Manugistics says new alliance will help track clients' sales Rockville firm says move to provide retail data

March 11, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Manugistics Group Inc. of Rockville said yesterday that a new alliance with a Chicago company will let the production-planning software company track retail sales of its clients' products, extending Manugistics' potential reach farther into the large and lucrative consumer-goods sector.

Manugistics' name, derived from the words manufacturing and logistics, describes its business as mostly software that lets producers decide how much raw material to order, how much of a given product to make and how to ship it the most cheaply. What Manugistics and its competitors have lacked is a way to match those capabilities with the ability to track how a product is selling at retail, which would give the most important planning information of all.

The deal announced yesterday joins Manugistics with Information Resources Inc., which makes systems that let supermarkets and consumer-goods companies track sales and inventories.

No financial terms were announced, but a Manugistics executive said the deal calls for Manugistics to buy certain retail-tracking technology and the services of about 20 IRI employees. Each company will be able to sell some technologies developed by the other.

"Once manufacturers ship to a retailer, they have no idea what happens to [products]," said Mary Lou Fox, senior vice president of Manugistics. "This allows manufacturers and retailers to assure that a product is in stock when consumers want it, and also reduces costs."

Fox said Manugistics, which controls about a third of the market for logistics software for manufacturers, wants to expand its services to retailers. But she said the short-term focus of the deal is strengthening Manugistics' position among companies that manufacture consumer products.

The company would not disclose how much the deal is likely to add to sales or profits in the short term. But one analyst who follows Manugistics said the initial impact isn't likely to be much.

"I don't think, on a numbers basis, this is a big deal," said Everen Securities analyst Bill Lanzon. "I'm not [projecting] a lot of revenue from this -- it's too early to say."

However, it was not too early for Wall Street to pump expectations into Manugistics stock, which has slumped over six weeks since topping out at $53.75 in January. Manugistics' shares rose $2.50 to $38.25 yesterday.

Pub Date: 3/11/97

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