Peter Brereton and his brother Dave, two computer programmers, founded the firm Tecsys in Montreal in 1984. The company, which initially installed software, began to develop it. After becoming a public company in full techno euphoria, it almost disappeared in the collapse of the internet bubble to finally recover and become leader in supply chain solutions in the United States.
Jean-Philippe Dcarie
The Press
You are a Montreal company that is little known in Quebec. Explain to us your journey and how you came to impose yourself in distribution and logistics solutions.
We launched Tecsys at my brother's in 1984. We implemented management software for all kinds of companies, then we started to develop it and we became specialists in solutions for the management of suppliers of large retailers like Walmart or Sears . These suppliers had to organize. From the mid-1990s, we concentrated our efforts on the American market, where there was much more action. We became a public company in 1998, in the midst of a techno bubble. We issued shares at $ 7. The following year, they fell to $ 2 and in 2000, they reached $ 51. After the crash in technology stocks, our stock was worth only 62 cents in 2002.
Was the survival of the business at risk at the time?
These have been very difficult years. Because the bubble had not only affected the value of our action. Our revenues, which had reached 36 million in 2000, fell to 15 million in 2002. This is where we started to develop new markets. We concentrated our efforts in general but complex distribution to help companies that needed to better organize their supply chain and in the management of hospital networks. We started selling our software to American hospitals. They were very late. They did not have supply chain systems. Everything was done manually. Nurses wasted 25% of their time searching for equipment. They were allowed to organize themselves much better by managing their supply chain.
The health sector is important to you. Have you successfully sold your systems to different Canadian public networks?
Not really. We have some of our management solutions in the CHUM, but the Canadian public system is more difficult to penetrate, the climate is more political. We have to wait for the decisions of the Ministry. In the United States, where everything is managed privately, we are present in 45 hospital networks. For example, the Trinity Health network alone brings together 92 hospitals that use our management systems. We have developed supply chain systems for operating rooms, emergency rooms, nursing stations.
The United States is your main market. What percentage of your annual income is 100 million?
The United States generates approximately 65% of our annual revenues, while Canada accounts for nearly 20% of our sales and the rest of the world, 15%. However, we have just completed an acquisition this year in Copenhagen, Denmark, which will allow us to have a direct presence in Europe. It is a third party logistics firm which is responsible in particular for certain activities of the IKEA group.
You also made an acquisition in Toronto. In which sector exactly?
We acquired Order Dynamics, which specializes in direct logistics with consumers. It is the sector of the future. Retailers now want to have access to the consumer door, and we are going to give it to them.
Do you outsource logistics operations for your customers or are you just a software supplier?
We are a supplier of supply chain solutions, but we do not outsource. For a year, with the advent of cloud computing, we no longer sell software to our new customers but we offer them access to our solutions via the cloud. We took four years to prepare for this migration. Our entire technology base is now on the cloud.
In addition to your large healthcare customer base, do you have large industrial customers in the United States and Canada?
We have a base of over 1,500 customers and 80% of our revenues come from our 300 largest customers. In the United States, we take care of all the logistics for the Canon group or all Caterpillar retailers. We are responsible for the global pharmaceutical distribution of the UPS group. In Canada, we have industrial customers like the AJ Walter group, we are responsible for supply chains for several liquor companies in Canadian provinces and BC Cannabis.
Do you have innovation projects in development with Scale AI, the supercluster of intelligent supply chains?
We have several discussions with Scale AI, but we have no project that can be co-funded by federal government funds because the projects must involve supply chains in Canada. Scale AI also participates in initiatives that involve companies with fewer than 500 employees. We have just reached 500 employees at Tecsys. However, we are still having discussions with them on the best ways to optimize warehouses and supply chains in Canada.
Most of the development of your solutions is carried out in Montreal. How many people work there exactly?
We are more than 300 employees in Montreal, and 90% of our development is done here. With our current projects, we will have to hire an additional 160 people over the next year. We are really in a period of strong growth and we need new resources to be able to meet demand.