informa
/
3 MIN READ
Feature

Modern Marvels

Break-the-mold diversification is taking on a new urgency as companies look to serve the needs of their customers
In addition to optimizing the movement of products within warehouses and shipping yards--including, increasingly, the use of RFID--HighJump's applications support trading-partner collaboration and supply-chain management. HighJump's sales were growing 30% annually, and the company was on track to hit $40 million in annual revenue, according to HighJump CEO Chris Heim. 3M sees those capabilities as a good fit with its 3M Integrated Packaging Tool, which integrates product information and package design for the consumer packaged-goods industry and others.

3M isn't alone in the $3.3 billion supply-chain-execution market when it comes to large manufacturers with software and service offerings. ABB, Honeywell, Rockwell, and Siemens all have internal units that play in different parts of the market, says Steve Banker, service director of supply-chain management with ARC Advisory Group, a technology advisory firm. "They're companies you don't necessarily think of as software companies," he says.

Yet, by combining their experience in material handling or warehouse management and the software and systems used to do it, these companies compete directly, and successfully, with technology vendors, Banker says. The matchup of 3M and HighJump should make for a stronger competitor in one particular area of supply-chain execution: warehouse management. And 3M and HighJump might be able to bring innovative solutions to the tricky problem of attaching RFID tags to certain types of boxes and packages that tend to be hard for an RFID system to read. "That's a place where 3M's domain expertise and the HighJump technology can marry up and create some synergy," Banker says.

3M's move is the Scotch Tape equivalent of Amazon.com Inc.'s growing business as a services company for retail Web sites. Under its Merchant.com program, Amazon provides E-commerce technology and services, including fulfillment and customer support, to companies such as Borders Group Inc. and Target Corp. It's one of the smallest but fastest-growing parts of Amazon's business, accounting (along with marketing revenue) for $112 million in sales last year, a 29% increase over 2002.

No wonder, then, International Paper wants to parlay what it's learned about deploying RFID in its own business into a revenue-generating consulting service (See "Ready For RFID?" Jan. 5, 2004) "As we looked out across all the players in this industry, we see a lot of participants, but there's not a whole lot of folks that can put everything together and deliver a turnkey solution," Alan Clark, general manager of Smart Packaging with International Paper, said in a December interview. "We've learned a lot as we've implemented RFID in our own operations."

International Paper, however, is reluctant to make too much of its new venture. "We're a paper, packaging, and forest-products company, and we always will be," a spokesman explains. "That's what we want to be known for." Perot Systems' Champy says that's a reasonable attitude. "They know they're a products company," he says.

Yet, what it means to be a products company, or an aerospace company, or a package-delivery company is changing in ways that are sometimes subtle, sometimes multibillion-dollar bets. Old categorizations no longer stick--even with 3M's industrial-grade glue.

Editor's Choice
Samuel Greengard, Contributing Reporter
Cynthia Harvey, Freelance Journalist, InformationWeek
Carrie Pallardy, Contributing Reporter
John Edwards, Technology Journalist & Author
Astrid Gobardhan, Data Privacy Officer, VFS Global
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing