November 2002

It started as an operational e-fulfilment company, but now MetaPack is focusing on its systems expertise, and expanding into new market sectors

MetaPack was one of the exciting new logistics companies born at the height of the dotcom boom - helping e-tailers and retailers to deliver on their online selling promise. It was assured a high profile when it won a fulfilment contract with Wellbeing.com, the e-tail joint venture in which Boots is a major stakeholder.

Around three years on, MetaPack is still very much part of the fulfilment scene, but there are some significant differences from its original proposition. Nigel Rzemieniecki, who was appointed sales and marketing director early this year, sums them up. "Two years ago, if a new e-fulfilment contract was up for tender, we would have bid for the whole job. Now we wouldn't - we'd bid for the technology part."

In effect, MetaPack has transformed itself from a fully-operational logistics company into a what Rzemieniecki calls "a technology company". It's a slightly vague term, but probably needs to be, since it includes software development and hosting, consultancy, and some residual hands-on fulfilment activity.

Why? Rzemieniecki is frank about this. "When I joined the company, the focus was still on e-commerce, but customers were saying the additional spend required by pure e-commerce activity simply wasn't available. So we needed to move our activity towards the retail mainstream."

By necessity, that change in target meant a shift in business model. MetaPack was never a major logistics player with its own physical infrastructure. Even the Wellbeing e-fulfilment operation used an existing Boots warehouse (and Boots has now taken over operational control of this). To address the much wider retail field as a whole, MetaPack needed to focus on its strengths, and that meant its software.

It also meant a sober look at how the company was structured. There was a degree of "downsizing" from around 40 staff to 25 (since increased again), and parts of the software development task were transferred to India, where costs are lower.

"We now do the coding there," Rzemieniecki says, "although we still do the technology development in the UK. In some respects this forces a discipline. Developers hate documenting their code, but the new arrangement requires a more formal hand-over of the product, so it's got to be done properly."

The company had in fact started offering its software to outside users on a formal basis last year, while it was still nominally a fulfilment company, but during this year the software has been shifted squarely to centre stage.

So what does MetaPack's software actually do? Basically the company concentrates on key fulfilment functions such as order management, delivery management, unattended deliveries and returns. It offers a modular software suite to handle all this, and can integrate it with the user's existing Web front end and back-office functions, controlling all the practical aspects of order-taking and fulfilment.

Platform-independent

The company has adopted modern programming resources such as J2EE-compliant Java throughout to achieve a fast, flexible system that is not dependent on computing platform or operating system. The Boots implementation runs on the Sun Solaris platform, but the system also supports IBM's DB2 database and WebSphere e-commerce suite. User interface is through standard Web browsers.

Integration with users' existing systems is usually relatively straightforward, Rzemieniecki claims. "We provide the system, customise it and integrate it with their corporate systems, as well as with touch points, payment systems, warehouse management systems and carrier systems. We've created 'connectors' to help us do this quickly." He adds: "Every WMS needs more or less the same data to pass in and out."

A key element in the package is a multiple-carrier management system known as DACE, which has recently become particularly voguish. In essence, it means buying selectively from a mix of carriers to achieve the best results for a given set of traffic flows - automatically balancing priorities such as service level, price, delivery time and destination. Rzemieniecki emphasises that the MetaPack approach is not to "beat up the carriers", adding: "We simply aim to play on their strengths.

"At the moment, with the recent upheavals in the parcels business, it's very much a seller's market," he says. "Within that context, we can help users achieve a blend of services that deliver improved performance at reduced cost." He points to the Boots/Wellbeing experience to support his case; the company says DACE has helped it to reduce costs by 25 per cent and improve service levels to 5 per cent above the industry average. "This is not just theory - we've proved that it works in practice."

Because carrier management is currently seen as such a hot topic, MetaPack is now offering the DACE system to users on a hosted ASP (application service provider) basis. Rzemieniecki acknowledges that retailers often prefer to host their own software, since this gives them a sense of control. But the ASP version of the DACE system has particular appeal, he says, because of its rapid implementation, which should help users bring their carrier management back under control as quickly as possible.

Carrier management can of course apply to any type of fulfilment activity, not just e-fulfilment. A further example of the company's drive to extend its target market can be seen in its work on what it calls "accelerated response centres". The exact nature of such centres could vary, Rzemieniecki suggests. It might be a "mini-warehouse" with a drive-in bay where shoppers could pick up goods they have ordered. Or it might be a local consolidation point for product bound for retail shops.

The first practical example of that kind of centre opened earlier this year on the periphery of Sheffield's Meadowhall shopping centre, where a group of retailers including Miss Selfridge, Top Shop, Top Man and Adams are taking advantage of a shared-user final distribution facility. This feeds product into the stores on demand - sometimes several times a day - freeing up floor space in the shops for retail activity. Exel is running the warehouse, while MetaPack software is managing the storage, merchandising and replenishment functions. The host company is British Land, which owns the site.

Nigel Rzemieniecki's desire to attack what he calls "the heartland of retail" is probably seen most prominently in a third target market identified by the company. This comes broadly under the term "direct despatch supply and management", and aims to help existing retailers who are seeking to extend the product range they offer through their high-street stores.

As Rzemieniecki puts it: "E-commerce allowed retailers to extend the range of goods they offered, but now the concept has moved on." What this means, he explains, is that retailers are increasingly using alternative channels to bolster in-store sales. These might include the Internet, but could equally be in-store kiosks or catalogues. Whatever the source, it often involves direct deliveries from suppliers.

Range of resources

MetaPack can offer a range of resources to help in this, Rzemieniecki says. "We can break orders down into consignments, and separate those that can be fulfilled from the warehouse from those that need to come directly from suppliers. And we can manage the carriers as well."

More and more retailers are looking at the direct despatch model, he says, "but their worry is that by doing this they may lose control." Key elements in MetaPack's technology solution therefore have to be visibility and predictability.

The package offered for this application again includes features such as order management, as well as carrier evaluation and integration, and what MetaPack calls "performance management". At its simplest level this means consignment tracking, but it also includes service-level monitoring, "and in some cases we're prepared to put an element of our fee on the line over this," Rzemieniecki says. "It's a token of our commitment."

Alongside these key market initiatives, MetaPack has also taken on increasing amounts of multi-channel retail consultancy, winning new business with customers such as Dixons, Marks & Spencer, WH Smith and Zendor. In fact overall, Rzemieniecki says, "the company has more new business in the pipeline now than ever before."

Rzemieniecki certainly has all the right credentials to be leading the change that is sweeping through MetaPack. His history is in the retail and software market; he joined from software house Sapient, and had previously worked with ICL and POST Software International. Particularly pertinent is the fact that he had been working latterly on new consumer channels such as store-based initiatives and the Internet.

So is the MetaPack of today the same one foreseen in the vision of Michael Hall and Patrick Wall, the two young entrepreneurs who dreamed up the company three years ago? It's hard to resist the feeling that it is. It may not be majoring on operational fulfilment, but technology was always its forte, even in the early days. Arguably, by divesting itself of the complication of running fulfilment itself, it has been able to focus more clearly on new concepts to make it work better.