Pat Henry: This is Pat Henry, WhatTheyThink. Today we are at Indigo's manufacturing center in Kiryat Gat, Israel as part of their VIP commercial event and with us this morning is Mr. Yoram Krivine. Mr. Krivine is operations manager, Indigo Division. Thank you.
Yoram Krivine: You're welcome.
Pat Henry: Thank you also for the tour that a number of us journalists and analysts were on this morning. You manufacture -- do final manufacturer of presses here. You manufacture inks. Can you tell us a little bit about the history of the facility? What you do here?
Yoram Krivine: Well, we started the facility in 2004. It was a green plant facility we could design exactly to our specific needs. As I explained on the tour, we designed the facility for maximum flexibility to accommodate the very changing demand driven short-run color digital printing and this whole facility is designed around these principals of the lean principals to provide maximum flexibility.
Pat Henry: Can you say a little bit more about the application of the lean principals. You know Japanese inspired you do Kaizen events here. How was that applied to your manufacturing?
Yoram Krivine: So we began that process in -- roughly 2001. We've decided to implement that process to improve our manufacturing facility. We've visited the two other plants in Japan, which were the leader in implementing the lean methodology. We went to the lean school in Japan that teaches that methodology and we implemented it in all our plants through rigorous training and change of mindset and change of the facility -- the flow of the material inside the facility. It's called value stream mapping.
Pat Henry: Right.
Yoram Krivine: You create that -- the best map of move of the product through the shop to optimize the -- and minimize the cost of the production and we also managed to achieve a lot of savings in duration of the making the machines that we make in the line.
Pat Henry: Now we saw two parts to the plant today: we saw the ink mixing facility and then we saw the assembly area where the presses are completed. Please talk a little bit about the ink mixing facility and what happens there.
Yoram Krivine: The ink mixing or the ink plant?
Pat Henry: The ink plant.
Yoram Krivine: Okay.
Pat Henry: Okay. Thank you.
Yoram Krivine: The ink plant. Because there are two -- you've seen them both.
Pat Henry: Right.
Yoram Krivine: The ink plant is -- was found in 2004. It's an Indigo developed process for specifically example the electroink developed since the early 1980's by **** and this is a process in which also continuously evolves and improves as we improve the cycle time that we need for processing the ink. In that processing of the ink, we actually embed pigment into resin. Through a certain profile of grinding and temperature we created the right size participle and that creates the ink can that goes into every machine around the world. We just have several inks for several different product lines.
Pat Henry: And you have an identical plant in Singapore, I believe, where the same procedures are followed.
Yoram Krivine: Correct. Exactly the same. Even the same building specs. Everything was done exactly the same. So that the ink is exactly identical -- it doesn't matter where it comes from.
Pat Henry: And on to the press manufacturing facility. I believe that the side frames, the feeders, some other components are provided by contractors. And what components are developed here and how do you bring it all together?
Yoram Krivine: Correct. So, we develop everything here, through the RND Department but we actually use all the contract manufacturers and large suppliers to provide large component of the machine and really do the final assembly integration. That's why our assembly process is fast and quick.
Pat Henry: Right.
Yoram Krivine: It's not that complicated. And we found out that the best contract manufacturers that can provide us the highest quality and the lowest price, we'll go there. Regardless of where it is around the world. We do try and keep second associates for critical elements if we can, but not always do we need to. And we try to optimize cost at the standard -- at the quality that we require. So if the cost is cheap but the quality is not there, we will never go there.
Pat Henry: And finally was made clear to us that is a JIT, just in time manufacturing facility. Presses aren't manufactured if they aren't on order, so I'm just wondering if you could contrast say your order volume between now and this time a year ago, just to give us an indication of --
Yoram Krivine: So, we actually ended our Q4 08, which actually ends October 31 and it was a very, very strong quarter. We had a huge volume, although we did anticipate a reduction in Q1 09, our Q1 09 which is November/December/January, we actually saw the deep fall because of the financial crisis around the world. So we had to adjust ourselves, like sales manufacturing quantities downward significantly, and for what we call H1, our first half of 2009, we were very low and eating at all the inventories that we still had coming into the crisis. And 2010 looks much better; we are back to the over the quantities that we made in 2008. So things are looking very well in that respect and we've depleted our inventories to very low levels. So 2009 was a dip, not horrible but the dip and then we've made the correct adjustment to come out of it prepared for 2010.
Pat Henry: Well we're very happy to hear that you have experienced the rebound because that would indicate that perhaps other parts of the industry are on the rebound and, again, thank you for the tour and thank you for the information.
Yoram Krivine: You're welcome.
Pat Henry: Okay.
Yoram Krivine: Hope to see you again soon.
Pat Henry: Pat Henry, WhatTheyThink. Thanks for watching.
