Controlling Costs at Juniper

Telecom OEM deploys material cost management system from Tradec

San Jose, CA  July 8, 2002  Juniper Networks has deployed software from solution provider Tradec in a bid to control its material costs.

Juniper, which manufactures routers that direct Internet data traffic, has implemented Tradec's Material Cost Management System (MCMS). The system is fully deployed and operational, with more than 150 Juniper Networks suppliers connected to the system.

Tradec said MCMS enables manufacturing companies to reduce material spend, improve productivity and manage supplier relationships by providing visibility into spending and cost trends, intelligence into projected future costs and control over the cost reduction process.

With business process modules specifically designed to address commodity management, outsourced manufacturing management, new product introduction and new business quotation processes, MCMS helps companies put in place a process to actively and systematically manage material costs, according to the solution provider.

Material costs are a major component of product cost for original equipment manufacturers, said Tim Minahan, vice president of supply chain research for technology consultancy Aberdeen Group.

"For system OEMs, nearly 85 percent of product cost is driven by materials," Minahan said. "Implementing strategic sourcing systems, such as that provided by Tradec, can have an immediate and substantial impact on the bottom line."