After The Year of The Dragon...

My friend Dalibor Horvacki ?? shared an excellent article recently. I agree with Dalibor's points and was planning to write something similar. but I was more afraid then him; so I got my courage and took the elephant out of the room and I have seen the dragon sleeps beneath our industry... It is time to reveal the dragon. That dragon's ability; which comes from the colors that we deem suitable to our temporary necessitates, to blend into its surroundings like a chameleon makes it difficult to spot.

This time, it is not a supply chain crisis, shipping issue, overstock problem, or a result of wars around the globe... It is evident that the eyes and limbs lies beneath the big question belong to a dragon, which has started to submerge.

While we must remain vigilant on these topics, there is another issue that we must consider in order to remain competitive. I have previously criticized our approach to this issue, but it is important that we recruit people to think and act on it. To provide some context for this piece, let me explain my thought process.

Europe is confronted with various challenges, including costly energy, high inflation, challenging financing, and a shortage of skilled labour. Addressing these challenges is crucial to improve the situation.

However, when compared to Asia, the cost difference is not significant. Furthermore, we do not have to deal with the complex and expensive costs of transportation or import duties and procedures. Initially, I was uncertain about our specific problem. What makes certain EU countries, like Poland, more competitive than others? This question arose in my mind, since we are as Turkish factories try to keep up with them as competitors.

Do European countries have a strong work ethic, or are high salaries the main motivator? Are government tax policies a factor? It is worth noting that many EU countries have similar policies. Additionally, it is interesting to consider that most recently bankrupt companies were not traditional bicycle manufacturers. Those who encountered issues were experimenting with non-standard, complex e-bikes. It became evident that the bikes they produced relied on non-standardized, not well-established, and niche-produced components. Most manufacturers produce mass-produced bikes ranging from entry-level to high-end, although a few companies and bikes deviate from the norm. The question remains: what sets them apart?

Objectivity is key in this analysis.When considering how to defeat the dragon, it is important to identify the competitive advantage and break down the problem into smaller parts.

During R&D Phase;

Developing a final product using standardised components can result in significant cost savings.The tooling is also inexpensive and standardised, further reducing costs. The cost of these components is much lower than that of new, advanced, state-of-the-art components, especially in low-volume production. A component incurs development, tooling, and administration costs that are spread over the production volume. Standardised components can significantly reduce costs during production and lead to long-term cost savings.

During the Production Phase;

Factory workers can be trained more easily and work faster with standardized components, resulting in significant cost savings. This leads to a more consistent quality of both the components and the bike assembly. In the long term, standardized components can result in significant cost savings.The interchangeability of components can be of vital importance to a company in the event that a supplier is unable to deliver or goes out of business. This could be a crucial turning point for 'our own system'. Standardising the costs of bikes and components should be avoided. Testing, paperwork, and lab costs all contribute to the final price of the bike. Non-standardised products will make our industry less competitive in this area, as they are less sustainable and worse for the environment.

Last Step = After-Sales Issues

Maintenance, both in and out of warranty, will be easier and more efficient, potentially resulting in significant cost savings. Interchangeability between components can be a lifesaver for a company. In the event that a supplier is unable to deliver or goes out of business. This is potentially a critical inflection point for the 'own system' component. Significant savings can be made by eliminating the need for service network training. Future business opportunities can be gained by ensuring end-user satisfaction with your brand. All customers appreciate a good price for a product they enjoy. This can lead to more business and greater profits in the future.?

The combination of all these factors has a significant impact on the bottom line. For confidentiality reasons, I cannot give specific examples. However, there are clear comparisons within our industry's bicycle assemblers. What should we do? Shouldn't we try to innovate and come up with something new? But what if there are no new products coming onto the market on a daily basis? Of course we should invest in innovation, but we should also invest part of the savings in a product that improves all aspects of the bike, not just performance. This is the approach that will ensure greater acceptance and competitiveness.

I think it's better to come out with a great product once a year than to come out with a subpar product every day. Even if you work hard, your business will fail faster if you consistently deliver a subpar product!

The bicycle industry should establish its own body, similar to the Confederation of the European Bicycle Industry (CONEBI) and Cycling Industries Europe. This body should prioritise standardisation within the industry. Through the introduction of standardised components and bikes, the industry can regulate and expand, otherwise we risk falling back into old routines and importing more competitive complete products from outside Europe. Co-operation with the rest of the world is important, but we should focus on our strengths and competences for better control and competitiveness.

