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A case study on
-Procurement in Honeywell & Vedanta
E-Business &
Business Intelligence 1
NewGate India Hyderabad, Andhra Pradesh- 500038
Website: www.newgate.in
Email: [email protected] 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
2
Fri 25 Feb
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
3
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
BEN
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Fri 25 Feb
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 .
4
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
BEN
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Fri 25 Feb
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
6
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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
7
Honeywell e -procurement system
Fri 25 Feb
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SAP(ERP package)
Technology Used
8
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
10
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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
INVOICE
COPY OF INVOICE
ACCOUNTS TEAM
INFORM
EXTRANET USERS
PRODUCTION ( Buyer)
ERP/SAP
MAIL 11 BENCHMARK-2011,PSGIM,Coimbatore
VENDORS of Honeywell
12
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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.
13
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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
14
Vedanta e -procurement system B
ENC
HM
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0 1
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Fri 25 Feb
Technology Used
Microsoft excel
15
Vedanta e -procurement system
Servers
Routers/Switches
Internet
Common Share drive.
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11
, PSG
IM ,C
oim
bato
re
Fri 25 Feb
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
18 BENCHMARK-2011,PSGIM,Coimbatore
VENDORS of Vedanta
VENDORS
19
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Teaching Notes 20
Fri 25 Feb
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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
Fri 25 Feb
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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.
23
E-procurement system of Honeywell & Vedanta B
ENC
HM
AR
K – 2
0 1
1
PSGIM, Coimbatore
Fri 25 Feb
24
Questions Please ????