TCMBA #4 - Process Innovation in Specialty Coffee
This is the third in a six-part series about innovation. Let's get started!
In the last two emails we identified that:
This week, we’re going to look at another area of innovation: Process.
Process innovation is usually internal, it’s the way business is done. It can include how we engage with customers, media, our staff, and how we create physical products.
Some well-known examples include:
🚗 The Toyota Production System (aka Lean Manufacturing)
🚛 Walmart’s distribution center strategy
💻 Trade’s coffee platform and distribution
In all of these cases, the revolution wasn’t in what was happening, but in how it was happening. Cars were still being built, products were still being moved on trucks, and coffee bags were still being delivered from roaster to consumer.
But the steps were redesigned to create a competitive advantage.
Process innovation can also be born out of product innovation. If you create a new product, you will very likely have to create a new process.
So how to get started?
Thankfully, innovation doesn’t have to be disruptive. Especially with process innovation, incremental changes can have a huge impact.
Here’s a great way to look at it:
James Clear writes about this in his book Atomic Habits [find it here, this book is life changing!!!]:
Imagine you are flying from Los Angeles to New York City. If a pilot leaving from LAX adjusts the heading just 3.5 degrees south, you will land in Washington DC instead of New York. Such a small change is barely noticeable at takeoff-- the nose of the airplane moves just a few feet-- but when magnified across the entire United States, you end up hundreds of miles apart.
That’s a 225 mile difference!
Imagine if you started making incremental changes to your process! How could that change the trajectory of your business?
Small things add up to big things.
“Okay, that’s cool, but why would I innovate my process?”
Here’s why:
📉 Decrease the unit cost
📈 Increase quality
📦 Deliver new or improved products.
We all want our costs and delivery times to go down, right?
Here’s a quick case study of a company who used process innovation to keep their competitive edge.
Tropical Brasil has been a surfboard manufacturer since 1981. In their industry there is a huge manufacturing gap: Local handmade operations producing only a few hundred surfboards per year on one side. Large scale Japanese manufacturers making hundreds of surfboards per day on the other side.
Over the course of 34 years, Tropical Brasil worked to close this gap by bringing process innovation to their business.
First, there was a recognition of need. The Shaper— the person who literally shapes the boards— realized that it wasn’t sustainable to rely on him long term. He was aging and could get repetitive injuries from the process.
So they started looking for technology.
Tropical Brasil didn’t have the capital to purchase large-scale equipment like their Japanese competitors. Their Brazilian competition hadn’t innovated at all, so looking to them wasn’t helpful. Instead, they looked at their problem from a different angle by reaching out to the automotive, furniture, and marine industries.
During this 34 year timespan they used external inspiration to update their processes six times, moving from manual processes to automated processes.
These operational changes allowed them to remove a bottleneck.
For example, in their 31st year of business they replaced their hand painting process with screen printing. Not only did it help their day to day operations. but it also allowed them to more easily customize boards for consumer or partnerships, furthering their competitive advantage.
By making deliberate updates to their process over a long period of time, Tropical Brasil carved a niche in the middle their industry that nobody was occupying.
They can offer products their Brazilian competitors can’t due to the their process innovation, but are still a trusted local brand, something their large-scale Japanese competitors won’t ever be.
🏄🏻♀️ Tropical Brasil has been a surfboard manufacturer since 1981. 🏄🏻♀️
In their industry there is a huge manufacturing gap: Local handmade operations producing only a few hundred surfboards per year on one side. Large scale Japanese manufacturers making hundreds of surfboards per day on the other side.
Over the course of 34 years, Tropical Brasil worked to close this gap by bringing process innovation to their business.
First, there was a recognition of need. The Shaper— the person who literally shapes the boards— realized that it wasn’t sustainable to rely on him long term. He was aging and could get repetitive injuries from the process.
So they started looking for technology.
They didn’t have the capital to purchase large-scale equipment like their Japanese competitors. Their Brazilian competition hadn’t innovated at all, so looking to them wasn’t helpful.
Instead, they looked at their problem from a different angle by reaching out to the 🚙 automotive, 🪑 furniture, and ⚓️ marine industries.
During this 34 year timespan they used external inspiration to update their processes six times, moving from manual processes to automated processes.
These operational changes allowed them to remove bottlenecks.
For example, in their 31st year of business they replaced their hand painting process with screen printing.
Not only did it help their day to day operations, but it also allowed them to more easily customize boards for customers, furthering their competitive advantage.
By making deliberate updates to their process over a long period of time, Tropical Brasil carved a niche in the middle their industry that nobody was occupying.
They can offer products and options their Brazilian competitors can’t, but are still a trusted local brand, something their large-scale Japanese competitors won’t ever be.
I see a big gap in the world of specialty coffee.
What open space is there between pour overs and the K-cups? It’s as good a time as any to start exploring.
My steps for this week can be summarized in two words: get curious.
Explore different corners of your company by looking at the numbers, asking the team, noticing delivery times, and asking customers....
❓ What untapped potential do you see for us? (to your team and customers)
❓ What’s taking way longer than it should? (to your team and customers)
❓ Are there expenses that could be eliminated? (ask yourself and your team)
❓ Who could break your business if they were out indefinitely-- think about the Shaper at Tropical Brasil? (ask yourself and your team)
Keep digging…
What area hurts the most?
Is it your labor costs in the roastery?
Your green coffee costs?
Your long wait times in the cafe?
Find the opportunity. What’s the area that makes you say, “if we can get ahold of this, our business would be in a totally new place.”
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At some point, we have to stop swiping our debit card without looking at our bank balance. Let's have the courage to look at our bank statement, see the damage, and make a plan for tomorrow.
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Take stock of where you are.
Bring your team into the process.
Choose ONE key area to improve.
Look for inspiration and see what’s possible in more mature or just different industries (like we’ve done so far with Swiffer and surfing!). Get ideas and try them on to see if they could apply to your business.
If you need help, you know where to find me.
Grab your binoculars and magnifying glasses and go!
When you’re ready for help, here’s how we can work together:
Follow me on LinkedIn for more free content.
Access weekly group coaching in The Coffee MBA Community.
Need deeper support? Work with me 1:1.
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