Tombow Pencil CO. Founded by Harunosuke Ogawa in 1913 is a Japanese writing device manufacturer. Mitsubishi, its competitor along with Tombow shared about 70% of the pencil market industry before 1963 (Mishina, 1993) Tombow as other companies are always seeking for ways to improve their operational system as well as their quality in order for them to become the leaders in the market. The way that Tombow is achieving this way of improvement is relatively different than other firms, instead of vertically integrating their operations system, they achieved this improvement by focusing and building strong relationships with other suppliers to manage its production operations (Mishina, 1993). Multiple suppliers were involved in Tombows enhancement and improvement which is built on trust and highly professional relationships. This strategic outsourcing increased Tombows technology development and production cycle which put them as a leader in the market. The subcontracting strategy that Tombow adapted was very clever as small suppliers normally focus on their own specialty which gave Tombow the chance to develop and introduce new technologies into the market (Quinn and Helmer, 1994).
This means that Tombow can concentrate on the broader scale of business sections, while some details are up to an expert. The strategy of subcontracting the manufacturing of different products to different subcontractors gave Tombow the chance to lower their long term capital investment, therefore lower their fixed overheads. It also decreased the labor source at half the cost of part timers (Mishina, 1993). With Tombows core competencies in managing its own subcontractors in terms of logistics, operations, engineering, etc…and the built in relationship between Tombow and its different suppliers, a dramatic improve was obvious in their return in capital as well as greater flexibility and quick responses to the needs of the customer at a lower cost (Quinn and Helmer, 1994).
-Mishina, K. (1993). Tombow Pencil Co.,Ltd. Harvard Business School Case, 9-692-011. Harvard University, Cambridge, Mass -Quinn, J. B. And Hilmer, F.G. (1994) Strategic Outsourcing. Sloan Management Review. Summer 1994