Business Technology

Saturday 3 December 2016

How Cork's Mr China has Black Friday sorted and awaiting delivery

Cork, China and San Francisco - the three centres of the universe for Liam Casey, a man who most probably has played a role in the products you're buying this Cyber Monday, says our technology editor

Published 26/11/2015 | 02:30

'Our day goes from eight in the morning in China to six in the evening in California. That's 26 hours. Ireland is right in the middle. So we see it as being in a great location to manage the flow of information,' says PCH boss Liam Casey.
'Our day goes from eight in the morning in China to six in the evening in California. That's 26 hours. Ireland is right in the middle. So we see it as being in a great location to manage the flow of information,' says PCH boss Liam Casey.

Will you be buying something tomorrow on 'Black Friday'? How about 'Cyber Monday'? If so, there's a fair chance that the gadget you order, or some part of it, will have been made by Cork's Liam Casey.

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His PCH International business now has its tentacles around a vast swathe of the world's contract manufacturing business, especially for technology-related products. Based in Cork, San Francisco and China, the outfit he started has grown to $1.1bn in revenues by making it easy for companies to get something made.

And it's not just Apple or Xiaomi, reported PCH clients, that have made his business boom. Go to Casey with a drawing and an idea and he will make it into a shiny, functional product using the latest materials and technology. He does this thanks to a carefully cultivated network of almost 200 factories and manufacturing facilities in China.

In some cases, he'll even sell it for you. Early this year, PCH bought the once-mighty webstore Fab.com for a reported $15m. The website sells a variety of tech, fashion and lifestyle goods, some of which are made by entrepreneurs that go through Casey's manufacturing process.

"We're probably at our most rapid growth period in our company's history," he says on a dull November day. "In terms of new customers, the business is growing."

It is the mix and profile of clients now coming to Casey's door that is providing the biggest spur, he says. PCH has always done well with big electronics manufacturers such as Beats.

But now that the world sees the possibility of making things without getting hands dirty, a new wave of non-tech companies is coming out of the woodwork to try and get products whipped up.

"I was just in San Francisco with a Fortune 100 company that wants to bring technology into their business," he says. "This is really the shape of things to come. These companies historically would have been afraid of pure technology but some of them are starting to embrace it in a big way. They would have 100s of thousands of outlets around the world that sell these products. And we're enabling them to bring products to market.

"For a company to enter the market like a non-tech company to enter the market and to be able to deliver a product like that is very difficult. That, for us, is where there's huge excitement because the growth curve there is far greater than any we've seen before. Devices like this have set the standard for what a product experience should be."

Speed is of the essence, he says. "The most important message we give to these large non-tech companies that want to get into the tech space is that you've got to move fast. Time is the number one currency, the dollar is second."

It's not just the speed of making something and getting it to market that's changing. Casey is at the bleeding edge of witnessing the change in the sort of devices we are using.

"A couple of years ago, we built a million PCs for a Japanese company," he says. "In conversation with that company today, a PC would never enter into conversation. The products change along that journey."

These days, PCH is into everything from music devices to tablets to phones. The biggest difference he sees now is not in the making of a device but in the strategy and logistics behind getting into the hands of actual shoppers.

"Look, it's very easy to manufacture something," he says. "But it's very hard to sell it. The selling of a product and the preserving of the margins as it goes through the sales channel is now what's important. If you go back six years ago and look at Dell, everyone talked about what a great supply chain it had at the time. They had a very long first mile and a very short last mile. There was a huge channel of raw materials in that chain.

"Today, it's completely different. Today's it's the Xiaomi supply chain that people are looking at. And that's what our model is similar to. Xiaomi has a very short first mile and a very long last mile, an 8,000-mile last mile.

"Everything we do today is about extending the last mile and shortening the first mile. If you look at some startups in the US, they have 75 to 95 days of inventory sitting in the channel. If you look at companies like Xiaomi, they have zero inventory. They're actually a positive cashflow company. We show that model to startups we work with. This is where it becomes really capital efficient for people to create proper startups."

Inventory, says Casey, is where most new startups make their mistakes.

"It's always around inventory. When Amazon launched their Fire phone, they had inventory in warehouses all around the world. It didn't sell. So they they had to write off all that inventory. But Amazon is a big company with deep pockets and they can afford to make mistakes.

"Startups can't afford it. A startup would be gone out of business if they did something like that. So it's about having a lean supply chain. Pay more for your freight, pay less for your inventory."

It's not just logistics around products that Casey is involved in. More and more of his contract customers are trying to use the products they make as bulwarks into a deeper business relationships.

"This is arguably one of the biggest changes to the business," he says. "The way it used to work would be that a company would come to us with an order and we'd make it for them. Then it would end up sitting in a warehouse for a period. But in terms of measuring a product, it's all changing. It's no longer selling into a channel or even through channel. The measurement now is when the product is actually sold to a consumer and then activated." This could be a phone that starts working or a wifi gadget that becomes connected, he says. PCH is investing new money into this via a support service in Cork. "The activation is when the moment of truth is. And in the near future, it's going to be about the measurement of the activity of that device. You can capture information and data from all types of devices. It doesn't matter what kind of a device it is. It's an area where we've started a new customer support team, a global team, headed by one of our people here in Ireland, Tom Kitt."

Casey has long had ambitions to grow out his business into retail. Having spent years in fashion retail before entering the contract manufacturing business, he purchased Fab.com. While the online store was once valued at over $1bn (having raised $165m in funding), PCH snapped it up for $15m. Casey is trying new things with the venture.

"We've a pop-up shop for Fab in December," he says. "It runs for six days in New York. That's a physical pop up facility so it's going to cause a lot of buzz and excitement.

That said, Casey isn't expecting an overnight turnaround in the business. "We're a 20-year-old business so we take a longer term view," he says. "This month we put in a creative director in residence, the former fashion editor for Vogue in New York. For me, that's a hugely exciting move."

Ireland, and Cork in particular, still plays a key part in PCH's operation. "Our day goes from eight in the morning in China to six in the evening in California. That's 26 hours. Ireland is right in the middle. So we see it as being in a great location to manage that flow of information and customer service, especially into the US. Doing it out of Ireland is very helpful."

Liam Casey grew up on a dairy farm in Co Cork, leaving school at 18 to spend 10 years working in the fashion trade.

In 1996 he visited California, where he spotted an opportunity to help Western companies source parts from Asia. When he got home he founded PCH, named after the Pacific Coast Highway.

He focused on sourcing computer components from Taiwan for US manufacturers setting up in Ireland. He'd fly directly to factories to negotiate, and ship faster than competitors. When his Taiwanese supplier moved to China, Casey followed.

Over time he built up a map of the capabilities and reliability of different factories. By 1999 he agreed his first deal with Apple, and by 2011 he'd raised $84.5 million in venture capital. PCH now employs 2,600 people across nine offices.

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