Adding Content to Sourcing

Tradec offers service to give companies access to market intelligence within sourcing process

San Jose, CA — April 15, 2003 — Cost management solution provider Tradec rolled out a new service that provides manufacturers with third-party market intelligence as a way of helping companies improve their sourcing efforts.

High-tech manufacturers like Juniper Networks, Jabil Circuit and Solectron use Tradec's direct materials solution, the Tradec Cost Management System, or TCMS, to run such processes as commodity cost management, quotations management, tactical sourcing management, outsourced manufacturing management and supplier performance management.

Tradec's solution includes a technology platform that underlies its applications, as well as modules to run the individual processes it addresses, and the provider's approach is to help companies take a total cost of ownership (TCO) approach to their direct materials spend.

Now, in an effort to build on that TCO approach, Tradec has moved to integrate content and intelligence into the direct materials sourcing process by providing access to third-party information from within TCMS.

"Our customers identified almost from our first implementation that there was content and intelligence out on the Web from various providers that they wanted to see integrated into the Tradec application," said Troy Augustine, vice president of marketing for Tradec.

Specifically, Augustine said that companies were looking for content in the areas of supply risk (including visibility into supply risk due to component obsolescence, as well as the capability to identify functionally equivalent alternatives to reduce cost and risk), market intelligence (including historical performance and projections of currencies and commodities) and supplier discovery (including a means to search for supplier capabilities).

To meet these needs, Tradec has rolled out a new strategic sourcing content network called Tradec Network Services, incorporating third-party content that can be accessed from within TCMS in the course of a sourcing process.

To date, Tradec has signed up four content providers, including:

  • S&P Comstock, which provides real-time market data and financial information, including securities, foreign exchange and commodities data. Through S&P Comstock, Tradec customers can access current and historical currency exchange rates for use in making sourcing decisions, for example, to help them better understand currency risk exposure and better model the effect of exchange rate fluctuation over time.

  • PCNalert, a provider of real-time component information for the electronic supply chain. As iSourceonline reported earlier, PCNalert offers end-of-life notices (EOLs), product change notices (PCNs), datasheets and other critical component information. By accessing this information in context of the sourcing process, supply chain and procurement professionals have an opportunity to address supply continuity risks before they become problems.

  • SiliconExpert, which provides such electronic component information as cross-referencing, lifecycle status and parametric data. By accessing the SiliconExpert content, supply chain and procurement professionals have the opportunity to validate that part numbers are purchaseable and to identify lower cost alternatives.

  • iSuppli, a provider of electronics industry intelligence. By accessing iSuppli market intelligence data in context of TCMS, sourcing staff can measure their cost performance against the market. Tradec believes that the marriage of market pricing data and actual performance provides an objective framework for productive discussion between commodity managers and their suppliers.

Commenting on the new Tradec services, Tim Minahan, vice president of supply chain research at technology consultancy Aberdeen Group, recalled the old saw that what you don't know can, in fact, hurt you. "This is particularly critical in the high-tech manufacturing sector where globalization, technology advances and price fluctuations occur at a blistering pace," Minahan said.

The analyst went on to suggest that the content that can be access through Tradec's new service could fill a gap in manufacturers' supply strategies and position users to make more accurate costing estimates and more informed sourcing decisions.

The new services are available on a monthly or annual subscription basis, depending on the third-party provider's model, with prices ranging from about $1,000 monthly to $30,000 annually, depending on the content provider.

Tradec itself doesn't make money off the services, according to Ed Winder, the provider's chairman, president and CEO, "The idea here," he explained, "is that we're a facilitator. If this is something that our client needs, we facilitate them getting it, as opposed to us getting into the content business. It's not a deliverable of Tradec, it's a deliverable of whomever we partner with."

Companies could access the data separately, of course, but Augustine suggested that combining the content with the provider's sourcing solution offers certain benefits. "The advantage is that the data are integrated and that they are put in the context of sourcing," he said. "For instance, when you access Comstock through Tradec, you can run analyses that tap into the data to run what-if scenarios."