Ikea

PRODUCT AND SERVICE DESIGN chapter 4 ']]7

Many of IKEAs's products are bulky, for example, tables and chairs. IKEA pioneered the concept of flat. The company's eureka moment occurred in 1956, when one of IKEA's first designers watched a customer trying to fit a table into his car. There was only one way to do it: Remove the legs. From that day forward, most IKEA products have been designed to ship disassembled, flat enough to be slipped into the c./~go hatch of a station wagon or safely tied down on an auto's roof rack.

In IKEA's innately frugal corporate culture, where waste has been declared a "deadly sin," the flat package is also an excellent way to lower shipping costs by maximizing the use of space inside shipping containers. The company estimates transport volume would be six times greater if its items were shipped assembled. From the design studio to the warehouse floor, IKEA employees' mantra is always the same: "We don't want to pay to ship air."

Making things fiat is an IKEA obsession. How many times can you redesign a simple fged*clay coffee mug.'? IKEA's mug was redesigned three times--simply to maximize the number of them that can be stored on a pallet. Originally, only 864 mugs would fit. A redesign added a rim such as you'd find on a flowerpot, so that each pallet could hold 1,280 mugs. Yet another redesign created a shorter mug with a new handle, allowing 2,024 to squeeze onto a pallet. While the mug's sales price has remained at 50 cents, ship¬ping costs have been reduced by 60 percent, which is a significant savings, given that IKEA sells about 25 million of the mugs each year. Even better, the cost of production at IKEA's Romanian fac¬tory also has fallen because the more compact mugs require less space in the kiln.

When you ship 25 million cubic meters of goocis all over the globe, fiat-pack frugality adds up. IKEA now uses a 65 percent average fill-rate target for all the containers it ships, and it hopes to increase that to 75...