You can tell that Sam Sharma enjoys recounting the incident that prompted him to set up the company now known as Rico Logistics. At the time he was managing a branch for one of the national DIY retail chains, and the company used self-employed local contractors to do home deliveries. In walks Neil Kinnock, no less. He says he loves the product range but finds the delivery service terrible.

To cut a long story short, his comments prompted Sharma to join forces with a ollege friend and set up their own delivery service, initially using a pair of Ford Transits. That was twenty years ago. The company they created now has a work force of well over a thousand on call, and is on track to turning over £40 million this year.

The focus changed quite quickly from home delivery to general courier work, and increasingly addressed itself to field service for the hi-tech market. Rico is now a leading national supplier in this market, with particular expertise in retail point-of-sale equipment, though its abilities extend well beyond this.

Often it's attention to detail that enables companies to grow in the way Rico has. As Sharma recalls: 'In the early days we used to give an absolute commitment to turning up in twenty minutes, and we would telephone the client when we made the delivery. If we had a problem, we would always ring them and explain why we were late.'

The initial base as Slough was soon augmented by a depot at neighbouring Heathrow, then by others in north-west London. A turning point came when the company launched a bid for a high-tech delivery contract. In the event, this was won by a joint submission from two major logistics groups, but the experience showed Sharma and his colleagues that they could put in plausible bids for this kind of work. 'We decided to go for tenders to work for IT companies.'

A further significant step in Rico's development came when it acquired an existing company, Burnham Logistics, with a staff of nearly 150 field technicians, and introduced a cost-per-call pricing model with a service level agreement of four hours. 'Customers told us their calls were costing £70 each. We showed we could reduce that to less than half.'

The rest, as they say, is history. The team became increasingly successful, and continued to expand. The same-day courier network, now branded Rico PartsExpress, is still in place, but these days forms the backbone of a much more sophisticated operation.

'We gradually got involved in stock management, perpetual inventory counts, and managing parts deliveries to field engineers,' Sharma explains. These requirements have prompted the gradual roll-out of a network that now includes 42 depots nationwide, as well as a smaller network of forward stock locations.

'We found a some of our customers had particular difficulties locating stock in the field, so four years ago we introduced our own system, TRACE. We scan product into depots and on to shelves, and we can track the age of parts in storage.'

The company also introduced a form of order screening, which meant that in some cases parts could be shipped direct to the repairer, rather than to a depot. 'We reduced the loop from nine days to three.'

As the company grew, it championed more and more of the features that have become classic approaches to the parts delivery market. For instance, it found that some clients wanted parts to be delivered to a nominated location rather than to a specific repairer. 'The company might not know which engineer was actually going to do the job,' Sharma explains.

The answer has been what Rico refers to as PUDO ('pick-up drop-off') solutions – a term that usually refers to a staffed collection point or an unstaffed drop-box. In Rico's case, the company uses both methods. For manned collection, it has done a deal to use the 200-strong service centre network of hydraulic parts supplier Pirtek, creating a service known as Rico PartsPoint.

'We were keen to avoid convenience stores and garages,' Sharma emphasises, arguing that engineers visiting such premises won't always be served quickly enough. 'We wanted to provide a *counter service' environment.'

Deliveries are made between 7 and 8 am, and the customer is sent an email detailing the number of items to be collected. 'There is usually a location within five or six miles of the engineer's home or workplace.'

For drop boxes, Rico has examined several approaches, including working with BearBox (arguably the original pioneer of the drop-box concept). 'We've also tried in-night deliveries to engineers' car boots,' Sharma says. 'It works well enough, but you don't get the economies of scale that there are with a PUDO solution.'

You might know the company as Ricochet – a vivid and evocative name, but one dropped by the company four years ago in a bid to convey its shift away from pure courier work and into full-service logistics.

Evidence of this move is also seen in the 40,000 sq ft warehouse Rico operates at Dunstable. Stock can nowadays be collected from customers and stored here pending delivery. And out in the network, the typical size of depots has increased from 10,000 to 30,000 sq ft.

