March/April 2003

Prolog is one of the fastest-growing fulfilment businesses, and after visiting its extensive base in the East Midlands, Peter Rowlands came away impressed

If you're not prepared for it, your first visit to Prolog's base at Sherwood Park, Mansfield will feel little short of surreal.

Imagine arriving at a smart, well-manicured business park set on a shallow hillside. There are a number of separate business units ahead of you and to the sides - all substantial plots with gleaming modern office complexes and warehouses of up to 100,000 sq ft. Each one is a discrete, self-contained facility. Yet inexplicably they nearly all seem to be occupied by the same organisation: Prolog.

The company's presence here is dominating, and at the same time teasing. The confident yet discreet Prolog name on each facility declares that this is a major company - one you should know well. And you find yourself wondering why you don't see it more often in other locations.

The answer is that you will if you go to Sudbury in Suffolk or Haydock in Merseyside. These are the company's other main bases. Its headquarters are in Sudbury, where it was started in 1981, but in terms of size that base was overtaken by Sherwood Park several years ago.

Yet although none of this is a secret, Prolog has always resisted any inclination to shout over-stridently about its capabilities, preferring to promote itself in subtler ways. We at e.logistics Magazine were therefore delighted to be invited to see its Mansfield base, and when we got there we weren't surprised why. It's simply impossible to come away without talking in superlatives: and here we are, doing it.

Prolog may have kept a relatively low profile, but the fact is that it's been a major player in fulfilment services for many years, and has recently also been stepping up its presence in the call centre business. As the Mansfield site makes clear, it's a substantial company; it has nearly 1,000 permanent staff (plus up to 300 casuals), including 600 in four call centres, 750,000 sq ft of warehousing, and a turnover of around £33 million.

The layout of the Sherwood Park base, with its five discrete facilities, arose partly from an accident of history. The company opened its first unit there seven years ago, attracted by its central location, the availability of labour and the fact that it lay in an enterprise zone. The other four units have been added progressively in the years since then. So inevitably they were developed as separate facilities.

However, that separateness has also been fostered by design - and is reflected in the fact that Sudbury is also configured as separate units (two in this case). As commercial director Guy Smith puts it: "Having separate sites is exactly what we wanted. A smaller unit is more configurable for our clients; parameters can be defined more clearly. That gets harder as premises get bigger. In a smaller unit, customers feel like a big fish in a small pond."

He says it is also important to deliver all the relevant services under roof - "including account management, front-end services like call centre and bureau, and warehousing."

He admits that the inevitable duplication of some resources "does cost money," but argues that this expense is worthwhile. He also accepts that cross-fertilisation of staff can be harder to ensure with separate facilities, even when these are on the same industrial estate. "But we have a policy of secondment between bases, and move management around so that they're ready to meet the next challenge."

Prolog has had various owners and identities in its 22 years. It was acquired by the AGB group 14 years ago, and then passed to the Maxwell group and traded as AGB Prolog. Around twelve years ago it was acquired by Sir Bernard Audley and Robert Audley (the current managing director), and taken private.

The name Prolog originally stood for "promotional logistics", which gives you a good idea of its heritage. It started out handling the transport and warehousing of promotional materials, then added order-taking and call centre management in support of existing customers.

Since then the portfolio has been extended into a complete end-to-end solution, not just for promotional and point-of-sale materials, but also for products sold by e-tail or direct mail. Prolog takes orders, processes payments, handles reconciliations, holds stock, ships product and handles returns. It also has a comprehensive customer service capability.

"What really moved us forward most rapidly was a growth in call-centre activity," Guy Smith says. This was given a notable boost by growth of a long-standing contract with British Airways, which is handled from a self-contained site at Watford. The work includes handling customer contact for the BA Executive Club.

Spurred on by this experience, Prolog was able to take on a succession of contracts with public-sector clients such as the Department of Education and the Home Office, involving delivery of literature and requiring major pick and pack operations. It also took on a major commercial-sector contract with Gold Shield Pharmaceuticals, which remained a customer for over eight years before finally changing policy and taking the work in-house.

"Winning that contract was a big turning point for us," says Guy Smith. "At the time Gold Shield's whole proposition was built on the basis of outsourcing. They did the marketing and we did everything else." He says the contract was "quite an education," involving small margins and very demanding service levels. It also required call handling, reinforcing Prolog's expertise in that area.

One thing that has already changed since that contract is the nature of typical consumer interaction. "The Gold Shield work included call handling," Guy Smith says, "but 70 per cent of orders came by post. Over the past three years, we've supported an increasing number of multi-channel operations."

