“We want to build the manufacturing ecosystem for the world” is the thing I clearly remember from the first meeting with Amrit and Srinath in the summer of 2019. I recall the goosebumps I and Dev felt leaning over a Polycom, dialing in from a conference room in Lightspeed’s office. While Amrit and I had known each other through our work at McKinsey in the Valley, this was the first time I was meeting them as Zetwerk.
As I now reflect sitting in Lightspeed’s Menlo Park office, it is ever clearer to me that Zetwerk is well on its way to becoming the “Amazon of manufacturing.” Zetwerk started with serving industrial customers with steel fabricated parts. Over time the platform has extended its footprint across multiple manufacturing sectors — Oil & Gas, Aerospace & Defence, Precision Components, Renewable Energy, Consumer Electronics and Apparel. If something needs to be manufactured, Zetwerk can do it. In the last 12 months the platform delivered over $1B of gross merchandise value for customers across the US, Europe, Middle East, Asia and Australia with a supplier base across SouthEast Asia and India. So, what does it take to build a global manufacturing company?
Reliability matters most
Zetwerk co-founders operated large factories before. While commissioning new projects — in their ordering parts to set up a new factory — they experienced firsthand the anxiety buyers experience when the project is close to its delivery date. After weeks of waiting, a single supplier error or a single wrong part could delay the entire project. Imagine if you ordered a book off Amazon and you got a call a week later saying the book is not available!
Therefore on-time and in-full delivery or OTIF is the north star of the company. Zetwerk is consistently able to deliver 80%+ OTIF in an industry where the average is 30–40% through its intelligent supply chain. While the conventional wisdom is that internet marketplaces “dis-intermediate” layers between buyers and suppliers, Zetwerk chose to “step into” the supply chain to guarantee trust and reliability for buyers. The platform goes one level further and creates real-time visibility for buyers into project milestones through its project management and tracking software deployed across shop-floors of small suppliers all over the world.
Intelligent supply chain
Supplier discovery and matchmaking: In the 21st century buyers frequently rely on word of mouth and time-consuming RFQ process to discover suppliers. Zetwerk is building an incredibly wide catalogue of suppliers across attributes such as historical performance, installed machinery base, process and product expertise as well as credit worthiness. Because of such granular information the Zetwerk platform can match-make each order to 10+ suppliers, thereby increasing speed through parallel processing and eliminating single points of failure.
Intelligent routing: From procurement of raw material to finishing the final product could involve anywhere from 5–50 steps. The Zetwerk platform intelligently routes each manufacturing step to the most optimal location. So, for example, if you order a sheet metal part in North America, the steel may be purchased in India, the part may be machined in a CNC Machine Shop in Mexico and the final surface preparation / painting may be done in the USA. This agile supply chain offers unparalleled speed/cost and eliminates any geographical dependencies, helping buyers sleep well.
Technology
This is the real backbone of the platform. Take pricing and quoting for example: every part delivered is ‘unique’ and buyers use PDFs to communicate designs with suppliers. Recall the blueprint of your house that the architect shared? Imagine using a similar blueprint to manually estimate the specifications and costs to manufacture each part! No wonder errors are remarkably high in this industry. Zetwerk’s instant quoting engine for metal extrusions has slashed the time for quotes from several days to a few minutes.
Similar technology application has solved problems of project management, production planning, inventory management, quality assurance at different points of fabrication as well as invoicing and cross border shipping. Over time the same toolchain would power assessments of carbon emissions and sustainability.
Ecosystem
Zetwerk realised that it can succeed only if the suppliers on the platform succeed. It adopted an ‘ecosystem’ approach to provide crucial materials and services to suppliers in an asset light manner — it operates a marketplace each for purchasing raw material (think steel, alloys, fabric, consumables), unlocking working capital from banks, 3rd party logistics as well as shop-floor equipment.
Partnerships and acquisitions
Zetwerk is proactively building partnerships to add manufacturing expertise, proprietary designs and certifications to its global base of factories and shop-floors. Today, the company announced its acquisition of Boston-based Unimacts to expand its services to the renewable energy industry in the US. With a world class team, strong balance sheet and top investor base, Zetwerk is indeed building the “manufacturing system for the world.”
Did I tell you that Zetwerk started off as a b2b enterprise software company and made three pivots to its operating model?! Following Zetwerk’s footsteps I’ve relocated to Lightspeed’s Menlo Park office to expand my investments behind game-changing b2b startups. If you’re building a b2b startup in the US, I’d love to hear from you at vaibhav@lsvp.com. There’s lots more to share with you on Zetwerk and my learnings from other b2b rocket-ship companies like Glean and Innovaccer!
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