A case study on

-Procurement in Honeywell & Vedanta

E-Business &

Business Intelligence 1

NewGate India Hyderabad, Andhra Pradesh- 500038

Website: www.newgate.in

Email: contact@newgate.in Slideshare URL :

http://www.slideshare.net/newgateindia

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

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Implementation of SAP in Honeywell’s e-business applications and how other industry like Vedanta manage their procurement system without using SAP

keeping the system simple by incurring less cost on technology

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Honeywell Uses SAP

• Number of items ordered are very high. ( Thousands orders a month per plant)

• Volume of transaction is less ( 10 to 100 electronics items per week/team) • Security is an important concern • Authentication and approval is must • Single order is met from multiple

vendors • The products are much customized and

thus repeatability of same order is less

Vedanta uses other Alternatives

• Number of ordered raise are very less. ( 5 or 6 times a month per plant)

• Volume of transaction is huge (1000 tons per week/team) • Safety is an important concern • Delivery on right time is must • Multiple orders is met from same

vendors • The products are much standardized

and thus repeatability of same order is more

Nature of transaction

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Overview of -Commerce Consists of the Buying and Selling of

Products or Services over Electronic Systems such as the Internet and other Computer Networks

Internet and WWW plays a very important role .

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Intelligence

Knowledge

Information

Data

E-Business gave birth to Organizational Structure • CIO • Technical Support team • Admin Operators

Evolution of Studies • Server Management • Knowledge Management • Database Management System • Software Engineering • IT Management

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e-Procurement

Benefits of e-Procurement Buyer Productivity Increased Organized Increased predictability Healthy Forecast of arrival of orders before hand Redundant Data Entry limited Lower Transaction Cost Shorter Order-Time Cycle Lower Inventories(Low Taxes) Increased Visibility of key business goals Improved Product quality Improved Customer satisfaction

Functions of e-Procurement

Purchase of Raw Materials Tracking Vendors Real time inventory updating Billing, Payment, Invoice Tracking Shipping Knowing status of orders 5

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Honeywell Overview Major conglomerate company that produces a variety of consumer products, engineering services and aerospace systems.

1. Aerospace ( market Leader)

2. Automation System ( market Leader)

3. Transportation System ( market challenger)

4. Speciality Materials ( Niche market)

5. Building construction solution ( Niche market)

It is a Fortune 100 company.

It is a $36.556 billion Company.

( as per 2008)

In India • Technology Solutions

Lab • Automation ( Turbo ) • Industry Process

Automation

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Direct Users Operational Engineer ( Intranet) Project Managers ( Intranet) Procurement Team ( Intranet) Inventory team ( Intranet) Vendors ( Extranet)

Indirect Users Auto generic mails HR Domain/BU Leads

Alert Accounts Team

Departments Involved Production and Operation Department Procurement Department Marketing Department Finance Department

Users Involved

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Honeywell e -procurement system

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SAP(ERP package)

Technology Used

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Honeywell e -procurement system

Servers

Routers/Switches Data warehouse (Data-mining)

Intranet/Extranet

Auto generic Mail

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Concept Behind - - Procurement System

CLIENT SERVER MODEL 9

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SERVER-1

PROCUREMENT

ENGINEER PROJECT

MANAGER

MARKETING MANAGER

ACCOUNTS MANAGER

SERVER

VENDORS

EXTRANET

DATAWAREHOUSE

D-1

D-2

D-3

D-4

USER-1 USER-2 USER-3 USER-4

USER-3

S-2

S-1

INTRANET

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DOMAIN LEAD

PROJECT MANAGER

• Fill the Form, • Raise Order

• Approve Order, • Reject any

specific Item

PROCUREMENT TEAM

ORDER

ORDER

If available If not available

DATA WAREHOUSE

OUTSIDE VENDORS

INVOICE

DISPATCH RECEIVING

HOUSE

ALERT

• If pending • Wrong Code

• Quantity Available • Code mapping

MAIL

INVOICE

COPY OF INVOICE

ACCOUNTS TEAM

INFORM

EXTRANET USERS

PRODUCTION ( Buyer)

ERP/SAP

MAIL 11 BENCHMARK-2011,PSGIM,Coimbatore

VENDORS of Honeywell

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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.

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VEDANTA Overview

Users Involved In Vedanta

Direct Users Operational Employee Procurement In charge HR (Reimbursement) Accounts Team Supplier

Indirect Users

Project Manager Inventory Team

Departments Involved Production and Operation Department Procurement Department Marketing Department Finance Department HR Department

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Vedanta e -procurement system B

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Technology Used

Microsoft excel

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Vedanta e -procurement system

Servers

Routers/Switches

Internet

Common Share drive.

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Concept Behind - Procurement System

SHARE DRIVE ON NETWORK 16

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C

B

DATA

A

DATA

PRODUCTION ( Buyer)

C ( Both A & B)

HR Data A

ACCOUNTS Data A

SUPPLIER (Seller) Data B

TEMPORARY ACCESS

PROJECT MANAGER

Data A

Common share drive on network

17 BENCHMARK-2011,PSGIM,Coimbatore

Production (Buyer)

Fill the excel sheet Raise Order

Supplier (Buyer)

SHARE PROCUREMENT FORM

Check the orders Check Availability Prepare invoice

Quantity Available Code mapping

UPDATE THE FILE & SHARE

SHARE INVOICE

MARKETING ACCOUNTS

TEAM

SHARE IN VOICE

SHARE

FORM

DATA WAREHOUSE If reimbursement

If direct payment PAYEMENT DONE

HR

SALARY ACCOUNTS

TEAM

APPROVE

Approves reimbursement

TEMPORARY ACCESS

SHARE DATA B SHARE DATA

Inform by MAIL

E-Transfer

DATA A

DATA B

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VENDORS of Vedanta

VENDORS

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Teaching Notes 20

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Merits of Honeywell High Security. Less Data Entries. Higher Reliability. Highly Organized.

Less Updates required. Auto generated Mails.

Demerits of Honeywell Always Honeywell Codes are not available. Over standardization- Difficult to Access. More number of steps. Time-taking process.

Merits of Vedanta Cost-Effective. Easy Understanding. Less Time-taking. Less Maintenance Cost.

Demerits of Vedanta Accessibility is less. Less Security. Lot of Data Entries. Individual Responsibility. 21

Honeywell Vedanta

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Parameter to compare

4 days to place an order (Because of approval & authentication online)

2 hours for placing order (No approval, No authentication needed online)

• 8 to 11 serial transactions • 2 parallel transactions

• 5 to 6 serial transactions • 1 parallel transactions

• Only 1 to 1 access • No leakage of information to

3rd party • Login system for all members

• Many users involved at a time • More than 2 people can be

operating on the same document at the same time

• No login system

• Initial one time form fill-up is required

• Rest is just clicking

• In the whole process you have to undergo filling up of excel sheets at least 4 times

• Not much automated

Time

Steps

Security

Simplicity 22

Honeywell Vedanta

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Conclusion • 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.

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E-procurement system of Honeywell & Vedanta B

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Questions Please ????