Lightbulb Moment

Zupplychain was launched in February 2016, after some years as a pipedream for its founder, Chris Hopkinson. Chris' background has included being a pilot in the RAF, working in the city, founding and running a kitchen and bathroom distribution business and as a non-executive director and major shareholder in the appliances e-tailer, AO.com.

It was the latter two - distribution and e-tailing - that inspired Chris to have the idea of Zupplychain, which he originally christened 'Pallet hotel', by bringing together the practical issues faced by a business with large stock levels and the ability of the web to allow 'market disrupters' to flourish if their visions and technological platforms are ambitious enough.

Mark Two, the kitchen and bathroom distribution business that Chris ran with his brother, had 300,000 square foot of storage space, up to £10m of stock and 1000 regular trade customers. 'Kitchen and bathroom products are notoriously difficult', says Chris. 'Physically they can be quite 'ugly' to store - particularly bathrooms. Both industries innovate at pace, proliferating SKUs whilst older products often staying in the range for product guarantee reasons. Demand is seasonal and, in some channels, promotionally driven and unpredictable; major range changes can often lead to dual running stocks. To top it all, in-bound lead-times from component manufacturers, usually in Europe, China or Turkey are long - 4 to 12 weeks - but lead-times out to trade customers - kitchen shops- are a matter of days'.

'Inevitably, with all of that, it's an industry where one can end up with too much stock or - at the opposite end of the problem - too much space. The first problem was usually solved by ringing a handful of the usual local options for over-flow storage,' Chris continues, 'With a sense that prices might not be the best or that moving the stock problem 'round the corner' rather than to a strategically thought out location was a poor man's answer'. What to do with empty space in the other half of the cycle was also a challenge for his distribution business that Chris never found a sufficiently satisfactory solution to.

So the concept of Zupplychain grew out of the sense that across the warehouse community - be that 3PLs or the warehouses across the country operated by manufacturers and distributors - needed a market to better match the 'over-spaced 'with the 'under-spaced'. Of course, this is what 3PLs do in the usual course of business of serving existing customers and finding new ones, but it seemed a market that wasn't liquid. Many 3PLs have a handful of long-standing customer who make up 60-80% of their capacity - Chris felt the Zupplychain concept could help warehouses fill the rest of their space more quickly and easily. And that much of this would come from potential customers who did not generally consider 3PLs, and - like Chris - addressed short term warehouse space problems with makeshift, local and traditional solutions; and long terms one's by building or long leasing another warehouse.

However, the vision for Zupplychain goes beyond helping the warehouse industry match space for pallets and pallets for space. Right from the beginning, the idea of creating a 'warehouse management system in the cloud' has been integral to the development of Zupplychain. Zupplychain's role in solving problems of over-stock is just a sub-set of its real goal - to enable businesses to fully outsource their warehousing and logistics functions (as many of the largest retailers do) and concentrate on what they do best, be that manufacturing, sourcing, product development or sales. Zupplychain's pallet database - which will be launched together with Zupplychain's search facility - is the first module in providing businesses with the ability to manage all their stock on line in multiple storage locations and the on-ward movements of that stock. 'We want to help business to consider not building new warehouses as they grow - a fixed cost that starts too big for requirements and some years later ends up too small. Instead, Zupplychain facilitates more businesses to go 'shared-user', and to put their stock in more strategic locations than their own yard', explains Chris.

In the last couple of years, Chris has sold his distribution business and floated part of his stake in AO.com, (though he remains a non-executive director), giving him the time and funds to turn the Pallet Hotel idea into the Zupplychain reality. In late 2014, he brought in Martin Elgood as Managing Director and started the research and then the development phases, culminating in further employees and a live site for storage provider registrations by February 2016.

'We have plenty of plans for Zupplychain, both in terms of product width and market depth, and have built a platform with the scale to achieve that, both in the UK and beyond. But first, I'm looking forward to us launching the search facility in May and bringing together warehouses with space and pallets needing space'.