RFID to Spark Supply Chain Sector Growth

While some supply chain vendors long ago fizzled, others continue to sizzle, including IBM partner Yantra.

The prospering survivors of the supply chain technology shakeout are likely to gain a significant growth boost from RFID, according to industry analysts.

One vendor thats kicking up sparks, Yantra Corp., boasts both Best Buy Inc. and Circuit City Stores Inc. as customers. Yantra just added IBM Corp. to a list of publicly announced partners that already included Siebel Systems Inc. and retail systems integration specialist InfoSys Corp.

Supply chain management and logistics (SCM/L) players have felt uneven impacts from the cool economic climate of the past few years, according to Steve Banker, an analyst with ARC Advisory Group, a supply chain manufacturing industry market research firm based in Dedham, Mass. "A number of SCM/L start-ups have either gotten bought or gone bankrupt," Banker said.

But in a report issued this week, Banker contended that some companies in a sub-sector ARC dubbed "logistics visibility and control (LV&C)" — including Yantra, Optum Corp., and Savi Technology Inc. — have been doing very nicely in terms of sales.

"This used to be known as supply chain event management" (SCEM), Banker said. At one time, more than 20 vendors — backed by at least $100 million in VC funds — specialized in SCEM alone.

When Banker recently revisited this supply chain niche, he was amazed to find a cumulative annual growth rate of 29 percent during an otherwise lackluster IT market 2000 to 2003.

Although a number of SCEM companies had gone bust, others had "quietly been doing a lot of business and generating substantial revenues," he said.

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