Case Study on Business Intelliegnce
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Case Study on Business Intelliegnce

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E-procurement System

E-procurement System

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Case Study on Business Intelliegnce Presentation Transcript

  • 1. A case study on -Procurement in Honeywell & Vedanta BENCHMARK-2011 PSG Institute Of Management, Coimbatore Authors: Sunam Pal Kiran Varghese Jacob Alliance University School of Business E-Business &Business Intelligence 1 Friday, 25th January 2011
  • 2. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta Purpose of this case: BENCHMARK – 2 0 1 1• 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. PSGIM, Coimbatore E-procurement system of Honeywell & VedantaImplementation 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta Overview of -Commerce Consists of the Buying and Selling of BENCHMARK – 2 0 1 1 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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. PSGIM, Coimbatore E-procurement system of Honeywell & VedantaHoneywell e -procurement systemTechnology 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. PSGIM, Coimbatore Effective Communication Concept Behind BENCHMARK – 2 0 1 1 - - Procurement System 9 CLIENT SERVER MODEL Fri 25 Feb
  • 10. SERVER EXTRANET S-2 DATAWAREHOUSE BENCHMARK – 2 0 1 1D-2 SERVER-1D-3 PROCUREMENT D-1 S-1 USER-3D-4 INTRANET VENDORS PROJECT MARKETING ACCOUNTS 10 ENGINEER MANAGER MANAGER MANAGER Fri USER-1 USER-2 USER-3 USER-4 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 TEAMOUTSIDE If not available If availableVENDORS INVOICE • Quantity Available ERP/SAP • Code mapping MAIL EXTRANET USERS BENCHMARK-2011,PSGIM,Coimbatore 11 DATA WAREHOUSE
  • 12. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta VENDORS of Honeywell BENCHMARK – 2 0 1 1 12 Fri 25 Feb
  • 13. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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 plantIts 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta BENCHMARK-2011, PSGIM ,Coimbatore Vedanta e -procurement systemTechnology Used Microsoft excel Routers/Switches Internet Common Share drive. 15 Servers Fri 25 Feb
  • 16. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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 FORMRaise 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 18
  • 19. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta VENDORS of Vedanta BENCHMARK – 2 0 1 1 VENDORS 19 Fri 25 Feb
  • 20. PSGIM, Coimbatore Effective Communication BENCHMARK – 2 0 1 1 Teaching Notes 20 Fri 25 Feb
  • 21. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta 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
  • 24. PSGIM, Coimbatore E-procurement system of Honeywell & Vedanta BENCHMARK – 2 0 1 1 Questions Please ???? 24 Fri 25 Feb