November 4, 2004

Software firm finds niche in food safety

Kyle Stock  /  Post and Courier

Integrated Supply Chain Solutions is not exactly the sexiest name for a company, but it may not matter much when you're dealing with mad cow disease and ensuring the safety of food sent to U.S. troops fighting abroad.

Established to acquire struggling Cambar Software Inc. in 2002, ISC is building momentum under the stewardship of a few investors who had faith they could make money where others had fallen short. To get there, ISC spent most of the past two years streamlining its business model and retooling its software products. It just inked a contract with a German company that handles most of the food heading to U.S. troops overseas, including Iraq and Afghanistan.

As a private company, ISC doesn't reveal many numbers, but Robert Moore, the company's chief financial officer, said the deal was "huge." More importantly, it validated ISC's vision and created a spark that it hadn't seen in years.

"I wake up every morning, and I'm actually happy to go to work," said longtime employee Andrea Williams, who is director of product development.

Cambar Software was founded in 1981 with a diverse basket of computer applications, including products to keep track of purchasing, financials and inventory. The company grew steadily and eventually started to focus on inventory-management products that could be used with PCs. In late 2000, Cambar executives promised to grow to 100 jobs. At the same time, they committed to build a state-of-the-art, environmentally friendly building on five acres on the Cainhoy Peninsula. Cambar splurged on solar panels, an exercise facility and on-site day care for the 34,000-square-foot structure.

But as the tech industry crashed, so did Cambar. It found itself stretched too thin. Its diverse batch of clients switched to simpler, cheaper software systems. "That's when it became a struggle," Williams said. "Our customers were struggling, and that struggle kind of passed down."

The company's management trimmed payroll and made it known that Cambar was for sale. Enter Cecil Duffie, current chief executive officer of ISC and head of a group of private investors looking for a good technology company to buy in the wake of the dot-com bust.

Duffy had some previous success with technology. He founded Dial Page Inc., a Greenville-based wireless communications firm, which he sold to Nextel Communications in the mid-1990s. It was a big deal that garnered Duffie a lot of money and, more importantly, a lot of trust from investors like Moore who were interested in backing his ventures.

Moore was an investment banker, consulting for companies and closing acquisition deals. He met Duffie when he represented Nextel in the acquisition of Dial Page. Both men had vacation homes in the Charleston area and saw Cambar as a good investment. It was luck that the company was in the area that they both hoped to move to full time.

Duffie, with the backing of Moore and some others, made an offer. Cambar was employee-owned. Most of those who had a stake in the company voted in favor of the takeover. "Everybody was actually very excited," Williams said. "They felt that there was something to take forward."

After the acquisition, ISC's management spent 12 to 18 months strategizing. The new owners knew they needed to turn the business, but they weren't sure in what direction. After a lot of market research and meetings with consultants, the group settled on food distribution software.

"In today's day and age, if you're going to be successful as a software company, you've got to be focused on a niche," Moore said. "When we bought it, we thought there was some sound technology, a great group of employees, but we knew it needed this focus."

There are somewhere around 3,000 food distributing companies in this country, most of which use some sort of homegrown system to track shipments, measure stocks and fill orders. A lot of these in-house systems are inefficient, and many have trouble factoring in expiration dates and other food-safety issues that have been pushed into the public eye with recent outbreaks of mad cow and Asian bird flu.

"Very few distributors have deployed the kind of technology like we have ... so we saw a huge market potential," Moore said. "(Our software) can be used by a small distributor with $5 million in annual traffic or a global leader with more than $5 billion of work."

ISC's new management took Cambar's standard software platform and added a bunch of bells and whistles that made sense for food distribution. Now, ISC software is marketed as an out-of-the-box product that can be installed easily at any major warehouse and make that facility more efficient.

Steve Potter, a senior vice president at the International Foodservice Distributors Association, said there is a major push to cut costs among companies that ship food. "Customers have alternatives, and they want to do business with distributors that are reliable," Potter said. "The folks who succeed are the folks that satisfy their customers' needs. The way to do that is to be accurate, and the way to be accurate is to have good inventory control."

Thanks to its growth, ISC is hiring and has brought on about nine people in recent months. It now employs about 45 people. Whether ISC can truly compete remains to be seen. For now, however, Moore plans to hire about 10 additional people in coming months, based on the assumption that the market is wide open for tech products that help grease the wheels for food distributors.