Autumn 2008

Having built up a substantial presence in consumer products distribution, PDS is turning its sights on the e-fulfilment market, and already has a lot to offer

Suppose you're building up a presence in the e-commerce market. Maybe you're a high-street retailer who's expanding in the multi-channel arena, or a pure-play e-commerce start-up, ready to expand. Who do you look for as a suitable fulfilment partner?

Should it be a business with growing expertise in e-fulfilment? Or maybe a logistics company with a solid reputation in traditional high-street deliveries? Either way, will that company share your values? Is it an independent, family-run business – one for which professionalism is essential, but where there's also a readiness to try that bit harder?

If you've checked off most or all of these attributes, then PDS International could be exactly the partner you're looking for.

 

Until now PDS been a bit of a well-kept secret, but this is a company with a substantial 500,000 sq ft of warehousing on two sites, a list of high-profile customers supplying brands such as BaByliss, Dreamland, Revlon and American Golf, and a track record that dates back more than ten years.

Strictly speaking it's not an e-fulfilment company as such – and yet, when you look at the list of its activities, you realise that in everything but name, it is. Among its operations for various customers are functions such as storage and picking of items for one-off orders; packaging and wrapping; labelling and product re-working; package assembly and 'kitting'; order and despatch management; returns handling; even invoicing.

If all that isn't e-fulfilment, you might wonder what is.

Whilst these activities may not reflect the historical focus of the company's activities, David McClelland, the commercial director, makes it clear that the focus is definitely switching gradually towards e-fulfilment. 'We've been monitoring the growth in home shopping,' he says. 'We're aware that the market is changing, and our customers want to change to reflect consumer expectations. We realised we needed to understand their requirements, and be ready.'

The company has the advantage of already being immersed in the consumer goods market, storing a wide range of ambient products destined for the UK's major retailers. So its market experience is a given. Admittedly, in the past it has been involved mainly in full-load palletised deliveries to major warehouses and stores, but through its re-working and repacking activities, it has gained close knowledge of handling the goods at unit level, which is what e-commerce is all about.

Where PDS has been particularly shrewd is in the way it handles transport. All of it is outsourced. 'We're a logistics provider without vehicles,' David McClelland says wryly. In practice, all the full-load work is done by one long-standing partner-company, F Swain & Sons of Poynton, so the transport operation is run like a seamless extension of the core business. 'We have a fantastic rapport with them,' McClelland says. 'We're like an extra depot for them.'

Nevertheless, the fact that the transport is outsourced means PDS can flex its requirement readily according to circumstances, and would not suffer if more product were to be streamed to end users via its regular parcels carriers, who include DPD and UPS.

Outsourcing has in fact been a basic tenet of PDS's philosophy through the years. It also outsources all its IT, for instance. 'We don't need the skill sets of say four individuals full-time,' says McClelland. 'Instead, we have access to more specialists, but only when we need them. We actually find we get better service that way.'

He takes a similar approach to packaging development – an activity in which PDS is probably more active than a lot of logistics providers. But the work is done in association with a Warrington-based company, Porter Packaging, not in-house.

'Our suppliers tend to be other family-run businesses with values similar to ours,' McClelland says. 'We benefit from their attention to detail. We're not just a number to them. If there's an issue and you ask about it, you get the truth. That's not always the case in large national contractors.'

The net benefit is that PDS in effect runs a much bigger business than its turnover (something approaching £4 million) might suggest. 'We have access to twenty-five IT staff, 250 vehicles and 16 packaging technicians.' The point is well made.

The company makes no secret of the fact that one customer currently towers over its others in terms of volumes handled – Conair, the American organisation that owns the BaByliss hair care brand, along with several others such as Cuisinart (premium kitchen equipment). Currently a large part of one of PDS's two big warehouses is taken up by Conair products.

The reason is that Conair is PDS's longest-established customer, and as it has grown in the UK, PDS has grown with it. 'We've taken on other customers over the years,' David McClelland says, 'but every time the proportion of our business looks like changing, Conair grows further, and the relativities are re-established.'

Not that he's complaining. It has clearly been fruitful relationship. 'They look on us as their UK logistics arm,' he says, pointing out that in the majority of markets where Conair operates, the logistics function is usually kept in-house.

PDS provides myriad services for Conair, including for instance processing returns and repackaging them where required. It is partly as a result of its work for this customer that PDS has refined some of the services it can now offer to others.

While Conair is a major company, PDS is keen to make it clear that it can also work for quite small businesses. 'We even have the scope to offer smaller companies office space here if it helps,' McClelland says.

So how well is PDS geared up to the e-fulfilment task? It already has some of its racking arranged to hold pallets on the upper levels and cartons or even loose product at picking height. And the operation is geared to batch picking, in which like products are picked in bulk, brought back to the packing station and then separated there into individual orders.

This is a classic e-fulfilment approach, and PDS already applies it in that way for some customers – for instance, on an operation that involves picking spare parts for electrical products and despatching them direct to consumers.

It also provides a service which has the in-house name of 'fulfilment' – namely the processing and despatch of orders where a consumer has earned entitlement to some form of free gift. This is sometimes known as redemption work.

McClelland says the company is currently exploring the possibility of installing some live flow racking to feed fast-moving product automatically to the pick face.

Fulfilment – 'a massive market shift'

'A massive shift is under way in the retail market,' David McClelland says. 'When a consumer buys a product in a store, it might not actually be in the store. It might be delivered from a central point. Or the consumer might buy it online, or via a TV channel.

'The medium of buying doesn't matter any more. Whatever the transaction looks like, increasingly the fulfilment task means getting the goods from a warehouse directly to the consumer.'

This may sound simple enough, but McClelland points out that the underlying process can mean a complex inter-relationship between retailer, supplier, consumer and fulfilment company; and the fulfilment company has an increasingly important role as the facilitator that makes all this happen.

PDS already provides this kind of service for several of its customers. Typical is Lifestyle Marketing International, which supplies consumer products to other retailers. PDS handles fulfilment for Lifestyle on behalf of some of its retailers, and is also well placed to do the fulfilment for the retailers themselves.

In effect, PDS has recognised that for the home shopping revolution to maintain its momentum, fulfilment companies need to work increasingly with manufacturers and suppliers as well as retailers themselves.

'There's a big demand for this kind of thing,' McClelland says. 'We're convinced this is how the market is going to evolve.'

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PDS – continuity for over twenty years

The original PDS was set up back in 1986 by John McClelland, who heads the current company. It started life as the distribution arm of an electrical wholesaler, which explains why distribution of consumer electrical goods has always represented a core activity for the company.

McClelland later moved on, and for a time held the role of operations director at TDG subsidiary Harris Distribution. Then nearly ten years later, a sequence of developments led to him launching a reconstituted and newly-independent PDS International in 1995. Its focus moved from Rugby, its original home, to the UK's North West, and for a while it had premises on the MOD site at Burtonwood, near Warrington.

Since then it has moved into two more suitable warehouse sites – one at its headquarters in Ashton-in-Makerfield, close to the M6 motorway, the other not far away at Widnes.

John's son David started his career working in IT support (he trained with the BBC), and joined PDS in 2000. He says his IT background has given him invaluable insight into the systems support that is essential to fulfilment, but he's keen to keep it in perspective. 'IT helps you run your business,' he says, 'but you don't need to be dominated by it.'

Throughout its life, the organisation behind the BaByliss hair care range has remained a key PDS client, but many others have since been added, selling a variety of ambient consumer goods.

*The telephone number of PDS is 08709 505981 (option 1).
An old number was given at the end of the article that appeared in our printed magazine, for which we extend our apologies to PDS.