In the last four years since its inception, Zetwerk has created a tangible impact by digitizing the marketplace and bringing together the fragmented ecosystem. The genesis of Zetwerk emanated from the founders’ experience of managing and navigating through the gaps and challenges within the manufacturing ecosystem in their corporate jobs.
MT spoke with Vishal Chaudhary, Co-Founder of Zetwerk. He shared how Zetwerk has managed to plug the challenges—such as lack of skilled labour, productivity, lack of R&D and technology innovations, infrastructure & IP-related issues and, reluctant banks and costly logistics. The platform offers a full scale of services across categories, customers, and continents, making the company a global manufacturing network.
Please tell us about Zetwerk. How did the idea of creating a digital marketplace for contract manufacturing originate?
Zetwerk was founded by me and my other IITians co-founders Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma, Vishal Chaudhary and Ankit Fatehpuria in 2018. The genesis of Zetwerk emanated from our experience of managing and navigating through the gaps and challenges within the manufacturing ecosystem in our corporate jobs. Before turning entrepreneurs, we worked in different sectors, but we had similar roles, which entailed sourcing technology, machinery and allied resources from various suppliers which used to be time-consuming and needed a lot of research even to identify the right and credible supplier or be confident of the outcome. This led us to realize the core pain points of the manufacturing ecosystem, such as identifying the right supplier, managing spending, tracking progress, lifecycle etc.
During our initial days, we realised a lot of challenges that customers faced – at large, not being able to reach the target market due to several constraints, second being vendor supply to large scale companies with no proper channel of communication, third suppliers’ trust issues outside a specific geographical area last being the logistics and supply chain. With the idea of positioning India as a self-reliant manufacturing hub, we started bringing to life the idea of Zetwerk, which would boost efficiency, provide transparency, and make the manufacturing process faster while being quality-driven.
The team at Zetwerk initially developed a software with the idea to simplify the lives of manufacturers – buyers and suppliers. We realized that there was a significant market for customized software that could solve the problems for enterprises, especially regarding supplier and vendor management. This triggered the transformation from a SaaS player to a SaaS-based marketplace, which is when Zetwerk decided to pivot into the current business model.
How are you different from the competitors in this field? What is your USP? Â
In a typical supply chain system, a typical supplier’s book would be full of orders, which could lead to logistical issues later and affect the outcome in some form. Today the manufacturing requirement, if you see, is more diverse and deeper so meeting specifics such as delivery time, minimum requirements, and certain customization is essential. We saw an opportunity for us here. We took a step towards solving a primary end-to-end solution for our customers. We also understood that maintaining transparency was the key because customers are often in the dark about manufacturing status, and the deadlines are not met.
We have ensured that we bridge that gap at Zetwerk. To overcome these issues, we started providing collaboration tools to both buyers and suppliers in order to streamline their interactions and execution tools to fulfil the orders easily as well as schedules to host 3rd party apps and services to fulfil other customer needs. The first piece of technology we built gave customers visibility into the process of manufacturing their products. As mentioned earlier, we believe in transparency as an organization. Hence, all the stages, from the procurement stage right to the final shipment, are tracked and the order is delivered securely to the customer.
Our other USP is Zetwerk’s in-house project management tools — ZISO and ZeTracker. While ZISO is a project management tool that uploads and manages manufacturing drawings, allocates them to a PO and aligns them with a production plan. Automation and data enable ZISO to plan projects effectively by optimizing processes to reduce costs and ensure high-quality project management. Each supplier is assigned a dedicated Project Manager to monitor and update project progress on ZeTracker mobile app for the customer.
What were the challenges and how did you address them, as the manufacturing sector follows a traditional mindset? Â
Overall, if you see, Zetwerk works very closely with various vendors and suppliers. As a brand, when we initially started, we faced many challenges coming our way from a customer and a supplier point. Initially, we faced a broken supply chain system, we had to dive deep to figure out why this was happening. We all know that the market is always under volatile conditions. There are chances that customers face high demand but low output. Then there were accessibility issues regarding credit & liquidity, which usually disrupt the supply chain. If you see a typical MSME would invest in raw materials and labour before manufacturing and subsequently have to provide 30-60 days of credit to their customers, delayed payments from customers risks derailing the execution of future orders. Finding the right product fitment for customers and the right supplier was another challenge we saw.
Winning customer trust is not always easy. A new customer would not entrust us easily with their supply chain. Convincing them was a bigger challenge for us. However, we executed multiple small orders in different geographies, we built a catalogue of our capabilities, which actually helped us in winning the trust of our customers.
However, the team initially worked towards developing a structure that started addressing these issues. Like we evolved our model from just a demand-generation platform to offering several portfolio services – short-term financing, logistics and cheaper raw materials, which helped bring down the cost of manufacturing.
