Process

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Shalom Aleichem, my beloved readers. May God bless you with all the best. For my past articles, they are published on my?LinkedIn, you can also check my profile there.

The process is the most important part of a company. A company that has no principles can go on as long as it maintains good processes in production and services. A good production process guarantees product quality, and a good service provision process guarantees consumer loyalty.

Many companies in the world have no principles but keep going until one day they stumble or get stuck because times change or their products are no longer relevant. Only then are they trying to find a new identity, popularly known as re-inventing. Fuji and Kodak can be examples. Even though they call it an imaging company, they actually focus on making film negatives. Since the digital revolution, they are completely unprepared to become an imaging company, they are the negative film industry. Therefore they are lost over time. Nokia is also included. Instead of becoming a communications company like their motto, connecting people, they instead focused on cell phone production and missed the giant wave of smartphones so that they were left behind and crushed by other companies such as Samsung and Apple, and all Chinese brands.

Toyota is an example of a company that is super focused on the process until they made the Toyota Way book which explains the whole process of the company running from stock to quality control to ensure the quality of their products is guaranteed and meets Toyota's quality standards which have become synonymous with durability and longevity. I'm still observing whether Toyota can keep up with the changing times and transition or be left behind.

A healthy and innovative company has principles and processes. Companies that are process-centric will only be efficient but less or not innovative like Kodak and Fuji.

For certain industrial fields, the process is indeed the focus. For example the food industry. Innovation in the food sector is not as far as the technology industry, therefore they are very focused on the process because it is in the process that they can maintain quality, efficiency, and profit. Automotive is also an industry that is often process focused. There are very few brands in the automotive industry that are innovative. Because of that, Tesla became a market disruptor because all the players at that time were comfortable with technology that had matured for 100 years, namely the internal combustion engine. Although every year new models come out, most of them are just improvements in fuel consumption, model, and aerodynamics. Fundamentally, today's car engines still work on exactly the same principles as the 1908 Ford Model T.

Even though they are 100 years apart, the Model T and Mustang above still use similar engines with the exact same working principle. 100 year of improvement did produce a much more powerful and durable engine, but no major innovations occurred because the automotive industry is a process-focused industry. All industry players focus on increasing power, efficiency, safety, and driving comfort. This industry is evolving, slowly but surely.

It takes a market disruptor like Tesla who presented a user-friendly electric car for everyday use to shake this established industry and make the old players panic to follow the "innovators". Because actually, the concept of electric cars has also been around for a long time, more or less as old as internal combustion engine cars, it's just that the limitations of battery technology have made the concept of electric cars abandoned.

This Tesla Roadster is more powerful than all fuel cars in its class and is almost silent, definitely not smoking at all.

On the other hand, Nestlé has been around for a very long time (founded in 1866) and they have produced many products and variations of their old products. However, the food industry is not as aggressive as the technology industry in innovation. Understandably chocolate bars are still chocolate bars, milk is still milk, only before it was liquid, now there is powdered milk, and so on. Innovation is slow and limited because human digestion is limited. Today, because there are too many chemical innovations in the food industry, it actually causes a decline in consumer health. Because of this, some food industry players have turned around and opted to go natural and make health-focused products, for example, fresh milk which is minimally processed to maximize nutritional value at the cost of shelf life.

Most Nestlé products are variations, not innovations. Varieties of coffee drinks (Nescafe etc.), chocolate (Kit Kat, etc.), candies, etc. Food industry innovation is more in the production process and packaging than the actual products themselves.

We can see, the process is the most essential component of the industry. Without a good process, a company will quickly be overwhelmed by competitors in similar industries and bankrupt or they are not efficient enough so they don't have enough profit for advertising and product development which makes them unable to compete and disappear from the market.

Innovation plays an increasingly large role in fast-moving fields such as IT and electronics, in other fields that are mature or have not changed much, process is king. As an example of the furniture industry, innovation can be said to be limited in design. The biggest innovation in the field is production efficiency so that raw materials can be optimally utilized. A table is still a table and has remained more or less the same basic form since thousands of years ago. In the old days, saws were thick and wasted a lot of raw materials, today's band saw blades are only 1-2mm thick so materials usage is much more efficient. Low waste, high efficiency. This includes the invention of particle boards, plywood, and particle board, all in the context of raw material efficiency and waste minimization.

All industries must pay great attention to process so that your company has competitiveness, maximizes profit, and has good liquidity to support research that produces innovations to support further development of your company.

The last point, good products are produced from the right process, efficient and effective. Products are the face and revenue generator for your company. The next and final article in this series will cover the product, stay tuned for this series for a complete discussion of the company's entire series.

Have a blessed week and please do share this article if you find it interesting. You never know who will be blessed, God bless.