Maybe What’s Wrong With Your Product Is How You Ship It?
Product managers know that to make a product a success, the product must be profitable. To achieve this, customers must buy the product at a price that is higher than what it costs to produce and deliver. Product managers spend a lot of time creating a product development plan that will allow us to find ways to convert potential customers into customers. Perhaps we should spend our time looking for ways to reduce the cost of making our product. This is precisely what IKEA, the Swedish furniture giant, is doing. We might learn something from them.
Identifying the Problem with Product Packaging
What’s the problem? The problem is that shipping your product to customers may be too expensive for your company. This is not a good idea to include on your product manager resume. IKEA has realized they have a problem. They are currently trying to increase their bottom line by 74% over the next six years. They need to improve their efficiency to achieve this goal.
IKEA’s Texture lamp is a good example. This popular product was made with 33 components. IKEA looked at their expenses and discovered that the lamps were costing a lot to ship to their stores as well as to customers who purchased them online. It was apparent that something needed to be done.
IKEA decided to look closely at the packaging of this lamp. They found that there was much to be improved. The first step was to reduce the number of parts that go into the lamp’s construction from 33 to 9 components. They then looked for ways to reduce the packaging’s weight. The product became 28% lighter than before. All of these changes led to IKEA now being able to fit 128 lamps onto their shipping pallets instead of the 80 they used to.
The solution to the Product Packaging Problem
These product problems are not something that a product manager can solve on their own. You will need to collaborate with others with different skills to design packaging solutions that allow your products to arrive safely and do not add bulk or excess weight.
IKEA brought together a team to design a way to reduce the cost of their supply chain, which was being used for the delivery of the Ektorp sofa. The original design of the couch was a solid piece. The team decided to split the sofa into several parts when they looked at redesigning it. They made it easy to pack by removing the armrests.
Although this was a great start, it was not enough. The redesign was further advanced by the team. The hinged back was added to allow for easy packing. All of these changes resulted in a package that was half the size it used to be. According to IKEA, the redesign of packaging resulted in 74777 fewer trucks needed to transport sofas. The redesign also reduced the cost of the sofas for customers by 14%.
What Does All This Mean for You?
Product managers are responsible for making their product a success. While we love to try to sell our product to new customers, we often don’t think about how our product manager’s job description will impact the cost of shipping our product to customers and stores. IKEA is aware of this problem and has begun redesigning its products to lower their packaging costs.
The Texture lamp is an example of the changes IKEA is making. The engineering team decreased the number of components used in the product and changed the packaging to make the product easier to ship. The same design process was applied to the Ektorp sofa by IKEA. To make it easy to transport, the single-unit sofa was divided into multiple pieces. Customers were able to enjoy lower shipping costs and a lower price as a result.
To be a product manager, you need to spend time looking at all aspects of your product. This includes how we will attract customers and how much it will cost to get the product to them. Another important job of a product manager is to create teams that look for ways to lower the packaging cost of our products.