A case study on

-Procurement in
Honeywell & Vedanta

NewGate India
Hyderabad, Andhra Pradesh- 500038

E-Business
&
Business Intelligence

Website: www.newgate.in
Email: contact@newgate.in
Slideshare URL :
http://www.slideshare.net/newgateindia
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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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25 Feb

Nature of transaction
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

BENCHMARK 2 0 1 1

Implementation of SAP in Honeywells 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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25 Feb

Overview of

-Commerce

Information

BENCHMARK 2 0 1 1

Consists of the Buying and Selling of

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

Data

Internet and WWW plays a very important

role .

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

Intelligence
Knowledge

Fri
25 Feb

e-Procurement

Functions
of e-Procurement
Purchase of Raw
Materials
Tracking Vendors
Real time inventory
updating
Billing, Payment, Invoice
Tracking Shipping
Knowing status of orders

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

BENCHMARK 2 0 1 1

Benefits of e-Procurement

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25 Feb

Honeywell Overview
1.
2.
3.
4.
5.

Aerospace ( market Leader)

Automation System ( market Leader)
Transportation System ( market challenger)
Speciality Materials ( Niche market)
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

BENCHMARK 2 0 1 1

Major conglomerate company that produces a

variety of consumer products, engineering
services and aerospace systems.

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

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

BENCHMARK 2 0 1 1

Honeywell e -procurement system

Users Involved

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Honeywell e -procurement system

SAP(ERP package)
Data warehouse
(Data-mining)

Routers/Switches

Intranet/Extranet
Auto generic Mail

BENCHMARK 2 0 1 1

Technology Used

8
Servers

Fri
25 Feb

CLIENT SERVER MODEL

BENCHMARK 2 0 1 1

Concept Behind
- - Procurement System

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25 Feb

SERVER

EXTRANET
D-2

DATAWAREHOUSE

SERVER-1
D-3

PROCUREMENT

S-1

D-1

USER-3

D-4

INTRANET
VENDORS

ENGINEER
USER-1

PROJECT
MANAGER

MARKETING
MANAGER

ACCOUNTS
MANAGER

USER-2

USER-3

USER-4

BENCHMARK 2 0 1 1

S-2

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DOMAIN
LEAD

MAIL

PRODUCTION
( Buyer)

Fill the Form,

Raise Order

If pending
Wrong Code

ORDER

OUTSIDE
VENDORS

COPY OF INVOICE

A
L
E
R
T

INVOICE

PROJECT
MANAGER
O
R
D
E
R

INFORM

Approve Order,
Reject any
specific Item

PROCUREMENT
TEAM

ACCOUNTS
TEAM

DISPATCH

RECEIVING
HOUSE

If available

If not available

INVOICE
Quantity Available
Code mapping

EXTRANET USERS

ERP/SAP
MAIL

BENCHMARK-2011,PSGIM,Coimbatore

DATA WAREHOUSE

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VENDORS of Honeywell
BENCHMARK 2 0 1 1
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25 Feb

VEDANTA Overview

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.

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

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

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

Indirect Users
Project Manager
Inventory Team

BENCHMARK 2 0 1 1

Vedanta e -procurement system

Users Involved In Vedanta

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Technology Used
Microsoft excel

Routers/Switches
Internet

Common Share
drive.

BENCHMARK-2011, PSGIM ,Coimbatore

Vedanta e -procurement system

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Servers

Fri
25 Feb

SHARE DRIVE ON NETWORK

BENCHMARK 2 0 1 1

Concept Behind
- Procurement System

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25 Feb

PRODUCTION
( Buyer)
C ( Both A & B)

Common share drive on network

HR
Data A

DATA

DATA

ACCOUNTS
Data A
PROJECT
MANAGER
Data A

TEMPORARY ACCESS

SUPPLIER
(Seller)
Data B
BENCHMARK-2011,PSGIM,Coimbatore

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Fill the excel sheet

Raise Order

SHARE PROCUREMENT FORM

DATA
A

UPDATE THE FILE & SHARE

Production
(Buyer)
S
H
A
R
E
I
N
V
O
I
C
E

SALARY
ACCOUNTS
TEAM

F
O
R
M

DATA
B

MARKETING
ACCOUNTS
TEAM

TEMPORARY ACCESS

SHARE INVOICE

S
H
A
R
E

APPROVE
If reimbursement

Supplier
(Buyer)

Check the orders

Check Availability
Prepare invoice
Quantity
Available
Code
mapping

DATA WAREHOUSE
HR

SHARE DATA B

SHARE DATA
Approves
reimbursement

PAYEMENT DONE
If direct payment

BENCHMARK-2011,PSGIM,Coimbatore

Inform by MAIL

E-Transfer
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VENDORS of Vedanta
BENCHMARK 2 0 1 1

VENDORS

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25 Feb

BENCHMARK 2 0 1 1

Teaching Notes

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25 Feb

Honeywell

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

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

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

BENCHMARK 2 0 1 1

Merits of Honeywell
High Security.
Less Data Entries.
Higher Reliability.
Highly Organized.
Less Updates required.
Auto generated Mails.

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Time

4 days to place an order

(Because of approval &
authentication online)

2 hours for placing order

(No approval, No authentication
needed online)

Steps

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

Security

Simplicity

BENCHMARK 2 0 1 1

Parameter to compare
Honeywell
Vedanta

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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.

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25 Feb

Questions Please ????

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