Moving Ahead

Published on: Globes, Monday, July 1st, 2002.
Author: Zehava Dovrat

ProductNet is a unique project, initiated by the Israel Industry & Labor Association and ZOOZ Marketing Consulting & Management. It offers small and medium-sized businesses a way to confront the recession through creativity. Small and medium manufacturers, which up until now were mere subcontractors, can develop a new production line through this project and market it to giant retail chains in Europe and the United States.

According to Zfia Gilat, Head of the Industry & Labor Association, the first stage of the program enables manufacturers to get acquainted with the market and their own production capacities. "Next, we hold joint thinking sessions with the factory's owner and business consultants to discuss the specific market's product lines, so that they fit the manufacturers abilities. Subcontractors are usually dependent on another party - especially those who work regularly with one client, which orders repeated jobs. The new project encourages them to seek independence and promote a new product line out of their products. This doesn't require any revolutions". ZOOZ consultants are assigned to each participating business, and serve as marketing personnel and product designers of the new product line. "The idea is to turn Israel into the Silicon Valley of the DIY (Do It Yourself) industry", adds Ari Manor, CEO of ZOOZ.

Every manufacturer wishing to participate in the project needs an initial capital of 100 thousand dollars. The professional consulting is partially funded by government support programs. Gilat is certain that it will be possible to come up with the necessary funds from the budget for small business guidance and mentoring. She promises: "There will be support. We are working with Yohanan Levi, the Deputy CEO in the Ministry of Trade & Commerce. ZOOZ works with them too, and we have been assured of a budget for the project. They have a budget for mentoring as well. The Association often assists in consulting for management, marketing and product line adaptation. The business-owners themselves will have to evaluate the advantage of the required investment. You must understand that they have alternative ways of action, and this is a worthwhile bet".

Gilat emphasizes that no one is automatically admitted to the project, "but rather goes through a process of consultation, examination of abilities and horizons for success. If the idea is feasible, and if the tools are there and all is needed is market research - then the effort should succeed. We do not intend to change the manufacturer's equipment, but rather their state of mind.

Gilat believes that this is another solution that may assist in overcoming the recession and economic crisis that is taking its toll on small and medium-sized businesses. "Especially today, one must use business creativity, and this project enables a factory owner to become a global manufacturer within six months and increase their target audience, profits and revenues.

One of the firms that joined the new project is Guy Plastic, which makes plastic injection products. "The project can turn the business around", says Boaz Zar, CEO. "Until now we have conducted an analysis of the facility's capacities and of the product, we've made some adjustments and are now in the product development stage, and we hope to succeed. This is a major springboard for growth".

Guy Plastic from Holon used to employ 25 workers and mainly produced technical engineering products for some 60 clients. According to Zar, most of the money invested in the new project is from the firm's own capital. "We may be eligible for a grant, but we are not counting only on that. A firm should always think of the next change, or it has no right of existence, particularly in the current state of affairs".

At this stage Zar prefers not to reveal the details of the new product. "We decided to use our production means and produce something in a field we've never entered before, a consumer goods product. The product is due to launch in six months, and the ZOOZ team is helping us in the thinking and marketing process. We already have potential clients interested in the product, particularly overseas. The investment is somewhat larger than the initial sum, but there are several potential investors. If we have to increase the investment, we'll obtain it from them. If the project succeeds, we will also recruit more employees".