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QC
Logistics
2
. Background
2.1 Company Information
Waterford based company QC Logistics opened its doors
in December 1996 and provides outsource logistics services
to companies in the south east. In the beginning, the
company employed five staff operating one warehouse
site of 5,000 sq. ft and handled 400-500 pallets of
stock a week. Today, having experienced 100% growth
year on year, QC is one of the largest logistics companies
in the south east with 22 staff split across four sites
(totalling 130,000 sq ft), dealing in excess of 14,000
pallets a week.
QC Logistics is responsible for the stock management
of items for a number of clients in the pharmaceutical
sector, business which generates around 80% of its revenue.
The activities outsourced to QC are those activities
which are important to clients’ business process
but would not be their speciality or focus. By outsourcing
these non-core services (like stock management, Just-in-Time
delivery and shipping for example), the client gets
a higher level of service than they would do if this
was handled internally. “We allow companies to
do what they do best and we look after the peripheral
aspects”, commented George Banks, Operations Director
at QC Logistics.
When the three directors started QC Logistics back in
1996, the company started at point zero but, unlike
many other start-ups at the time, they had researched
the opportunity in depth, had a plan, and knew that
there was a demand for the service they wanted to offer.
A major optical / healthcare manufacturer was the first
premium client brought on board (originally glasses
but now also contact lenses). This client was followed
by a global Pharmaceutical/Animal Health care provider
and the rest then started to follow. “You had to
be able to prove you could do what you said you could
do!” said Susan O’Mahony, Service Director.
Although the company’s core business was in the
healthcare and pharmaceutical sectors, QC did work for
clients in other sectors. It was felt by the management
team that, given the level of internal standards and
process required to service a pharmaceutical client,
the systems in place were more than able to meet the
needs of clients in other sectors.
Over the years, QC had developed a model with a list
of criteria that were applied to each new client when
they were being brought on board – eCommerce is
now an important part of that process. One thing the
team has found is that a number of companies still prefer
to use their own bespoke stock system and provide QC
with links directly into that system.
Clients trust QC to look after volumes of stock and
ensure that that stock is on production lines Just-In-Time
(if stock doesn’t arrive and a production line
is stopped, it could cost the client substantial amounts
of money per hour.). Although clients trust QC with
their stock, holding their stock data is another issue
– there is always a fear of outsiders getting into
the system.
2.2 Market Information
When QC Logistics opened its doors in 1996, the team
knew they wanted to focus on the pharmaceutical sector.
Although a very niche market, the number of pharmaceutical
companies in the south east was on the increase and,
once one customer was on board, there was an opportunity
to grow organically within the sector.
Unlike most services companies who, at the time, were
investing in supporting technology companies, QC chose
not to. There wasn’t a sufficiently large IT client
base in the south east and it was felt that there was
a greater opportunity in pharmaceuticals.
As the company moved forward, the team was glad they
made that decision. The downturn in the IT sector caused
companies to decrease spend and now, those outsourcing
companies that were focusing on IT are shifting their
focus elsewhere – to the pharmaceutical sector.
This obviously put increased pressure on QC Logistics
and pushed them to ensure that their systems were always
one (or two!) steps ahead of the pack.
Due to the types of client QC dealt with, the systems
in place had to be more resilient that those of the
competition. Quality control departments within QC’s
clients were often the ones that would make decisions
on suppliers (and on the systems running within those
suppliers). Ultimately, the product QC was responsible
for was going to be consumed by human beings –
if the incorrect batch of a product was sent to a customer
it could have had huge ramifications.
QC has been raising the bar in the industry through
implementation of new systems and high standards - the
eCommerce project was an integral part of that. Had
QC not invested in eCommerce and employed a new strategy,
the company would have been much more vulnerable to
the competition – it gave them a real competitive
advantage.
That said, it was an ongoing battle and the system needed
to be sufficiently dynamic and resilient to meet the
current and future needs of clients. QC found from experience
that the fee they charged clients was almost secondary
in the decision making process when choosing an outsourcing
partner. More importantly, clients needed to be able
to trust an outsourcing partner and put trust in the
systems that are in place.
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