Joe Cowan was appointed chief executive of supply chain software specialist Manugistics last July, following 14 consecutive quarters that saw the company haemorrhaging cash.

Since taking charge, Cowan has organised Manugistics into four dedicated business units to focus on retail and consumer goods markets, revenue management and the public sector.

Computing met Cowan to discuss his progress and his plans to grow the business further.

How has Manugistics responded to changes in its market since you took charge?

Manugistics has gone through many changes recently, and those changes reflect what I think is going on in the retail market. I have made adjustments to the company to take full advantage of that.

Manugistics had been losing money. I was brought in last July really to teach it to make money. Our company lost its focus. It tried to do too many things in too many markets, with too many products. I described it as 'chasing too many rabbits'.

How are you serving your customers differently?

I've restructured the company around our core markets: consumer goods and retail. And I'm not talking about consumer packaged goods as a broad category term, but the consumer goods that are supplied to retailers. We really believe that if you're a retailer and are going to solve your logistical, supply chain problems today, you have to engage or interact more closely with your suppliers.

From Manugistics' standpoint, we not only work with the retailers, but we also work with their suppliers. So it's easy to say, if I have Manugistics systems at both ends of the supply chain, we should be a bridge to help solve those problems. If consumer goods companies, for example, are serious about the supply chain, they'll understand that managing that chain, having the right products to fulfil their customers' commitments and needs, at the right price, in the right place and at the right time, is key.

Enterprise resource planning (ERP) vendors are becoming increasingly involved in the supply chain market. Do you view them as a threat?

ERP players don't see the problems the way we do, can't solve problems the way we do and don't have the products or the knowledge we have. This cuts to the core of what's going on in the consumer goods market today. The ERP companies say: 'Buy us, we can solve all your problems.' That may be true if I'm looking at customer relationship management or HR, because they're static systems that don't change. I don't believe an ERP system can solve the problems in a supply chain because when you start getting into sophisticated algorithms for a dynamically changing environment, the ERP companies are coming up against difficult challenges.

What can specialist supply chain software deliver that a generic ERP platform can't?

The supply chain isn't static: it's dynamic and constantly changing. Customers may change, where the stores are may change, the numbers of distribution centres may change, and buying habits may change.

That means I can't go in and install a system one day and expect that system to work the same way year after year. It's going to have to be constantly tuned or adapted. And that's the golden opportunity for Manugistics in the consumer goods market. If you look inside an organisation and find the supply chain or business people sitting at an equal level, you're going to find they're serious about their supply chain. If you find those supply chain people pushed down below the IT people, those companies typically won't be that serious about their supply chain because their core competence will be focused on IT. Those are the ones that tend to say: 'Let's standardise, let's buy from one vendor - an ERP company - because it integrates easier.' And they are the ones that are starting to struggle and finding out that this is not solving their problems.

How do you think the market will change?

I think there's a pendulum effect in the market: a few years ago it was best-of-breed; now it's buy from one vendor and integrate everything else onto that generic platform. I think we'll see that pendulum come back as companies realise there's a place for best-of-breed IT.

There's also the fact that a lot of large retailers, such as the Wal-Marts of this world, are putting pressure on the consumer goods company to take cost out, which means they have to do a better job managing the supply chain. We think the consumer goods market is really further ahead than retail in solving its supply chain problems.

Oracle recently announced it is acquiring Retek, one of your competitors. Will the sector continue to consolidate?

I've made strategic cuts in some areas and invested in others, where we can focus on our long-term future.

There are rumours out there that I was brought in to 'paint the pig' and then go and sell the company, but that's not true. We created a strategy to get back towards profitability, and we're well along that path.

Last year, we had 600 or 700 software companies operating in the supply chain, so consolidation is going on and you'll see merger and acquisition activity continue. But I want Manugistics to be the consolidator, not the one to be consolidated.

What do you think? Email feedback@computing.co.uk