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On episode 3 of the Future of Supply Chain Podcast, Sean Henry, Co-founder and CEO of Stord, sits down with us to discuss the future of warehousing. Prior to Stord, Sean worked at a manufacturing company where he was exposed to the largely analog operations of supply chain partners and as a result, the massive opportunity in supply chain technology. Teaming up with his co-founder and CTO, Jacob Boudreau, they launched Stord in 2016 determined to improve warehousing. Below are key takeaways from our discussion.
Warehousing is one of the longest standing industries and is currently going through a massive shift. Companies are trying to focus on three major things: asset optimization, increased velocity, and data driven distribution. In 2002, 57% of enterprises only held product in their own distribution centers. In 2012, that dramatically decreased to about 13% of enterprises only holding product in their own distribution centers. 27% of companies held some sort of product, but the majority of it was held in 3rd party warehouses.
A large, highly-fragmented industry. With about 9,000 warehouses across the U.S., approximately 3,000 of them are owned by 60 companies. The remaining 6,000 are owned by thousands of different “mom and pops” and owner/operators. In total, the third-party distribution and warehousing is a $160B+ market.
Most warehouses in the US are operating without technology. Roughly one-third of warehouses in the US do not have a warehouse management system (WMS). There is about $13 trillion of product moved through warehouses a year, and somehow most of them are operating without any systems or software at all. Stord provides their warehouse network with software capabilities to strength their 3PL service operations.
Stord created a network of software-enabled warehouses. Stord is a single online platform that allows companies to access a nationwide network of warehouses that can help them warehouse and distribute product. Similar to AWS, Stord allows a supply chain team to flex their warehousing and distribution footprint up/down in a manner that’s aligned with their business needs. Customers can also use Stord for inventory management, order management, analytics, and to request warehousing services. Sean and team are proud of being the best-aligned partner that improves efficiency, flexibility, and scalability for their customers.
There is ample opportunity to decrease quantifiable waste. Companies in the US can reduce annual warehousing spend by $20B+ if they are empowered with the right systems, intelligence, and warehousing partners. There’s increased focus on last mile distribution, warehousing efficiencies, inventory holding costs, and inventory repositioning. It turns out that enabling and networking the 6,000 independently-owned warehouses has massive benefits to driving a more flexible and dynamic supply chain.