Renewing The Supply Chain Industry
Automatic identification and data collection (AIDC) companies have seen brighter days, but is the forecast for this industry really that gloomy?
This month, I'll journey to Chicago for my ninth Frontline Solutions show. Or should I say Frontline Solutions: Supply Chain Week? Show producer Advanstar recently expanded the event's name and focus to incorporate the Collaborative Commerce show and technologies. This change didn't surprise me considering the seemingly tumultuous time the supply chain technologies (also referred to as automatic identification and data collection [AIDC]) sector has experienced. Earlier this year, two of the industry's cornerstones, Tomo Razmilovic and Larry Roberts, left their executive positions at Symbol Technologies (Holtsville, NY) and AIM, Inc. (Pittsburgh, PA), respectively.
Reactions To AIDC Market Maturity
It's been difficult for all types of technology companies since the dot-com bubble burst, the economy started sagging, and war was waged internationally. But the supply chain technologies industry's problems are even more compounded. The biggest challenge it faces is that the traditional market for supply chain technologies is maturing (i.e. bar coding in industrial applications).
As sales and margins on these products have decreased, industry leaders have raced to start initiatives to drum up new opportunities. Some of these movements included Rick Bushnell's and Karen Longe's Executive Marketing Summit and AIM's Association Marketing Alliance Program (AMAP). Both programs worked to expand AIDC into new applications and markets. Some industry companies tapped into these opportunities and have started to gain market share in spaces like field force automation and healthcare. Companies also focused their efforts on emerging technologies like mobile computing, wireless communications, and RFID (radio frequency identification). In fact, there are few companies left in this industry that haven't expanded their product line to include mobile offerings.
But today, supply chain technologies are still considered back room, industrial-only applications. A lot of education, sales, and innovation needs to occur before these technologies are as widely adopted as front office solutions like Microsoft's. So, the industry initiatives continue. The most recent movement comes from European academicians and industry members. It's called i3W (The Integrated Item Intelligent World). It is carrying the mission of predecessors - promoting understanding of the need for supply chain technologies, thus hopefully leading to more market sales. The i3W group is presently trying to expand its reach to the United States and gain the approval of AIM member companies.
The Channel's Role In AIDC Growth
AIM is also taking some new tacks. Of primary interest to Business Solutions' readers may be AIM's new focus on VARs and integrators as a viable membership community. Dan Mullen, AIM's interim CEO, is spearheading a number of activities designed for the channel. AIM partnered with analyst Raymond James (St. Petersburg, FL) to perform a study of AIDC technologies and the channel. VARs and integrators can offer their input by participating in this survey at a hosted Web site: http://highcrest.rjf.com/aim_survey_ stage/content/login.asp. AIM is also trying to facilitate meetings* between channel companies and vendors at Frontline Solutions: Supply Chain Week.
And so the supply chain technologies industry battles on. But keep in mind, the industry's struggle is relative. A Robert W. Baird & Co. (Milwaukee) study found this market generated $11.6 billion in 2001 and is predicted to grow annually nearly 21% through 2005. Not too bad for an industry in upheaval.