(in the picture – a few cartons of one of our finished products – Bubboz laundry bar soap)
The Japanese invented a concept known as “Kaizen” which basically means continuous improvement. Kaizen is all about making small daily improvements to make a process more efficient. Areas of improvement typically revolve around doing something better, faster, and cheaper. In a production process, this has the effect of increasing output while reducing costs.
The central aim of Kaizen is to reduce waste. Waste shows up in many forms including idle time, material wastage, machine breakdowns, poor quality, workplace accidents, excess inventory, etc.
A Kaizen culture involves everyone in an organization bearing the responsibility to reduce waste in their line of work. The person on the shop floor is empowered to find improvements and reduce waste. Top leadership should put in place mechanisms to encourage a culture of Kaizen.
We have tried to implement Kaizen within our cottage business in a number of ways. The first way is using minimum resources to develop products. We have so far developed and launched five products on the market on a very small budget. The process has largely been informed by market research followed by experimentation and market feedback. The teams use very few resources to develop a minimum viable product that is tested on the market. This is followed by product improvements as customer feedback is incorporated into the product design.
Our production processes are initially manual as we gauge the performance of the product. No idle investment in equipment or inventory is made until the product demonstrates traction in the market. The manual process is continuously improved to increase output and reduce costs. For example, our soap development process is following this path. Inventory is kept to a minimum because of limited resources. We only keep inventory to last a few days at the factory. This reduces the costs of inventory holding.
Our market development process follows a similar path. We identify a small market where we can compete and then try to dominate it. Our soap is only sold in a handful of locations. Our ketchup is only sold in certain schools. Playing in a small field allows you to concentrate effort. Our advertising budget is almost nonexistent. So the team has to find creative ways to sell the product in the field. The team applies a mix of incentives to woo potential customers including giving limited credit, bonus products, small discounts, and free product samples. Appearances on local and market radios is another cost-effective way we use to create awareness of our products.
The financing process follows a Kaizen process as well. Investments are only made when it makes economic sense. We have avoided debt thus far and have largely grown organically up to this point. We have found ways to reduce costs including changing the recipes of some of our products to lower costs without compromising quality. We have introduced a system to track sales and costs automatically. We have also developed a phone app called “Patiya” to manage field sales and cash collections.
All these small improvements are beginning to compound to improve the profitability and sustainability of our cottage business. Kaizen is a mindset. It involves embracing the process of validated learning where you learn through trial and error. At its core is the belief that we are capable of making things better through consistent effort. This, therefore, implies that the Kaizen path to wealth is available to all of us who are willing to make the effort.