Fulfilment force to reckon with

Ask around in logistics circles to see which contractors are rated as serious contenders in the e-fulfilment market, and one name is likely to crop up repeatedly ­ iForce.

This might seem surprising, considering the company only came into existence in 1998. But its antecedents date back nearly 35 years. As chief executive Matthew Peacock wryly puts it: "We're the only e-commerce fulfilment company established in 1957." Age is not the only thing giving iForce credibility. It also has a formidable range of resources. They include a warehouse with extensive singles-picking capability at its headquarters in East Molesey, Surrey, and a brand-new 6,500 sq m warehousing complex which it has just opened at Bromford Gate, Birmingham.

It also has a 180-seat contact centre at Northampton (it is keen not to call this a "call centre"), and a well-established database analysis and management division. It soon becomes clear that there are many ways in which this company is already practising the e-fulfilment concepts others only preach.

That impression is quickly reinforced by a visit to its East Molesey warehouse complex. It may not be the most modern or advanced facility in the world, but here your find row upon row of roof-high racks, stacked with a variety of products awaiting singles picking and one-to-many delivery. This is true e-fulfilment in action.

Moreover, superimposed on the existing facility is an extensive new mezzanine level allocated entirely to a storage, picking and fulfilment operation for lingerie supplier Splendour.com. Here you have old and new sitting cheek by jowl in dynamic but ordered juxtaposition.

The names of some of iForce's other customers offer a further clue to its credentials. Among them are Bigsave.com, eBay.co.uk, QXL.com, Lastminute.com, Sky Sports Store and Toyzone.co.uk. Clearly iForce has been involved in many of the more high-profile e-tail ventures of recent times.

However, alongside all this activity, a substantial proportion of iForce's business base has been retained from constituent companies ­ including, for instance, direct marketing and sales support for customers such as Bass. Other more "traditional" customers include Hewlett-Packard, the Inland Revenue and Roll-Royce. Indeed, B2C business still accounts for only between 10 and 30 per cent iForce's volume and turnover.

Shift in emphasis
Nevertheless, emphasis has shifted to a degree from the traditional activities to e-fulfilment and related business. As logistics development director Bob Mulumudi puts it: "We could see the frustration of people in these emerging markets who couldn't create a fulfilment capability fast enough. Whilst not a dotcom business ourselves, we were able to relate to the competitiveness of their markets, and respond to the fast decision-making they needed."

He adds: "We already had the experience they wanted. For instance, we'd been doing parcel drops for thirty years." The company also had experience in customer interaction, and in the kind of one-to-one marketing analysis that is increasingly demanded in the dotcom era. As chief executive Matthew Peacock puts it: "We could see that database management was going to give smaller suppliers a unique advantage in the market, and the ability to compete with bigger rivals."

IForce soon proved its ability to set up new systems quickly. A fulfilment operation for Toyzone, for instance, was established in just six weeks. Online auction house QXL.com was another early customer for which iForce quickly produced a fulfilment package. A succession of other such contracts followed, including the operation it recently started for Splendour.com. IForce has also set up a pioneering lost-and-found operation for police forces in association with Web auction house eBay.co.uk. IForce collates, catalogues and stores the goods for eBay, and organises deliveries when the products are auctioned off.

Last year the company took a further step into the B2C market by setting up a self-contained same-day delivery operation called NowNowNow! This offers five-hour deliveries within the M25 area in three time windows. Last Christmas the service came into its own in an operation for Lastminute.com, which offered same-day delivery of gifts in the London area. The Lastminute operation has survived, and iForce is already planning to narrow the NowNowNow! time window to three hours, as well as extending it to other key centres.

The company uses third-party carriers to handle final deliveries. It is a major Parcelforce customer, and in fact took account of the proximity of Parcelforce's Coventry hub when choosing the Bromford location for its new warehouse. Other carriers such as DHL and UPS are also used for some operations, and same-day deliveries under the NowNowNow! service are handled by Securicor Omega Express.

