1. A case study on
-Procurement in
Honeywell & Vedanta
NewGate India
Hyderabad, Andhra Pradesh- 500038
Website: www.newgate.in
Email: contact@newgate.in
Slideshare URL :
E-Business http://www.slideshare.net/newgateindia
&
Business Intelligence 1
2. Purpose of this case:
• Understanding the nature of transaction in Honeywell & Vedanta
• To know the e-procurement process in Honeywell & Vedanta
• How they differ from each other
• IT technology incorporated in each company to carry out the
procurement system
• Benefits of e-procurement system
• Challenges faced by each company
• Why Honeywell uses SAP(ERP system)
• How Vedanta manages with other alternatives instead of using
SAP(ERP system)
• Future of both companies with respect to e-business
2
Fri
25 Feb
3. Implementation of SAP in Honeywell’s e-business applications and how other
industry like Vedanta manage their procurement system without using SAP
BENCHMARK – 2 0 1 1
keeping the system simple by incurring less cost on technology
Nature of transaction
Honeywell Uses SAP Vedanta uses other Alternatives
• Number of items ordered are very • Number of ordered raise are very
high. ( Thousands orders a month per less. ( 5 or 6 times a month per plant)
plant) • Volume of transaction is huge
• Volume of transaction is less (1000 tons per week/team)
( 10 to 100 electronics items per • Safety is an important concern
week/team) • Delivery on right time is must
• Security is an important concern • Multiple orders is met from same
• Authentication and approval is must vendors
• Single order is met from multiple • The products are much standardized
vendors and thus repeatability of same order
3
• The products are much customized and is more Fri
thus repeatability of same order is less
25 Feb
4. Overview of -Commerce
Consists of the Buying and Selling of
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Products or Services over Electronic
Systems such as the Internet and other
Computer Networks
Internet and WWW plays a very important
role .
E-Business gave birth to
Intelligence
Organizational Structure
• CIO
• Technical Support team Knowledge
• Admin Operators
Evolution of Studies Information
• Server Management
• Knowledge Management 4
• Database Management System Data
• Software Engineering Fri
• IT Management 25 Feb
5. e-Procurement
BENCHMARK – 2 0 1 1
Benefits of e-Procurement
Buyer Productivity Increased
Functions Organized
of e-Procurement Increased predictability
Healthy Forecast of arrival of
Purchase of Raw orders before hand
Materials Redundant Data Entry limited
Tracking Vendors
Lower Transaction Cost
Real time inventory
updating Shorter Order-Time Cycle
Billing, Payment, Invoice Lower Inventories(Low Taxes)
Tracking Shipping Increased Visibility of key
Knowing status of orders business goals 5
Improved Product quality
Fri
Improved Customer satisfaction 25 Feb
6. Honeywell Overview
Major conglomerate company that produces a
BENCHMARK – 2 0 1 1
variety of consumer products, engineering In India
services and aerospace systems.
1. Aerospace ( market Leader) • Technology Solutions
2. Automation System ( market Leader) Lab
• Automation ( Turbo )
3. Transportation System ( market challenger)
• Industry Process
4. Speciality Materials ( Niche market) Automation
5. Building construction solution ( Niche
market)
It is a Fortune 100 company.
It is a $36.556 billion Company.
( as per 2008)
6
Fri
25 Feb
7. Honeywell e -procurement system
Users Involved
BENCHMARK – 2 0 1 1
Departments Involved
Production and Operation
Department
Procurement Department
Marketing Department
Finance Department
Direct Users Indirect Users
Operational Engineer ( Intranet) Auto generic mails
Project Managers ( Intranet) HR
Procurement Team ( Intranet) Domain/BU Leads
7
Inventory team ( Intranet) Alert
Vendors ( Extranet) Accounts Team Fri
25 Feb
8. Honeywell e -procurement system
Technology Used
BENCHMARK – 2 0 1 1
SAP(ERP package)
Data warehouse Routers/Switches
(Data-mining)
Intranet/Extranet
8
Auto generic Mail
Servers Fri
25 Feb
9. Concept Behind
BENCHMARK – 2 0 1 1
- - Procurement System
9
CLIENT SERVER MODEL Fri
25 Feb
11. DOMAIN MAIL
PRODUCTION COPY OF INVOICE
LEAD ( Buyer)
• Fill the Form,
• Raise Order
PROJECT INVOICE
A
• If pending MANAGER INFORM
L ACCOUNTS
• Wrong Code E TEAM
O • Approve Order,
R R • Reject any
specific Item
T D
E
R
PROCUREMENT RECEIVING
ORDER DISPATCH HOUSE
TEAM
OUTSIDE If not available If available
VENDORS
INVOICE
• Quantity Available ERP/SAP
• Code mapping
MAIL
EXTRANET USERS BENCHMARK-2011,PSGIM,Coimbatore 11
DATA WAREHOUSE
13. VEDANTA Overview
BENCHMARK – 2 0 1 1
It is an international mining and metals
company
It is the largest mining and non-ferrous
metals company in India
It has the highest capacity power plant
Its main products are
copper ( market Challenger )
Zinc ( Market Leader)
Aluminium ( Market Leader)
lead ( Niche market )
iron ore ( market Challenger)
It is a $7.9 billion Company.
