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Shaving Off the Waste

by BILL WADDELL

No one needs any evidence to believe the shaving products business is completely out of control.  Every time you shop for razor blades there is a new spin on them and absurdly higher prices.  You can spend $17.79 plus the cost of the gas to get to the store for four replacement cartridges for a Gillette Fusion Pro-Glide Power yadda yadda yadda at Target - "New", of course, which amounts to almost four and a half bucks a cartridge ...

... or you can spend half that and have these guys deliver them to your house.  

Are they as good as the ones peddled by Gillette for almost $18 plus the gas to get to the store?  Probably, in light of the facts in this court case.  Gillette and Schick battled it out with a lot of lawyers involved over false advertising claims.  By the time you are a couple pages into the court findings you realize neither one of them can back up much of anything they claim in their ads.  By the time you are halfway through the findings you feel like you are eavesdropping on an argument between two little people over which is the tallest midget in the circus.

The moral of the story is that advertising, sales and marketing (unless the sales person is an engineer doing consultative sales), packaging (except to the extent that it protects the product and identifies the contents), and innovation that is new but not more valuable in the eyes of customers is all waste.  And, of course, the cost of lawyers to fight the competitors over who is infringing on each other's waste.  How much of this non-value adding waste is built into products - well, in the case of razor blades, it would seem half of the cost to the customer is wholly without value.

The Dollar Shave Club is doing the same thing the music, video and book download people did - cut out all of that wasteful bricks, mortar, packaging and handling that added no value to the product.  The companies - like P&G and Energizer, the combatants in the absurd court case - are so steeped in the notion that the massive waste under the brand management umbrella is not only necessary but critical to success they are unlikely to ever see competitors like the Dollar Shave Club coming.

Both P&G and Energizer, companies about which I have a fair amount of knowledge concerning their lean efforts, are great at scooping up the pennies on their shop floors wasted on poor quality, unnecessary material handling and labor inefficiencies. But they are blind to the buckets of dollars they waste as a result of their core business models.

This narrow definition of lean - viewing it as a factory issue, rather than an enterprise issue - is way to common.  Easy enough to assume it applies to everyone else, but not you, right up until some guy with a smart-assed YouTube video renders your entire sales and marketing organization obsolete, and your distribution channels unnecessary.

Original: http://idatix.com/manufacturing-leadership/shaving-off-the-waste/

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10 Responses to "Shaving Off the Waste"

  • Panu
    7 March 2012 - 11:51 am

    By the way, did you notice the book that the guy with shaving foam in his head is reading, Eric Ries’ Lean Startup.

  • Bill Waddell
    7 March 2012 - 12:08 pm

    No I didn’t. Great catch, Panu!

  • Simon Cunnane
    8 March 2012 - 5:39 am

    Hi Bill,

    I’ve gone back to college part-time and the focus is on International Entrepreneurship. I’ve just come out of a lecture on Pricing Strategies and the one line I took away from it was this:

    “Price is determined by elements of the market, not by cost”

    Now I’m confident, especially after discussions on Lean with her, that my lecturer is aware of but not an expert in Lean Business and TPS. However, you’ll recognise the logic immediately from Mr. Ohno’s “Workplace Management in relation to his 3 pricing formulae.

    Being a “necessary” product, Gillette et al will keep making fools of us until a viable alternative is presented to the consumer. We have the same issue in Ireland. Perhaps the Dollar Shave Club will break the mould.

    Further to Panu’s observation, the initial still of the video shows the actor leaning against what brand of forklift…?

  • David Hallsted
    8 March 2012 - 6:26 am

    That was great. It has made my day. I am still laughing as I type. Thanks

  • Allen Roberts
    8 March 2012 - 1:14 pm

    Hi Bill,
    Oh so true!
    The product management model that assumes IP is accumulated by fatuous features, as distinct from benefits, advertising are over.
    However, it is hard to condemn Gillette for milking the last of the glory days, but they are about to end.
    Allen

  • JM
    8 March 2012 - 4:53 pm

    The high cost of replacement blades has always been a pet peeve of mine. Fortunately I was able to get my hands on a free case of Schick blades 10 years ago, and I am still using them.

    Dollar Shave Club has the chance to be a great disruptive force. I wish them luck.

    By the way Bill, creating a website and producing a video fall under “advertising/marketing.” Isn’t that wasteful?

  • Ian DeWeerd
    11 March 2012 - 1:29 pm

    Love the blog post. So easy to get on board with lean and waste reduction when you relate it to those ridiculously priced razor blades.

    The video was awesome too. I didn’t think it was a real company until I checked out the website. I’d definitely support a company that’s trying to save their customer’s money and has a sense of humor.

  • Thomas
    17 April 2012 - 6:46 am

    I still use Gillette Mach II – tbh, all the otherones just look the same, bar some new design features, and the shave with the old Mach II ones is very close.. Why would I want to get any closer? I’d just look like a baby!

    Now, if they were in the market making condoms..