'We're increasingly asked to advise on logistics operations,' Sharma says. Indeed, it now operates a logistics consultancy division called Rico PartsSolve. As an example of its in-house capabilities, he cites courier travel patterns. 'We've worked out that the average length of a courier journey should be no more than fifty miles. If its seventy, it's too far. So our software can calculate travel time and distance to each call, and provide the information to the call centres handling the job allocation.'

Further expansion has come in recent years – notably with the acquisition of companies in Ireland (north and south) and Spain. The Spanish operation already turns over around 3 million euros a year, has a network of 15 bases and runs 72 PUDO points.

Rico is now reckoned to be a leader in the retail 'break-fix' and parts delivery sector, having worked for many years for clients such as Siemens Nixdorf. It offers a typical four-hour call-to-fix time, which is as good as anything in the business.

Now Sam Sharma sees opportunities in other related markets. The company has already made inroads into the banking sector, and he sees particularly synergies for further expansion here. 'We aim to be turning over £100 million within five years,' he says.

On present evidence, it's hard to see what could stop the company achieving that goal.

Intelligent box systems – expansion abroad, and new moves on home ground

The 'intelligent locker box', very much in the news lately as a possible solution for problematic consumer deliveries, has in reality gained most of its momentum up to now in the business-to-business parts delivery market. No wonder, then, that the two main UK suppliers, ByBox and Business Direct, are still pushing its merits strongly in that sector alongside their more high-profile B2C initiatives.

The concept is much the same for both markets. The item is left overnight in a locked box within an array of such boxes, and the communications features of the system automatically alert the recipient to pick them up.

Both ByBox and Business Direct, now strongly established in the UK, have lately been widening their horizons. ByBox, which has strong French connections through its manufacturing subsidiary, already has a network of over 100 sites in France, and is planning to expand its network there. Now Business Direct has put down a footprint there too.

In Business Direct's case, the approach is slightly different; for export applications it has take the path of licensing its technology to third-party users such as national post offices or independent carriers. In France, its client is Ciblex, the former Hays parts delivery business there. Ironically, Hays' former parts business in Britain was sold to rival ByBox some years ago.

Ciblex already has over 400 locations with key lockers, but says it is looking for an alternative 'ATM-style' solution, hinting that this could help it expand into B2C deliveries as well as enhancing its B2B offering. It has therefore just announced a trial with Business Direct box banks.

According to Ciblex president Teddy Megarbane: 'The new modular intelligent ParcelXchange is the most exciting opportunity to happen in the in-night real-time inventory management sector in France for a long time.'

The Ciblex trial is the second such project to be announced in a matter of months. Only this spring Business Direct revealed that DHL Sameday Ireland was installing ParcelXchange box-bank drop-off points at selected towns and cities throughout the republic for in-night deliveries to field service engineers and business-to-business same-day solutions. Interestingly, two years ago Business Direct extended its own operation to Northern Ireland.

Back at home, the two box-bank networks operators tend to run their own show, delivering consignments to their box banks with their own courier fleets. However, both have been showing some latitude recently in the idea of allowing other carriers to deliver to their installations as well. Business Direct has made an explicit statement to that effect, and in fact recently announced a deal with Parcelforce Worldwide in which Parcelforce itself is understood be delivering to the drop-off points.

Speaking about its new phone-box-based consumer delivery service (News Update, page 4), ByBox founder Stuart Miller told F&E that the plan also included deliveries to the box banks by third-party carriers. 'We want this to be an inclusive system, not exclusive,' he said. Paul Carvell, who heads Business Direct, similarly told us his service was costed on an occupancy model, not on the basis of delivery charges.

Boxes are of course by no means the be-all and end-all of the services offered by these two companies. Both have sophisticated stockholding and distribution networks, supported by some advanced IT. The boxes are just one component.

At the moment ByBox, which claims to hold a the biggest share in overnight parts deliveries, has an interesting plan in the pipeline to extend its presence even further into the market.

'Our clients want a single system that minimises their spend on stock,' says Stuart Miller. 'We think this requires sector-specific solutions, in which we supply not just the distribution capability, but also a deep expertise in the industries concerned.'

