Digitalization helps you with Process Development
August 23, 2016
Industrial Digitalization changes organizations and companies with accelerating speed. Digitalization is a threat and opportunity for current business operations. It challenges current business practices but creates new business opportunities at the same time.
In 2015, Midagon started cooperation with a logistics service provider to investigate the new opportunities that digitalization provides for logistics process development. The first step was to set up a process mining environment for process data advanced analysis. Compared with a traditional process development methodology, data based process mining speeds up the identification of process related problems and helps find fact-based best practices to first uncover the root causes of the problems and then to solve the problems.
When applying data and analysis based process development methods, you don’t need to know the process bottlenecks or deviations in advance. The exact problems are uncovered in a process mining discovery. The discovery first investigates process data and its quality. The discovery then draws a descriptive picture of the process and how events flow through the process. Whenever there is deviation in the process flow from the expected flow, there is a potential problem. The problem can be a process bottleneck, a never ending process loop or an abnormal event exit point. When the potential problem areas are visible, an analysis is run to investigate the root causes of the problems in the identified problem areas. When the root causes are known, it is easy to prioritize them and to initiate corrective action in the form of process development projects. The development projects can include process changes or training that shares best practices for people to do their work more effectively according to the described processes.
The logistics service provider decided to analyze its distribution processes to identify the concrete key steps and activities of ”a perfect” distribution process in the field. The baseline was a defined target process. The discovery focused on comparing the baseline and the actual process in the field. Deviations between the two were recorded and their root causes were analyzed. Based on analysis, results development actions were planned and implemented. The progress and results of the implementation were followed up in monthly process measurements and analysis against defined KPI’s. The results were normalized, such as the impact of weather conditions, to keep the results of the original analysis and the follow up analysis comparable.
A key result of the development project was a new baseline process description that better matched the requirements and actions in the field. The new baseline process was taken in active use as well. To measure process efficiency and to identify further development needs, monthly process reporting was established. A continuous fact-based decision capability was deployed successfully.
Midagon delivered the process mining service and the monthly reporting to the logistics service provider as a service (the Midagon Process and Data Excellency Service). Thanks to the service based approach, results were delivered fast and no upfront IT investments were required from the customer. In fact, the service delivered concrete and tangible financial value to the customer in just a few weeks after ramping up the service. The customer also avoided learning a new analysis methodology and the use of related tools. The Midagon consultant were available to interpret the analysis results and to advise the customer on how to plan and manage the process development projects.