Honeywell and Vedanta both implement e-procurement systems but differ in their approaches. Honeywell uses the SAP ERP system which provides high security, reliability and organization but has a more complex and time-consuming process. In contrast, Vedanta uses a simpler file-sharing approach on a common network drive which has lower costs and complexity but also less security and organization. The appropriate system depends on factors like the business nature, resources, and ability to accept changes.

1. A case study on
-Procurement in
Honeywell & Vedanta
NewGate India
Hyderabad, Andhra Pradesh- 500038
Website: www.newgate.in
Email: contact@newgate.in
Slideshare URL :
E-Business http://www.slideshare.net/newgateindia
&
Business Intelligence 1

2. 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

3. Implementation 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. Overview of -Commerce
Consists of the Buying and Selling of
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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. 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. 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)
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Fri
25 Feb

7. 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
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Inventory team ( Intranet) Alert
Vendors ( Extranet)  Accounts Team Fri
25 Feb

8. Honeywell e -procurement system
Technology Used
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SAP(ERP package)
Data warehouse Routers/Switches
(Data-mining)
Intranet/Extranet
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Auto generic Mail
Servers Fri
25 Feb

9. Concept Behind
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- - Procurement System
9
CLIENT SERVER MODEL Fri
25 Feb

10. SERVER
EXTRANET
S-2 DATAWAREHOUSE
BENCHMARK – 2 0 1 1
D-2
SERVER-1
D-3
PROCUREMENT D-1
S-1 USER-3
D-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
TEAM
OUTSIDE If not available If available
VENDORS
INVOICE
• Quantity Available ERP/SAP
• Code mapping
MAIL
EXTRANET USERS BENCHMARK-2011,PSGIM,Coimbatore 11
DATA WAREHOUSE

12. VENDORS of Honeywell
BENCHMARK – 2 0 1 1
12
Fri
25 Feb

13. VEDANTA Overview
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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
Fri
25 Feb

14. Vedanta e -procurement system
Users Involved In Vedanta
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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. BENCHMARK-2011, PSGIM ,Coimbatore
Vedanta e -procurement system
Technology Used
Microsoft excel
Routers/Switches
Internet
Common Share
drive.
15
Servers Fri
25 Feb

16. 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 FORM
Raise 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
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19. VENDORS of Vedanta
BENCHMARK – 2 0 1 1
VENDORS
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Fri
25 Feb

20. BENCHMARK – 2 0 1 1
Teaching Notes
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Fri
25 Feb

21. Honeywell Vedanta
Merits of Honeywell Merits of Vedanta
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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.
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Time-taking process. Fri
25 Feb

22. Parameter to compare
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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. Questions Please ????
24