His proposed solution to this requirement is joint-venture companies, in which ByBox supplies the logistics and IT capability, and a partner-company provides the engineering know-how required by the industry involved.

'We would take ownership of the whole operation – stock, consumables and process,' Miller says, 'along with delivery and returns handling.' He adds: 'We can also get involved in planned maintenance, which is where the supply chain is currently fragmented. We'll be pulling the components of the supply chain together.'

He describes this as 'moving up a layer, and taking more control'. He says every market sector has different characteristics. 'Our partners might be marketing companies, and would probably be a similar size to us.'

RedPack – fighting the corner for parts delivery points

The connection between modern overnight express parts delivery services and unattended consumer delivery solutions now seems entrenched and more or less permanent; and nowhere is this more evident than in the services of RedPack International, a name that arrived on the UK scene a couple of years ago.

RedPack in some ways owes its very existence to the old Collectpoint business, which was set up in the UK in 2000 as a means of diverting consumer deliveries to alternative pick-up points, initially at convenience stores.

Collectpoint ultimately failed, but only after it had switched its focus to the then more promising parts delivery market; and a couple of years ago its assets were acquired by a group led by Juan Sotolongo, a one-time UPS executive. He has since been spearheading new parts delivery ventures both here and overseas.

'There's a long sales cycle in this market,' he admits, 'but we've got our first couple of customers on board now.'

Although basing the new RedPack operation on the old Collectpoint system, he has repositioned the proposition significantly. Gone are the convenience store outlets, and even the forecourt outlets. Instead, the new drop-points are at what Sotolongo describes as business centres.

Whilst he asked us not to name RedPack's UK partner, in the United States it is working with Office Depot. He says a similar arrangement is being rolled out here, though not with that company. Comparable related services are on offer, including for instance copying and shipping.

He says the company has also looked at drop-box and box-bank technologies, but felt that there was also demand for something more sophisticated, which he terms a 'manned boudoir solution'.

Rather that set up its own infrastructure like ByBox and Business Direct, RedPack is working with established partners, who include RM Logistics, a specialist in bank-to-bank movements, and Unitrans, which is providing warehousing for forward stocking locations, plus same-day deliveries.

Using these resources, plus enhanced IT based on the original system, RedPack reckons it can offer a high degree of parts visibility throughout the delivery process. Customers for their part can tap into this visibility by SMS or through web browsers. 'With our UPS background, our team is very strong on process engineering,' Sotolongo says.

Whilst the UK is the core market, RedPack is also being built up in the United States, where Sotolongo says there is enormous potential. 'No one is doing anything like this over there,' he says. However, lack of history can be a double-edged sword. 'It's a challenge to establish the concept,' he says. 'The idea of pick-up, drop-off services is well understood in the UK and Europe, but not over there. So there's an educational task to perform.'

Somewhat cheekily, he admits, his company has actually registered the acronym 'PUDO' as a trademark in the US. 'We'd probably never enforce it,' he acknowledges, 'but it works as a kind of credential for us. It enables us to put the *TM' symbol against the term.'

The prizes for a successful roll-out could be enormous. Sotolongo points to the fact that Sears has 12,000 technicians on call, and ADT Tyco has 11,000. As customers, such organisations would be a formidable prize.

Meanwhile, Sotolongo is also involved in parts delivery initiatives elsewhere in the world. In its latter days Collectpoint was linked directly or indirectly with a range of parallel developments such as PickPoint in Germany, and he still has an involvement with this company.

'PickPoint is the market-leading PUDO-style parts network there,' Sotolongo says. Customers are said to include Fujitsu Siemens and IBM. Again, third-party carriers such as TNT provide the transport element.

Another company in which he is involved is DropPoint, which Sotolongo describes as the market leader in Australia.

Interestingly, although Sotolongo is not targeting consumer deliveries as his top priority, he implies that the market remains an area of interest. 'There's a grey area between B2B and B2C deliveries where our solution can work very well,' he says.