Our 6th day of the field study, January 11th, we traveled down to Ashkelon to see the process and operations of a Desalination Plant. Our guide, Oshik, gave us a short presentation on the background of the plant before giving us a physical tour of the grounds. The plant we visited has a system known as BOT, Build Operate and Transfer. It is a contract with the State of Israel where the state will buy water at a fixed rate for 25 years. This contract expires in 2027. The plant has a 50/50 ownership between Viola Environment and IDE technology. In all they have built more than 400 plants. They produce approximately 120M cubic meters of water per year; this takes 90 days of pumping from the Sea of Galilee and it produces approximately 15% of Israel’s drinking water. For the future, they plan on opening 4-5 pants in hopes of making 80% of Israel’s drinking water desalinized.
The important take away from this meeting is the idea of maximizing efficiency. The reason they have become such a successful company is because of their resourcefulness, something that I believe also comes from the Israeli culture and goes back to Daila Megiddo’s idea of making lemonade out of lemons. The desalination plant is located a stone’s throw away from a plant that produces energy; however, instead of outsourcing their energy to them, they create their own from their own resources. They have created a desalination system that has the capability to produce the energy required to run.
The steps to the system are as follows:
- 1. Intake
- 2. Pretreatment
- 3. High Pressure Booster
- 4. Sea water reverse Osmosis
- 5. Post treatment
While water is being pushed through this system, they must use a high pressure pump. This high pressure pump requires a significant amount of energy, approximately 40% of the overall energy required to run it. As the water goes through, they use the pressure to create the energy required to keep the cycle going. Therefore, their systems allows for low energy consumption bringing their operations costs down significantly. The plant is able to operate at maximum efficiency per year. Currently, the desalinized water that they create is mixed with water from other sources before going to the citizens for consumption. As mentioned, their future holds changing the quality of water significantly. With lean operations, their goal of serving 80% of Israel’s water does not seem so far off.
My personal favorite visit for the trip was when we arrived at Objet Geometries. Here we met with Gilad Bet-Halevi & Igal Zeitun. Objet is a company that develops 3D printers. These 3D printers are used by manufacturers to create prototypes; they are not on the manufacturing end for products (with the exception of the dental and hearing aid industry). Their first system was shipped back in 2001 and their first distribution agreement was with Stratsay who is now one of their main competitors. Their revenue at that time was around $15M. Now, they have recently expanded their facilities by relocating their manufacturing to Kinjat Gat and their revenue stream has increased to be close to $100M.
Their target customer is larger manufacturers and businesses. As of 2010 they have switched to completely selling through distribution channels. They have approximately 100 distribution partners. Some of their agents are exclusive to Objet; however, some do sell non-competing products as well. As part of their marketing strategy, they provide the content and campaigns to the sales force but then rely mainly on the agent’s network to gain sales. When marketing themselves, they position themselves on having the latest technology. Their inkjet technology has superior print quality and material versatility. They also entered ABS grade plastic engineering in 2011 and also, they own the PolyJet Matrix technology.
Aside from the logistics to Objet, there is also a lot of character. After speaking with Igal Zeitun, the VP of Product Marketing, it was evident that Objet is a revolutionary and exciting place to work. He had left his previous job at HP to come to Objet. When asked about his experience at HP, his response was that HP has helped him develop the person he is and skills he has but he wanted a change of culture. Objet is not as large a company as HP but it offers more of the job he is looking for. However, he said that he would not trade in his experience at HP as it has helped him shape the long term strategy for Objet. I think that this shows that you should not limit yourself when finding the right career or right business. It is important to work for various companies because these experiences are ultimately what make you more knowledgeable of the field and how to deal with certain situations. As entrepreneurs, we tend to want to always dive right into starting something new, starting our own business. However, I now feel that in the long run, it may be better to start out as an observant. By working for other companies before starting your own it gives you the opportunity to observe the operations first hand of a large already established corporation. When you work for multiple companies before starting your own you are able to take the most successful strategies from each and combine them in a way that would fit the business you are trying to create.
An other strong thing I learned from Objet is specialization. It is important to do what you are best at and leave the rest to someone else. Just because you have the manpower and capability to go into an other field does not always mean you should, it could sacrifice quality. Objet, has the ability to go into the rapid manufacturing side of business, and they have started too on a small scale with the dental and hearing aid industry, but regardless their main focus is and always will be in the prototyping business. They also outsource the manufacturing of their own machines. They design, assemble, and test their printers; however, the manufacturing is outsourced. Even though this gives them less quality control on the manufacturing aspect, it gives them more time and resources to devote to their proprietary goal of developing printers for the prototyping industry.
What does our future hold due to Objet? We will have an easier and faster way to get products to market. By being able to rapidly create prototypes one can eliminate time and cost it takes for product development. Being able to see the actual product in its closest physical form allows companies to fix technical and design problems early on in the process. Therefore, as an entrepreneur, when thinking of a business to create do not just limit yourself to business that can serve the end consumer but think about ways you can create a business around making life easier for other businesses and entrepreneurs as well. Objet’s newest introduction of the desktop printer shows that they are designing for everyone and for all needs.