It may seem ironical that as iForce turned its attention to helping fledgling e-tailers establish themselves, the bottom was starting to fall out of the dotcom market. However, iForce has been shrewder (or luckier) than many; chief executive Matthew Peacock says that of 22 dotcoms it has helped to launch so far, only four have fallen by the wayside.

Nevertheless, it is perhaps significant that Iforce is now putting more emphasis on the fact that its appeal extends beyond classic B2C operations. Matthew Peacock says the company sees major opportunities to provide business-to-business services to small and medium-sized enterprises. "There are plenty of operations that don't involve home deliveries, but can still draw on our one-to-many capabilities," he says, citing deliveries to hospitals and caterers as examples. "There are also calls for delivering many goods to few places." Indeed, as we closed for press iForce was on the point of announcing new contracts with four such clients.

Peacock adds: "With the move to disintermediation in the supply chain, and the consequent disappearance of wholesalers, there is an increasing demand for logistics contractors with the kind of capabilities these companies would traditionally have offered." He also sees a role for iForce in supporting SMEs as they become involved in e-procurement portals to aggregate their buying power. The company could provide a bespoke fulfilment package to them, he says ­ "especially among non-core MRO products." A major project of this kind is currently under development.

Boom from 2002
Looking further ahead, though, Peacock remains bullish about the prospects for the B2C e-commerce market. Now that investment support has fallen away, he accepts that B2C growth may be constrained for a while; but he predicts confidently that there will be boom around the Christmas of 2002, and believes this will lead to significant growth the following year. "Improved bandwidth to the home will have made online purchasing a much happier experience, and there will be more solutions to the customer-not-home problem."

As that recovery strengthens, iForce takes the view that with its credentials well established, it can turn confidently to the major international brands. "These could be either manufacturers or retailers," Bob Mulumudi says. "Either way, we can handle their e-commerce activities. The opportunities to build one-to-one relationships with customers are just as valid for them as for the smaller contenders."

IForce ­ combining core functions from a mixed heritage

Like many leading e-fulfilment contenders, iForce has been built up round a range of existing activities that have emerged as fundamental to the e-commerce proposition. In this case, key disciplines include capabilities in marketing support and database management.

At its core is a business that used to be called Eros Marketing Support Services, and offered storage and distribution of printed materials. It worked for a range of blue-chip customers including Esso and ICI.

Other components of what became iForce include Mailforce, one of Britain's leading call centre management companies, and Windmill Associates, a leader in database management.

Two men with collective experience in many of these markets, Matthew Peacock and Anthony Rice, acquired all these businesses in 1998, and initially combined them into a newly-enlarged DataForce group. They then identified those parts of the organisation that hung together most logically as an advanced fulfilment operation, and named it iForce. Last year they secured first-round funding to spin this off as a separate company.

A process, not a function ­ the systems behind the service

IForce takes the view that fulfilment is a process, not a function ­ one that starts with customer interaction and ends in delivery. It therefore aims to offer a comprehensive package of services covering all the activities involved. Its customer contact centre at Northampton is considered a key to this, and the company has recently adopted the award-winning Quintus software package to provide the backbone to the system. Features available include "live chat" with consumers over users' Web sites, and even "co-browsing", where the agent can take temporary control of a remote computer to guide a consumer through some troublesome process.

Multi-channel order-taking is taken as a given, and includes support for fax, telephone, Web and WAP phones. Payment processing is also offered if required. Comprehensive consumer analysis is offered, covering routine issues such as fill rate and returns, as well as strategic issues such as frequency and value of purchasing and predictive modelling.

The company's core management system is a proprietary application called SmarRT (System Management and Related Transactions), which provides real-time support across its own and customer's sites, and is said to be able to support Web or interactive TV integration.

SMarRT includes its own warehouse management capability, although the company has lately been investigating the possibility of achieving greater power by adopting a third-party WMS application. But SMarRT is likely to be maintained for holding customer tables and handling sales order processing.

e.logistics