“What does a factory need to survive the fourth industrial revolution? It’s not enough to have money, good employees, and customers. What it really needs is to learn about advanced production processes, the use of robots, artificial intelligence, and what the competition is doing. But while large factories invest vast efforts and resources into this, a small to medium-sized enterprise usually doesn’t have the availability or resources to learn about and implement these changes. This results in the weakening of small factories, with a third of Israeli plants having low productivity compared to the OECD and being in danger of closing.
It was clear to us, as a government body, that we must intervene in the face of this challenge. We knew that our task was to help factories learn, progress, streamline and take themselves a step further to stay in the game. So a decision was made to establish the Institute for Advanced Manufacturing in Northern Israel, which will provide small and medium-sized industries with professional guidance and advice, and will serve as a knowledge center.
We understood from the beginning that to produce a system that would work in the long-term and work well, we would need partners; so we decided that the institute would be run by a body from the business sector, with minimal bureaucracy and maximum professionalism. Government goals were laid out for the concessionaire, and we established a bonus-based incentive model. A government budget of 50 million shekels was allocated.
I think that’s what’s special about this: I bring with me the government’s initiative and desire to see change in the industry and in the region, but also the understanding that change requires partners. Our immediate partner is the business sector, which brings value to the table that we simply cannot bring ourselves. Therefore, the institute established to provide this service to the factories will be run entirely as a corporate entity, entrusted with administering government funding and implementing the goals which have been set. Our goal is a 30% increase in productivity for the institute’s customers, who are factories with low productivity.
The COVID-19 outbreak made things even more complicated. If small plants have always faced difficulties and challenges, they’re now being impacted by a global pandemic. During a lockdown that includes traffic restrictions, how do workers get to the factory? When there is a directive for only 10 workers indoors, how do you operate the production floor? And if the orders are to work from home, how do you recreate the information found in notebooks and binders at the office?
But it was actually during this period that factories gained clarity about a lot of elements, including efficiency, manpower and productivity. In the year since the pandemic began, over 100 factories have turned to us for guidance and advice. And this is without any advertising or marketing – only word of mouth. Over 60 factories are currently participating in the process.
We call the first stage the road map: a diagnostic process, in which the institute’s representatives visit the factory during its working days and map out areas that need streamlining. It takes about a month-and-a-half, at the end of which the plant manager is presented with a situation report mapping out approximately 15 different challenges. For example, here are some recommendations that might be received at the end of the diagnostic phase: integrating a system of sensors for information monitoring, integrating robot systems, optimizing factory work routines, a control system, and more.
Then we take a step forward, and here comes the challenging part: envisioning how the reality might look different. Will the plant manager be able to picture the change? What will the factory look like with the new technology coming in? What will it look like with the change in management patterns and work routines? It’s not a simple process. At this stage, we assist the factories in the consulting and implementation phase of the projects proposed in the road map that the plant management has chosen to focus on.
In order to fully succeed in this stage, over the coming months, we plan to establish a demo center: a physical space where equipment with the most advanced technology will be displayed. I believe this should become a pilgrimage site for factories and industries, in Northern Israel as well as all over the country, who recognize the need to become more efficient.
The factory manager will arrive with their road map and be able to see with their own eyes what we are recommending, as well as why and how it works. It’s not theoretical, it’s not in a video, it’s not in words – they can actually see the machine, feel it, try it.
And then what? Once the plant manager decides exactly what they need, we will brainstorm together about how to finance it. Part of the subsidy will come from the institute, part from an investment body we’ve set up, and part from the factory itself.
To make real change, we understand that it’s not enough to work on the infrastructure of the factory; one also has to work on its management. So we set up a course for managers, which will offer any manager an opportunity to become a professional and prominent entrepreneur. This is a course of about six months, which will be offered to any manager who has completed the diagnostic phase. The course includes significant and detailed knowledge for the manager and guidance in the implementation of the projects in their road map, among other things, by working closely with a mentor.
The factories, for their part, get high value at an exceptionally low cost: they pay a token fee of 2,000 shekels to demonstrate commitment to the diagnostic program, after which the consultation and assimilation programs are subsidized at a rate of 50-70%.
Recently we understood that a partnership with the business sector is not enough: to fully realize the task we’ve taken on, we need to forge a partnership with academia as well. So the ORT Braude College of Engineering won the bid to operate the institute, together with the Tefen consulting company. We are now working to connect the Technion – Israel Institute of Technology to the project, as well.
This is how, together with our partners, we can make the institute an engine of regional development and turn the Northern region into an international center of advanced production.