Further, along with our unlimited capacities and capabilities, we offer our customers purpose-built technology, problem-solving teams and project management techniques to ensure efficiency, reliability and productivity are built into every project. As we handhold, our customers through our digitized marketplace, the vagaries of the market also get minimized. Zetwerk has a dedicated team which works to identify and choose the right supplier partners for our customers from across regions such as South and South East Asia. The teams visit their factories and shop floors and evaluate their capabilities on more than 300 data points to ensure they meet the criteria set up by our customers. They range from essential things like manufacturing practices and quality standards to sensitive issues like sustainability and labour. Zetwerk has deployed a team of nearly 200 engineers who are working towards building a manufacturing operating system through which a customer can track every potential step involved in manufacturing a certain product.
How does Zetwerk help bridge the manufacturer and vendor gap?
Zetwerk is a marketplace for the manufacturing industry. We work with over 10,000 small and medium enterprises – most of which belong to small towns of India. Â Zetwerk enables manufacturers and vendors to keep creating and producing without considering the gap between the two.
Through our technology, we can give them a real-time status report of the completion of their work. Whether a supplier has received an order, started the manufacturing process, bought the raw material, or finished the painting job, our buyers can see whether the product is 70% ready or 90%. Zetwerk has brought many layers to this, like work-in-progress photos, to provide as much transparency as possible.
They have seen a massive uptick in their business after they started working with Zetwerk. Their capacity utilization at the factories has gone up from 60% to 80% – resulting in massive savings in cost overheads. Our suppliers have also seen a jump in their revenues to 50-60% after they came under Zetwerk’s umbrella.
Zetwerk has entered the coveted billion-dollar valuation club. What factors helped gain this momentum?
Reaching this milestone in the shortest time is all attributed to our customers and our engineers/employees. Our customers trust in us, our product offerings have helped us achieve this feat and we continue to expand our offerings to our customers. The heart of Zetwerk’s successful journey lies in converting the experiential knowledge of its people into a digital, software-led concept. We believe that in a brief period, Zetwerk has successfully delivered fast and cost-effective manufacturing solutions to companies globally and is constantly accelerating the digital transformation of a very traditional industry.
What are your plans for the Indian Market? Â
It has been a dream to watch India become a manufacturing hub globally, and our steps have been in accordance with that since the inception of Zetwerk. We are increasingly trying to increase our in-house technology capabilities. Our customers have end-to-end visibility on any project from PO to final product delivery. We are strengthening those capabilities to ensure the seamless, real-time flow of information. There is a specific need for every customer that needs a more personalised experience, for which we are looking at building specific capabilities in-house. A significant share of our focus going forward would be strengthening our technology capabilities. We recently launched Zet Town in Noida. The factory is spread across 50,000 sq.ft, with 16 manufacturing lines, advanced testers, and a world-class innovation lab for product development. India has multiple manufacturing supply chains across different sectors and has challenges of discovery and fulfilment, while there are capacities available in our MSMEs. We at Zetwerk will continue to develop a deeper understanding of new supply chains and strive to bring efficiency.
While we are looking at strengthening our in-house technology stack and bolstering our capabilities, the process is time-bound. It takes somewhere around 6 to 12 months to build great software and there are specific use cases for which several players are trying to solve similar problems. There are scenarios wherein it does make sense for such players to partner with us and we will be looking at acquiring capabilities that can help us address the same.
We are strengthening our capabilities in the consumer durables sector and looking at expanding our services to products such as washing machines, refrigerators, and ACs. Then we have renewables, medical devices, and the auto ancillary industry, where we have seen good traction. Some of these industries are growing fast, while others are more traditional.
Zetwerk has made three acquisitions in the aerospace and defence sector, which is considered a high-risk sector. What are the services that you are offering for this sector? Â
We want to partner with entities that share our vision to drive India’s self-reliance in manufacturing. Zetwerk provides communication solutions to Indian defence units, government research facilities like DRDO (Defense Research and Development Organization) and ISRO (Indian Space Research Organisation), and enterprise clients like Carlisle, Tata, AVTEC, BEL, and HAL. Our combined capabilities will assist the A&D (Aerospace & Defense) industry as we bring back demand for Indian manufacturing from global OEMs (original equipment manufacturers).
Zetwerk Aerosystems Pvt Ltd, a subsidiary of Zetwerk Manufacturing, focuses on the aerospace, defence, and space domain and primarily manufactures satellites, composite products, and rocket casings. The Indian aerospace and defence manufacturing ecosystem is on the verge of undergoing a massive transformation over the next two decades. With a strong push for Make in India, Zetwerk partners with critical stakeholders to catalyze a shift in manufacturing from overseas to India. Our goal in the aerospace and defence sectors is to collaborate with Indian and foreign OEMs to address the sector’s growing needs.
Mumbai-Ahmedabad (MAHSR) Bullet Train project – could you tell us more about your role in this project?
Zetwerk was required to supply 10,000 tons of fabricated girders, which support the load-bearing capacity of the steel bridges that L&T was fabricating for laying the bullet train rail corridor. The success of this project relies on our efficiency in manufacturing these girders, and we look forward to meeting all expectations spot on. We are incredibly proud to extend our support to this project.