13
Fri
25 Feb
14. Vedanta e -procurement system
Users Involved In Vedanta
BENCHMARK – 2 0 1 1
Departments Involved
Production and Operation
Department
Procurement Department
Marketing Department
Finance Department
HR Department
Direct Users Indirect Users
Operational Employee
Procurement In charge
HR (Reimbursement)
Project Manager 14
Accounts Team Inventory Team
Fri
Supplier
25 Feb
15. BENCHMARK-2011, PSGIM ,Coimbatore
Vedanta e -procurement system
Technology Used
Microsoft excel
Routers/Switches
Internet
Common Share
drive.
15
Servers Fri
25 Feb
16. Concept Behind
- Procurement System
BENCHMARK – 2 0 1 1
16
SHARE DRIVE ON NETWORK Fri
25 Feb
17. PRODUCTION Common share drive on network
( Buyer)
C ( Both A & B)
B A
HR
Data A
DATA DATA
ACCOUNTS C
Data A
PROJECT
MANAGER
Data A TEMPORARY ACCESS
SUPPLIER
(Seller)
Data B
BENCHMARK-2011,PSGIM,Coimbatore 17
18. Fill the excel sheet SHARE PROCUREMENT FORM
Raise Order
DATA Supplier
A UPDATE THE FILE & SHARE
(Buyer)
Production TEMPORARY ACCESS
(Buyer) SHARE INVOICE
S
S
H
A H Check the orders
R A Check Availability
E R Prepare invoice
E SALARY
I ACCOUNTS
N TEAM Quantity
F Available
V
O O Code
I R mapping
C M APPROVE
E
If reimbursement DATA WAREHOUSE
DATA HR
B SHARE DATA B
SHARE DATA
Approves
reimbursement Inform by MAIL
MARKETING
ACCOUNTS PAYEMENT DONE E-Transfer
TEAM BENCHMARK-2011,PSGIM,Coimbatore
If direct payment
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21. Honeywell Vedanta
Merits of Honeywell Merits of Vedanta
BENCHMARK – 2 0 1 1
High Security. Cost-Effective.
Less Data Entries. Easy Understanding.
Higher Reliability. Less Time-taking.
Highly Organized. Less Maintenance Cost.
Less Updates required.
Auto generated Mails.
Demerits of Honeywell Demerits of Vedanta
Always Honeywell Codes Accessibility is less.
are not available. Less Security.
Over standardization- Lot of Data Entries.
Difficult to Access. Individual Responsibility.
More number of steps.
21
Time-taking process. Fri
25 Feb
22. Parameter to compare
BENCHMARK – 2 0 1 1
Honeywell Vedanta
4 days to place an order 2 hours for placing order
Time (Because of approval & (No approval, No authentication
authentication online) needed online)
Steps • 8 to 11 serial transactions • 5 to 6 serial transactions
• 2 parallel transactions • 1 parallel transactions
• Only 1 to 1 access • Many users involved at a time
• No leakage of information to • More than 2 people can be
3rd party operating on the same
Security
• Login system for all members document at the same time
• No login system
• Initial one time form fill-up is • In the whole process you have
required to undergo filling up of excel 22
Simplicity • Rest is just clicking sheets at least 4 times
• Not much automated
23. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta
Conclusion
BENCHMARK – 2 0 1 1
• Different companies implement different e-business
technologies
• The adoption of technology depends upon nature of
business, resource availability, complicacy, cost, time,
security concerns and the culture of business.
• Ability to cope with change as managing a change
is a greater risk.
• Honeywell where the culture motivates them to accept
changes easily would switch over to next generation
technology.
• Vedanta may adopt ERP system in near future if generates a
good return on investment on technology. 23
Fri
25 Feb
