Moving from physical to digital and beyond

Honeywell India, part of the US-based technology firm Honeywell International, is on the path of reinventing itself as part of new Chief Executive Officer Darius Adamczyk's mission to make the company more profitable and focus on those business units supported by the digital demands of customers.

The company, which is part of Fortune 100 companies,  has four strategic business units  Honeywell Aerospace, Home and Building Technologies (HBT), Safety and Productivity Solutions (SPS), and Honeywell Performance Materials and Technologies.

Honeywell, known for its industrial products in aerospace, automobile and process industries, which includes oil and gas, refining, petrochemicals, fertilisers, minerals, metals, mining, pulp and paper, energy and power, has established  seven manufacturing and five global technology and development centres spread across two million sq feet.  

Honeywell India President Vikas Chadha said the company is moving from pure physical products to a world of digital and physical products put together. "Therefore, we call it an industrial software company. Honeywell has already built a platform called Honeywell Sentience IoT Platform to build various applications on top of it," he says.

Honeywell Technology Solutions (HTS), established to support the development of Honeywell's Aerospace and Automation and Control Solutions businesses, has locations in  Bengaluru, Hyderabad, Madurai, and Gurugram, in India.

Chadha said Honeywell has a significant Make in India footprint in the country. "Today, we are among the most deeply invested multinationals in India, with more than 3,000 technology products, solutions, and innovative applications being engineered in India, for India, and for the rest of the world," he says.

"Our cutting-edge technologies manufactured in India contribute to aerospace and automotive products and services; control technologies for buildings, homes, and industry; and performance materials globally. Not only are we driving localisation and local innovation unique to India for our domestic customers via our East-for-East (E4E) strategy, but using our global scale and reach to take that innovation to the rest of the world, for our global customers through our east-to-rest strategy as well," he says.

Besides, Honeywell Transportation Systems to manufacture turbochargers at Pune in 2005, the company has Honeywell's Automation and Control Solutions business has manufacturing plants in Chennai and Dehradun.

"Today, our transportation systems manufacturing facility in Pune, with 1.5 million turbochargers' annual production capacity, has already put more than 1 million vehicles on Indian roads, reducing emissions, and improving fuel efficiency," he says.

As part of the company's expansion plan, this year Honeywell invested close to $200 million in a new facility in Bengaluru that houses around 5,000 employees. "Last year, we inaugurated a state-of-the-art Electro Magnetic Interference and Electro Magnetic Compatibility (EMI-EMC) lab at Honeywell Technology Solutions, Hyderabad. In 2012,  Performance Materials and Technologies launched the Honeywell India Technology Center (HITC) as fifth technology development center in India with $45 million in investment, the first and only such technology centre outside the US," he said.

Transformational journey

Honeywell is focusing on transformation from an industrial player to a software industrial player with a primary aim of enhancing customer experience.  All of these connected themes are heavily built on the software backbone.  HTS is expected to provide about 60% of Honeywell's growth over the next five years.

Honeywell Automation India (HAIL), a listed company with revenues in excess of  $350  million, is leader in providing integrated automation and software solutions, including process solutions and building solutions. It has presence in Pune, Vadodara, Bengaluru, Hyderabad, Mumbai, Chennai, Gurugram, Kolkata, and Jamshedpur.

HAIL's seventh manufacturing facility at Pune is into integrated factory testing, quality control and advanced manufacturing engineering for Honeywell's automation business in India. It also gives full suite of process solutions. Its key products include shifters, pressure switches, limit switches, position sensors, speed sensors, and hour meters.

HAIL Managing Director Ashish Gaikwad says, about 10 years ago, Honeywell hired engineers with electrical, mechanical, civil, and chemical degrees. "But today, we have roughly about 23,000 engineers world over. About 50% of those are software engineers, which is a big shift for a company like Honeywell. About 8,000 are actually based in Bengaluru, Madurai, and Hyderabad," he said.

"We want to look at how do we make sure that this software and the combination of the physical equipment and the software side, how it is going to solve some of the unsolved problems which were otherwise not possible," says Gaikwad.

The whole intent is to look at the data that gets generated every minute, every second, there is huge amount of data. "In the past, people just used to collect it and ignore it. It used to be there for historical analysis purpose so that the company can do a lot of corelation between different sets of data.  The company is developing connected plant where it is assured that  each of these equipment are functioning at their right efficiency," he says.

Realising the need for special expertise and requirement of very different skills the company has invested in creating what we call as cyber security labs. "We have three labs globally to serve the entire set of Honeywell customers," he said.

Role of  Bengaluru

Bengaluru plays a pivotal role in Honeywell's industrial software transformation as the company has today roughly about 50,000 engineers worldwide, and about 50% of those are software engineers who are located in Bengaluru, along with other centres in Madurai and Hyderabad.

Bengaluru is driving a lot of innovation that Honeywell wants to do in cyber industrial space/software industrial space. The company is driving many initiatives in robotics and drone space also.

Honeywell developed a software platform called Honeywell Sentience IoT Platform to take on the new challenges. It is different from GE's Predix platform, where others will come and join, and then something will happen automatically.

"Honeywell's approach is very different that we have the infrastructure  that has component to store data, to do analytics, visualisations and transmit the data," he said.

Here the company is taking specific industry problems that are haunting the industry right now but are unable to solve them due to certain limitations. "Now how do we leverage the power of connected and how do we then bring more insights to the experts and then solve it before the problem  occurs.  The company started working on it two years ago.

Honeywell Sentience IoT Platform is a common platform for connected plant, connected aircraft, connected homes, connected buildings, connected workers. He also mentioned that analytics is also an important component of this initiative.  

To further boost its journey to become a cyber industrial company, the company organised technology summit known as India Technology Summit last year. "It used to be just Honeywell, now it is Power of Connected. The reason behind that is, in all the industries that we play, we want to bring in a strong software connectivity angle," he said. Besides aerospace, home automation and process industries business, the company handles drones, robotics and AR & VR technologies from Bengaluru.  

New gameplan

Last month, the company announced portfolio changes globally, including intention to spin off the Homes portfolio and ADI global distribution business, as well as the Transportation Systems business, into two standalone, publicly-traded companies by the end of 2018.

According to analysts, the decision is part of the company's drive to go for sustained organic growth and create strong operational and technology synergies in the markets. The changes will take place by the end of next year.

CEO  Darius Adamczyk  said, "I absolutely want the premium multiple, but I also want to continue to expand EPS and grow faster than the market," said Adamczyk.

Honeywell has been in India for eight decades. The company has been Making in India for decades, and engineering in India as well. "India will play a major role in Honeywell's global ambitions. Macro trends like rapid urbanisation, rise of the mid-segment, growth in infrastructure, civil aviation, defence, and demand for energy, safety, security, and productivity across industries will continue to drive growth for Honeywell in India," said Chadda.

HAIL registered a growth of 17% in its profit at Rs 169.45 crore during the fiscal 2017 compared with Rs 142.19 crore in the same period in the last fiscal.  

"India continues to be a key country among Honeywell's High Growth Regions. The Honeywell High Growth Regions are expected to drive $1trillion of GDP growth, representing 40% of global GDP," he said.