A phygital solution for spare parts

A phygital solution for spare parts

For far too long, the construction sector has been pockmarked with technology hesitancy. This was disrupted by the rapid tech adoption that organisations globally were driven to in a bid to keep their operations running. Yantralive is a digital platform that uses tech as an enabler to provide the ri...

For far too long, the construction sector has been pockmarked with technology hesitancy. This was disrupted by the rapid tech adoption that organisations globally were driven to in a bid to keep their operations running. Yantralive is a digital platform that uses tech as an enabler to provide the right equipment and spare parts to its customers. Incepting a phygital solution With his robust background in the construction industry, Kumar Palangappa, one of the seven co-founders of Yantralive, identified the gap in the equipment segment for services to get machine backup or source spare parts. The solution took a form that,as Ajay Anand, Co-Founder, elaborates, is called HEOS: “Heavy Equipment Ownership Simplified.” Broadly, the startup caters to three owner categories: 1. Large corporates who typically get contracts from government and usually buy their own machines 2. Fleet owners who own a certain number of machines that they rent out or undertake work on their own 3. Individual owners, who are typically rural entrepreneurs, with one or two machines. “The problem for all of these owners, however, is the same,” he says. “Irrespective of the work, the machines keep breaking down and they need access to service engineers and spare parts.” Breakdown time especially impacts individual owners as their machines are the sources of their livelihood. “We come into the picture here with our phygital solution,” Anand explains. “We go to the location where the machine has been deployed to provide both the right service or the right spare part at the right time and have the machine come back up as quickly as possible.” Challenges in building a market presence While technology adoption in this sector was a challenge, Vikram Joshi, Co-Founder, believes understanding their customers' hesitancy helped Yantralive address their concerns better. The next challenge was the lack of understanding of machine builds and spare part information within the target audience. “People do not know the proper make of their machines,” says Joshi. “We usually get a query for, say, a malfunctioning hydraulic pump with a couple of images attached.” This helped the team develop a process for proper part discovery. Going a step further, the startup had to understand the lifecycle of the spare parts with respect to the lifecycle of the machine and customise their offering based on the data. Today, Yantralive allows its customers to buy basic parts by adding to the cart and checking out, but also allows them to reach out with multimedia to seek assistance in part identification and procurement. Anand adds, “In addressing these challenges, we deviated from an Amazon model because our users did not know what they wanted to buy.” Augmenting part discovery with a strong knowledge network has enhanced and shaped the platform to solve the problem by reaching the root level. Streamlining processes with IoT With an aim to reduce machine downtime, the startup worked on moving from a reactive service to a proactive one. By digitising their catalogues, Joshi discovered that the machines provide a lot of data. “Using IoT to capitalise on the predictive analysis from the collected data, it is now possible to inform customers about issues like overheating or a possible malfunction or machine breakdown and offer an intervention instead of fixing it from scratch.” This paradigm shift to proactive maintenance goes a long way in boosting equipment productivity. “Today, there is no scientific way to deploy an exact number of machines needed to complete a large-scale project,” says Anand. “This is why contractors generally use a back-of-the-hand calculation and deploy a certain number of extra machines. With IoT, it is possible to increase machine availability from 60 per cent to 90 per cent. So, instead of deploying 100 machines, one can rely on 75 machines.” The business model The business model primarily depends on reaching out and establishing contact via digital platforms like Facebook or Whatsapp, wherever their customers are. Next is understanding their requirements as well as possible through communication. Finally, for last-mile fulfilment, Yantralive has a dark store in Bijapur, with warehousing and inventory management happening from Bengaluru. Its supply network includes manufacturers and suppliers specialising in providing the most critical parts, as well as field sales personnel who are available at the roots for local people to reach out – especially for those not adept with technology. Additionally, there is a final component tying their model up. Anand elaborates, “In the case of individual owners, most don’t get paid on time and, hence, are unable to secure funds. To address that, we have integrated a fintech solution that allows these owners to take a loan based on their credit scores.” All this helps fasten the equipment ownership process. “Most commonly occurring problems have fortunately already been mapped,” he adds. The startup has leveraged its prowess by discovering uncommon problems and codifying every solution so as to easily have it available in case the problems repeat. Procuring quality used equipment While sourcing the right machine is a challenge, the bigger challenge is the unavailability of a platform that offers equipment customers a trustworthy source of procurement. “We bring our expertise by offering our knowledge of spare parts and the services needed to help source a machine and inspect it,” shares Anand. “It is a replicable model that allows us to price the used equipment and sell it.” Dubai and Africa have a big market for used machines and look to India for that. Yantralive has also provided used machines to countries like the UAE, Vietnam, Azerbaijan and Sudan. With equipment changing so many hands, quality is of paramount importance. Joshi shares that initially they followed a qualification-based process. “But being a data company, our focus was to use big data to learn from each experience,” he says. The startup uses analytics to learn from each transaction. The historic data collected is run through a ranking algorithm to prompt customers to suppliers with the best credibility. “We get orders from Brazil, Estonia, Hungary, Germany – and these are orders looking for extremely specific parts,” he adds. “They find us through Google search.And without any marketing effort, we have managed to cater to these countries owing to the technology we have built.” Going ahead The startup recently received three rounds of angel funding from BigBasket’s Vipul Parekh. “This funding has helped us establish our market presence, build our technology and acquire the thousand-plus customers we have worked with,” Anand says, adding that they are looking to acquire Series-A funding to take off. Headquartered in Bengaluru, the startup has a presence in Mumbai, Pune and some parts of North India. Southern states, including Maharashtra, are currently the largest revenue drivers for the startup. Going ahead, there is an expansion point planned in the UAE as part of its global expansion. Category expansion is also a dimension the startup is looking at. There are about 1.5 million construction equipment in India growing at a CAGR of 15 per cent. Yantralive crossed the milestone of becoming a 1-billion company in the previous quarter, aiming to grow by higher double-digits in the next three quarters. The pandemic, while acting as a propeller, has also enhanced Yantralive’s preparedness. “We have built a strong digital brand presence so that our customers can reach out to us from anywhere,” says Anand. A challenge would be to continue facilitating sourcing in case of another disruptive event like the pandemic, but he remains confident that their business will never come to a standstill.

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