This is the point where I lead the context; Why is standardization necessary for innovation?

Balancing standardization and innovation is critical during the times of industrial change periods such as big falls and big rises. It is an ongoing issue in open industries, where change is constant and unlimited. Our industry is facing the prospect of change, which will confront an underlying tension between the competing needs for standardization and innovation. Achieving the right balance between these requirements is crucial for the success of our industry.

Experiencing too much of either can lead to morale and productivity problems. Emphasizing standardization excessively can stifle the industry's capacity to innovate and tackle new challenges. Unfettered innovation, however, can lead to wasted time due to duplicated or misdirected efforts.

Maintaining the right balance between standardization and innovation is crucial during times of industrial change. This article outlines various considerations your organization might make when attempting to strike this balance.

The Need for Standardisation

When faced with a problem, some people may choose to create or buy a new product or tool in order to solve the problem. Technological advances have made modelling business process solutions and setting up production much easier than in the past. However, the ease of introducing new systems can sometimes result in issues. Duplicate, conflicting or incompatible systems, or systems that do not address a team's highest priorities, can complicate processes within an organization.

Standardisation can help by agreeing and implementing a common set of tools and processes. This makes teams more efficient by reducing the need for new development methods, customized training, and maintenance.

Standardization has several benefits:

• Reliability, predictability, and safety. The history of electrical systems shows that in the early days of electrification, companies competed to establish individual standards for basic elements such as plug configurations and safety requirements like insulation. However, thanks to standardisation, when you buy a light bulb today, you can be sure that it will fit and not start a fire.
• Lower costs and more dependable, repeatable processes. Standardisation allows individuals in industries to focus on other aspects, such as products, rather than coordinating the use of potentially conflicting tools and processes. It also enhances the portability of skills across projects, as all projects adhere to a common set of standards. This flexibility and portability of skills makes it easier for individuals to take on new assignments.
• Consistent measurements. Creating a set of consistent metrics enables people to assess product quality across multiple products or releases. Standardization is necessary for this kind of consistent measurement and for maintaining a history of tracking quality. Standardisation provides the industry with a common language for measuring quality.

Standardization can be dangerous when it becomes an end in itself. A constant push to standardize can inadvertently stifle creativity and innovation. Overemphasizing standardization can discourage support for finding new solutions to new problems. Taken to an extreme, this can create a suffocating industrial atmosphere where individuals may be hesitant to propose new solutions in order to maintain standardization or conformity. In our industry, which is especially focused on generating new value and solutions, attempting to impose standardization can have a negative impact on team morale.

It is natural to view new challenges through the lens of former solutions. Similarly, it is often practical to use traditional tools and methods to solve new problems.

The Need for Innovation

Digital technology is constantly evolving, and the pace of change is accelerating. With new opportunities come new challenges that demand innovative solutions. Every industry must be adaptable, and its members must have the freedom to innovate.

When considering innovation in our industry, remember:

• Standardisation does not have to stifle innovation. Even tools and processes that are well-established in an industry were once new and untested. They only came about through industrial innovation.
• Progress through innovation also involves failure. It is often the case that some innovations fail, but when they do, they point the way forward to solutions. Therefore, industries must protect the freedom to fail in order to make progress. (In competitive sports, athletes and teams rarely learn from easy victories; instead, they learn how to win, including how to innovate, from failures and defeats.)

Freedom to innovate cannot mean freedom to do whatever we feel like. Encouraging and inspiring innovation is a challenge for any organisation. However, it is important to keep innovation efforts focused on meeting the organisation's goals and addressing the problems being solved.

Blending Standardization with Focused Innovation

Must we always view standardization as the broccoli we must consume, while innovation is the ice cream we crave? It is not necessary for it to be this way.

Perceptions are critical in the conflict between standardization and innovation. Those who prioritize standardization should remember that even the tools and processes they promote as 'the standard' were once new and represented change. Similarly, those who prioritize innovation must recognize that a tool or process must be stable enough for long-term use to provide value to an industry.

Standardisation and innovation are two sides of the same coin. Similarly, standardisation provides a basis for innovation. Standardisation can be seen as a core set of tools and practices that can be applied to all products. Innovation can then take the form of tools and practices that go beyond this standard. This allows teams to extend the core set of standardised tools and processes to meet the specific needs of their projects. Standardisation does not mean that all forward-looking actions should stop. Innovation can become a standard over time, making way for the next innovation.