In such intensively competitive markets as fast moving consumer goods where the integrity of a brand can easily be compromised by poor delivery and customer dissatisfaction, a key factor for success is the reliability of logistics operations.
But increasingly, as logistics service providers offer additional services does it mean that consumer goods producers need to outsource their logistics and outsourcing to bigger operators? Is there an alternative offered by what might be described as a more personal service backed up with traditional family values?
Perhaps one company, PDS International, offers answers. It might also provide a benchmark about how to apply a focused specialisation that enables it to stride the bigger business stage with confidence.
The Warrington-based, family-owned, third party logistics supplier (3PLs) has built its business through dedicating its resources on the non-food, non-chemical consumer goods markets. It specialises in customising clients' stock to be presented in ways that are required by different retailers and stockists, often involving many different versions of same product depending on the needs of individual retailers.
PDS believes that the wealth of knowledge and experience it has developed puts it in an excellent position to satisfy each retailer's exact delivery requirements and it attracts new business because of that reputation. With the exception of manufacturing, marketing and sales, the company provides all the other services required by companies in consumer goods markets.
The company handles every type of distribution from pallets and loose cartons, to home delivery direct to consumers and, in establishing its success, PDS International has never wavered from a philosophy that places service and speed of response at the top of the agenda.
And like all close, mutually supportive families, PDS has found that it continues to grow. Its operation in north west England embodies nearly 500,000 square feet of racked, block stacked and shelved storage and processing space in a variety of warehouse and distribution modules. PDS emphasises the high security of its premises and IT and it believes its UK and European supply chain management services have a distinctive strength based on close working partnerships established over a number of years.
Prominent amongst its clients is prestigious American Corporation Conair Conair supplies electrical consumer goods including the BaByliss brand of hair care products.
The Conair business that PDS has sustained in the UK for 13 years is striking. Conair is a global company and the UK is one of the few regions in the world where it outsources logistics and distribution.
PDS routinely achieves Conair's 99.85 percent accuracy target (impressively sustained even when PDS relocated, involving a 14-week transition period). Their partnership reaches far beyond the normal supplier-client relationship, involving a more intimate understanding than is perhaps typically the case elsewhere.
David McClelland, son of the founder John McClelland, works alongside his father in the family company as commercial director.
He commented: “The real difference with our service is that client partnerships extend beyond the management teams. They are forged between all key personnel with varied operational responsibilities. A transport manager will often have a regular dialogue with all our clients' warehouse managers.”
Consequently, although completely separate companies, the effectiveness of their close working methods means that PDS is regarded by Conair, as an integral part of its business family and it is a crucial component of its operation.
Tony Mann, Conair's UK operations director, said PDS is always willing to go the extra mile and it views logistics problems as challenges to be overcome – and it usually succeeds.
He quoted one example where PDS took delivery of half a million small cartons of hairclips for UK distribution that had incorrect barcodes. The company promptly opened each carton, added the right barcode, resealed the cartons and completed distribution with minimum disruption to Conair's customers.
Conair's goods, including hair dryers, curling irons, straighteners, hair setters, hair trimmers and other personal and homecare products. All are handled by PDS en route to all leading UK retailers.
PDS's weekly shipping list includes Argos, Boots, Makro, Costco, Dixons, Superdrug, Boots, Amazon, Matalan, John Lewis, TK Maxx, Tesco, Asda, Sainsburys, Morrisons, Comet, Currys, Dixons and B&Q, amongst others. The company also delivers to smaller local independent retailers.
As well as standard distribution, warehousing, quality control, scheduling and personalisation services, PDS provides such added value services as returns, reworks, packaging and labelling, heat sealing, over boxing, customer service, fulfilment and invoicing. It even undertakes product testing if required.
Another client, Lifestyle Marketing International, uses PDS for UK logistics, distribution, warehousing and order processing and looks on the firm's range of services as a menu from which it can choose exactly what is needed. Lifestyle Marketing's sales director, Richard Webb, explained that the company is a relatively small client of PDS but he and his colleagues wanted to work with people who know the business.
He continued: “We supply the usual retailers and mail order, online and shopping channels. Because PDS has huge expertise dealing every day with all the major retailers, I can trust them. They have repeatedly shown that they really have the interests of my business at heart. They have a hands-on approach and are marvellous. Even though we are a small part of their business we are given the same top quality service as all PDS customers.”
Mr Webb added that as Lifestyle Marketing is an online business it imposes different parameters on logistics operations compared with a traditional trading operation. The company has to take individual orders and fulfil them by delivering to individual consumers.
He said: “PDS listen to what we say, act on it and, where they think it is necessary, provide alternative recommendations to tailor a service to precisely what is required. They never said “this is what we can do” but asked what we wanted and took steps to ensure they could fulfil that. PDS adapts to what is required and will invest to fulfil that need if necessary.”
Typical of such advice would be guidance on making pallet loads more cost-effective with more products per load, thereby reducing the volume of pallets used, as well as reducing the amount of journeys, even though it means reduced income for PDS.
Flexibility and open-mindedness is firmly rooted in the founding principles of PDS. John McClelland came from an electrical wholesale business where he helped establish a warehousing operation for his employer. In starting his own business he did not want to try and be a jack of all trades, so avoided having his own haulage because he views transport as a specialist industry in itself, so third party suppliers of a specific nature were carefully selected. Strong and proactive partnerships have been developed over the years.
Most of those partners are headed by owner-managers. They include the haulier, R Swain and Son, which is run by the grandson of the founder, and Porter Packaging, which is family run by Brian Porter and his wife, and provides PDS's 'packaging department'.
David McClelland explained: “Owner-managed companies have a different view of business. Their personal stake is very high. They ensure their stamp of quality and their philosophy runs through everything they do and is ingrained in the attitudes of all their staff as a natural extension of the family ethos.”
PDS also realises that modern technology is vital. David McClelland has implemented PDS's own management and control systems, having a solid background in developing and implementing IT tools for business. He previously worked within the IT departments of such high profile companies as the BBC and UCI Cinemas.
An important part of his role is to support client relationships through business systems development. The company uses EDI lines that can be integrated with the systems of its clients to provide real-time management reports. It also uses Mandata' traffic management software, as does Swain because transferring traffic diary movements is easy. The system includes customer-specific requirements, such as which door a delivery should be made to at a customer's premises and the name of the person tasked with dealing with the order.
PDS monitors developments in order tracking, bar coding and RFID for possible future implementation, information which might also be accessed by clients. Swain is also investing in trackers for its vehicles so that their locations are visible on-screen, on demand at any time by PDS.
Commenting on his perspective of a competitive market, David McClelland observed: “There must be other companies like us but we don't know who they are and neither do our clients. We know we need to differentiate our service by adding value throughout, so we make it easy for our customers to do business with us and we deliver.”
But the ultimate test of any logistics relationship is the contribution to commercial success the supplier makes.
Lifestyle Marketing's Richard Webb explained: “PDS is providing key business services. I can win new business contracts and have total faith in PDS's ability to deliver on the operational side. ”
In similar vein, Conair's Tony Mann observed: “PDS's knowledge, its ability to improvise, innovate and do the simple things well, has helped Conair build a significant and growing base in the UK. We are confident that our enduring relationship with PDS International will continue to provide the perfect springboard for our success.”