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Making the Most of Supply Chain Tech: Manufacturers Leverage Process Mining

The supply chain technology market has become a field crowded with choices. For many electronics manufacturers supply chain visibility inherent in a complex supply chain tops the list of desires, along with data analysis, Internet of Things, cloud computing, and information security.  Good visibility helps increase efficiency, reduce risk, and, as a result, enhance customer satisfaction.

 

Organizations need visibility both within the organization and out to suppliers and customers, but most haven’t achieved a real ability to see what’s going on in the supply chain. According to the Geodis 2017 Supply Chain Worldwide Survey, only 6% of supply chain leaders say that they have absolute visibility into their operations. And – more than three quarters (77%) report that they have either no visibility or a restricted view.  And yet it ranks as the third most important strategic supply chain technology priority. 

The market for analysis tools is evident when you consider spending on this type of technology.  According to the latest Worldwide Semiannual Big Data and Analytics Spending Guide from International Data Corporation (IDC), worldwide revenues for big data and business analytics (BDA) will grow from $130.1 billion in 2016 to more than $203 billion in 2020.

“The availability of data, a new generation of technology, and a cultural shift toward data-driven decision making continue to drive demand for big data and analytics technology and services,” said Dan Vesset, group vice president, Analytics and Information Management. “This market is forecast to grow 11.3% in 2016 after revenues reached $122 billion worldwide in 2015 and is expected to continue at a compound annual growth rate (CAGR) of 11.7% through 2020.”

One company, Celonis, has developed a new approach to big data analytics that uses artificial intelligence (AI) and big data to gain visibility into where inefficiencies in the supply chain lie in order to accelerate and automate those processes. Celonis’ Process Mining technology looks at the digital footprint left by the IT systems of the organization to examine business processes, such as purchase-to-pay, orders-to-cash, production, logistics, IT service management, accounts payable and accounts receivable, in real life.

On average, by doing this organizations can expect to reduce operational costs by 10 t 30% or more based on making changes to the discovered inefficiencies, Alex Rinke, co-CEO of Celonis told EBN in an interview. “Large companies especially think a lot about enterprise acceleration,” he added. “By creating a strong supply chain and successful business processes, they can capture real competitive advantage. Especially in the electronics market, companies need to be agile and figure out how to accelerate internal business processes.” 

For example, Siemens AG used data mining technology  across its 70 different ERP systems globally.  Siemens processes more than 50 million orders per year generating billions of data points.  The company had more than 3,000 users actively using process mining. By leveraging process mining, the company increased on-time deliveries by 14% and achieved 21% higher alignment with customer requests, Rinke said. The company saved $10 million dollars last year with the added visibility. 

“Process mining opens up new possibilities: the algorithm enables us to make complex processes transparent – something that simply couldn’t be done before. Every inefficiency becomes visible – like in an x-ray image – so you have a clear indication of where efficiency can be enhanced. This makes it easier for business managers to meet their KPIs,” said  Dr. Lars Reinkemeyer, head of global process mining services at Siemens IT.  

The key to the technology is that it takes data from the IT event logs created by a variety of procurement and enterprise resource management systems, including those from SAP, Ariba, and Oracle, as well as many warehouse management systems (WMS).  The company has created connectors that cover 80% of the ERP systems and 70% of WMS systems, Rinke added. “Every time someone puts something in the system, it creates digital footprints,” he said. “We scan those logs and processes, creating and reconstructing business processes. The system takes raw data from systems and reconstructs the process that happens in order to make it useful for users.” 

In order to determine if process mining can deliver value, manufacturers should consider several things: 

  • Are my key performance indicators (KPIs) sufficient to remain competitive?
  • Are my KPIs measuring the necessary metrics to ensure achievement of business commitments to customers or are KPIs driven by what is easily measurable?
  • Is data quickly and easily retrievable to measure and monitor KPIs?
  • Will your processes be sufficient to support product roadmaps and will they be agile enough to respond to changing market conditions?

What sort of data analytics do you use to enhance your supply chain? Let us know in the comments section below. 

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