The given picture illustrates
Yes, an image was provided. It may be considered a picture. However, since it explains a 4 step process, it should be called an illustration instead of a picture. An illustration is a drawing or series of pictures that depict a procedure leading to a final product or outcome.
the paper
Please double check the image. I do not think that the material can be called paper yet. It is still in raw form. I believe you missed a description here.
In the next step
It is not the next step but the final step. Always count the number of procedures as you write about it. If there are 4 steps, then it would be better use ordinal references for this purpose. Number the steps so that you will know when to reference the final step in the procedure.