by noon. Thus, the delivery lead-time was very short, and on-time delivery was a challenge in busy Tokyo. However, Tamago-ya hardly ever missed a delivery deadline. While demand was large and fluctuated from day to day ranging between 60,000 and 75,000, Tamago-ya’s average “loss ratio” (the disposal ratio due to over-production or returns) was only 0.06 percent. This translated to only 42 lunch boxes left over from 70,000 total productions a day.
The combination of strong leadership with customer-focus orientation, empowered workers to achieve continuous improvement, and the unique economic and cultural environment of Tokyo led Tamago-ya to pull off its “magic.”
About the Author
Seungjin Whang is Jagdeep and Roshni Singh Professor of Operations, Information and Technology at Stanford Business School. His research interest is in supply chain management and the economics of information systems. Outside, he serves on the advisory boards at large manufacturing companies and a venture capital firm.