Downturn Claims Two SCM Players

Ability to close U.S. office, Converge abandons supply chain solutions

Tempe, AZ  October 4, 2001  The lineup of supply chain solution providers in the U.S. market got a little smaller this week with announcements that Ability, a provider of inventory optimization software, was closing its North American headquarters in Atlanta, Ga., and electronics e-marketplace Converge was giving up development of its software suite.

A spokesperson for Ability, in a statement, blamed the closing on tight market conditions. "While Ability offered&strong solutions to mid-sized distributors, it seems the economy was a factor in limiting business opportunities," the statement read.

Ability is headquartered in Johannesburg, South Africa. There was no word on whether the South African operations would continue, but the company has an established customer base in that country. The U.S. operation represented an attempt to extend the company's reach into the world's largest B2B market.

Also this week, it was reported that Converge, an e-marketplace for the high-tech industry, was getting out of the supply chain software business.

The e-marketplace said in a statement that the slowing economy and low adoption rates for its suite of supply chain management solutions made it impossible for the company to raise additional funding to support further development of the applications.

Peabody, Mass.-based Converge was founded in May 2000 as eHITEX by 15 leading high-technology OEMs, contract manufacturers, component manufacturers and distributors to deliver supply chain efficiencies using Internet technology. The company's participant list reads like a Who's Who of high tech and electronics firms, including Agilent, Canon, Compaq and Hewlett-Packard.

In addition to offering e-marketplace services, Converge attempted to develop various supply chain solutions, including applications for real-time logistics monitoring and alerting, supply chain planning and order management.

Converge will close its Cupertino, Calif., office and lay off an unknown number of staff.