As a result, he says, Prolog handles very little "white mail" now. Most communication is by telephone, but an increasing amount is email- and Web-based. Consequently the company has built up extensive expertise in automated email response, and it designs and builds entire Web sites for customers. Among those taking advantage of this service have been Government departments and the Science Museum.

"One of the keys to doing this effectively has been to build up a substantial in-house development team," Smith says. "That means we have the resources and skills to develop specific solutions for individual clients." The IT team is based at Sherwood Park, and he says a dozen of them are involved entirely in applications development.

Smith emphasises that Prolog's Web development capability is not offered on a stand-alone basis, but in order to support front-end or back-end fulfilment activities. "So we offer the service at standard rates - we don't charge a premium for it." As you might expect, he says it is becoming increasingly popular. "There are benefits to clients in being able to buy a whole package of services from a single supplier, and at the same time it makes life easier if we're providing a total end-to-end solution."

Whilst direct-to-consumer fulfilment is now a significant part of Prolog's portfolio, the company also remains a major player in promotional and marketing support work for clients such as Coors (formerly Bass). It can involved anything from coupon redemption to bulk collation work such as the preparation of "welcome packs" for new association members or point-of-sale kits for retail outlets.

When this kind of work is compared with direct deliveries, "the difference is complexity," Smith says. "Picking and packing of point-of-sale materials can involve multiple products. We might even have to split product on a single pallet. And everything has to be controlled by the budget-holder, so liaison is a key function."

Physical handling of product is very much part of the proposition. The company has warehousing at all three of its main sites, including some advanced high-bay and narrow-aisle facilities. The majority of deliveries are handled by parcels carriers such as Royal Mail, but Prolog also has its own 40-strong delivery fleet, ranging from light vans to artics, and uses this particularly for "difficult" deliveries or those requiring two-man teams. "We look on this as another way in which we can add value," Guy Smith says.

Although mail handling on incoming order processing may have declined in recent years, an area where Prolog remains strong is outgoing mailing services. Its main operation is at Sudbury, where it can handle volumes of up to a couple of million items per mailing. There is also a unit for lower volumes at Mansfield.

The company provides everything from database cleaning and de-duplicating to a full print-on-demand service, supported by an array of Xerox, Hewlett-Packard and Vario printing and collation equipment. It also has its own creative design team, so it is in the remarkable position of being able to produce and print literature entirely in-house.

"Very few other companies offer the range of services we have," Guy Smith says, "and those who do are usually based in a single facility. We have multiple sites and a nationwide network."

Prolog also recently launched a major push into the contact centre market. Having already built up a substantial resource in this field, it decided it could market this independently of its fulfilment services, so last year it set up a new division, Prolog Connect. This has its own market profile and direct sales team, and offers both inbound and outbound (marketing) capabilities. It had already won two clients when we visited the company.

"We decided to market the service not on the back of technology, but on the strength of our people," Guy Smith says. "Yes, we have advanced systems such as call switching and voice recording, but we haven't gone overboard with technology. The key factor for us is how well the operator deals with the customer."

He says the company takes pains to give operators training on multiple accounts to achieve maximum flexibility, and use skills-based call routing. "We do use interactive voice recognition systems where appropriate, but only on a limited basis."

The IT heart of the Prolog business

At the heart of Prolog's extensive IT system is the Sanderson Mailbrain modular fulfilment package. The company regards its relationship with Sanderson as a true strategic partnership - reflected in the fact that it has access to original source code for adding its own bespoke functionality. The system is backed up by dedicated applications such as QuickAddress address matching software.

The system runs on Hewlett-Packard hardware, and is duplicated over the various sites, which are connected by BT Kilostream or Megastream links.

Contact centre management is handled by Symposium and Meridian call switching system and management software.

Prolog also uses its own software for applications such as high-speed laser printing (for which it has a product called DataMail).

In a move to squeeze extra promotional mileage from its systems capabilities, Prolog has harnessed its design resources to produce an attractive 32-page A4 booklet (almost like a magazine) all about it. If you read it you'll probably know more about its IT capabilities than you could expect to find out about almost any other company in this field.

High flyer

One of Prolog's longest-established contracts is with British Airways. Effectively it acts as the customer interface for BA's Executive Club, handling customer enquiries and complaints by post telephone and email, and providing information on anything from flights to food. It also handles fulfilment of new-member packages, and runs a systems-based operation to trace any lost or misrouted baggage. Users sometimes even drop in at the base.

The contact centre operation is run from a dedicated site at Croxley Green business park, Watford, while fulfilment is handled from Prolog's Sudbury base.