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.