Case Study on Business Intelliegnce

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A case study on

-Procurement in Honeywell & Vedanta

Authors:

Sunam PalKiran Varghese Jacob

Alliance University School of Business

Friday, 25th January 2011

E-Business &

Business Intelligence

BENCHMARK-2011PSG Institute Of Management,

Coimbatore

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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BENCH

MARK – 2 0 1 1

E-procurement system of Honeywell & VedantaPSGIM, Coimbatore

Fri25 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

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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

E-procurement system of Honeywell & VedantaPSGIM, CoimbatoreBEN

CHM

ARK – 2 0 1 1

Fri25 Feb

Overview of -CommerceConsists 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

E-procurement system of Honeywell & VedantaBEN

CHM

ARK – 2 0 1 1

Fri25 Feb

PSGIM, Coimbatore

e-Procurement

Benefits of e-Procurement Buyer Productivity IncreasedOrganizedIncreased predictabilityHealthy Forecast of arrival of orders before handRedundant Data Entry limitedLower Transaction CostShorter Order-Time CycleLower Inventories(Low Taxes)Increased Visibility of key business goalsImproved Product qualityImproved Customer satisfaction

Functions of e-Procurement

Purchase of Raw MaterialsTracking VendorsReal time inventory updatingBilling, Payment, InvoiceTracking ShippingKnowing status of orders 5


CHM

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PSGIM, Coimbatore

Fri25 Feb

Honeywell OverviewMajor 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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CHM

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PSGIM, Coimbatore

Fri25 Feb

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

Indirect UsersAuto generic mailsHR Domain/BU LeadsAlert Accounts Team

Departments InvolvedProduction and Operation DepartmentProcurement DepartmentMarketing DepartmentFinance Department

Users Involved

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Honeywell e -procurement systemE-procurement system of Honeywell & VedantaPSGIM, Coimbatore

Fri25 Feb

BENCH

MARK – 2 0 1 1

SAP(ERP package)

Technology Used

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Honeywell e -procurement system

Servers

Routers/SwitchesData warehouse (Data-mining)

Intranet/Extranet

Auto generic Mail


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Concept Behind- - Procurement System

CLIENT SERVER MODEL9

Effective CommunicationBEN

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PSGIM, Coimbatore

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SERVER-1

PROCUREMENT

ENGINEERPROJECT

MANAGERMARKETING 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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BENCHMARK-2011,PSGIM,Coimbatore 11

DOMAIN LEAD

ORDER

PROJECTMANAGER

• Fill the Form,• Raise Order

• Approve Order,• Reject any

specific Item

PROCUREMENTTEAM

ORDER

ORDER

If availableIf not available

DATA WAREHOUSE

OUTSIDE VENDORS

INVOICE

DISPATCHRECEIVING

HOUSE

ALERT

• If pending• Wrong Code

• Quantity Available• Code mapping

MAIL

INVOICE

COPY OF INVOICE

ACCOUNTS TEAM

PAYMENT

INFORM

EXTRANET USERS

PRODUCTION( Buyer)

ERP/SAP

MAIL

VENDORS of Honeywell

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CHM

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PSGIM, Coimbatore

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It is an international mining and metals company

It is the largest mining and non-ferrous metals company in IndiaIt 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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CHM

ARK – 2 0 1 1

PSGIM, Coimbatore

Fri25 Feb

VEDANTA Overview

Users Involved In Vedanta

Direct UsersOperational EmployeeProcurement In chargeHR (Reimbursement)Accounts TeamSupplier

Indirect Users

Project ManagerInventory Team

Departments InvolvedProduction and Operation DepartmentProcurement Department Marketing DepartmentFinance DepartmentHR Department

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Vedanta e -procurement systemE-procurement system of Honeywell & Vedanta

BENCH

MARK – 2 0 1 1

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PSGIM, Coimbatore

Technology Used

Microsoft excel

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Vedanta e -procurement system

Servers

Routers/Switches

Internet

Common Share drive.

BENCH

MARK-2011, PSG

IM ,Coim

batoreE-procurement system of Honeywell & VedantaPSGIM, Coimbatore

Fri25 Feb

Concept Behind- Procurement System

SHARE DRIVE ON NETWORK16


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C

B

DATA

A

DATA

PRODUCTION( Buyer)

C ( Both A & B)

HRData A

ACCOUNTS Data A

SUPPLIER(Seller)Data B

TEMPORARY ACCESS

PROJECT MANAGER

Data A

Common share drive on network


Production(Buyer)

Fill the excel sheetRaise Order

Supplier(Buyer)

SHARE PROCUREMENT FORM

Check the ordersCheck AvailabilityPrepare invoice

Quantity AvailableCode mapping

UPDATE THE FILE & SHARE

SHARE INVOICE

MARKETINGACCOUNTS

TEAM

SHARE

INVOICE

SHARE

FORM

DATA WAREHOUSEIf reimbursement

If direct paymentPAYEMENT DONE

HR

SALARYACCOUNTS

TEAM

APPROVE

Approves reimbursement

TEMPORARY ACCESS

SHARE DATA B

SHARE DATA B

CREDITED TO SALARY A/C

SHARE DATA

Inform by MAIL

E-Transfer

DATA A

DATA B

VENDORS of Vedanta

VENDORS

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Teaching Notes20

PSGIM, Coimbatore

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BENCH

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Effective Communication

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

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

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

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

Honeywell Vedanta E-procurement system of Honeywell & VedantaPSGIM, Coimbatore

Fri25 Feb

BENCH

MARK – 2 0 1 1

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

Simplicity22

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


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Questions Please ????

Case Study on Business Intelliegnce

Business

eprocurement process

procurement systemchallenges

honeywell vedanta benchmark

companywhy honeywell

honeywell vedantahow

honeywell vedantato

ebusiness 2fri25

system simple