How a Bike Manufacturer is Using Process Mining
Process mining is frequently heralded as a significant solution for big business, but how does it work for smaller enterprises?
The scenario: A mountain bike manufacturer successfully sells large quantities of customized mountain bikes to retailers. Once a customer order is received, the manufacturing department typically requests the purchase of seat tubes, fork crowns, handle bars and other materials needed to build the bikes.
Since customers often order on short notice, the department needs to maintain high standards in production planning, so materials are available, production is not delayed, and customers remain happy. Yet there are rumblings that purchase requests are not fulfilled in time. So where might things be going wrong?
Using Process Mining to Steer Around Assumptions
Company management was operating only on supposition and “gut feelings.” It was probable that other departments gave approvals far too late. It was possible there was a need for a lot of manual intervention, which slowed things down. It was likely to be a supplier issue. Without facts and figures, however, each of these ideas was just that: conceptual and unactionable.
Enter process mining. The business was soon able to visualize all purchases from end to end. Not only did they have a systematic overview, they were able to drill down into relevant cases and find out where things weren’t working as well as the root causes of process issues.
- The good: Most of their suppliers delivered on time.
- The not-so-good: In many cases the purchase orders were, indeed, sent too late. On average it took 7 days and the purchasing department needed them much sooner.
- The root cause: Late approvals by the manufacturing departments.
- The fix: They showed the data to the departments and the approval process was given a higher priority. They now monitor approval times as well as supplier performance to ensure goods will be ordered and delivered on time.
• The not-so-good: Time was being lost somewhere within the purchasing department.
• The cause: Many rework activities were delaying the process, including incorrect master data entries and manual price changes. In addition, during one quarter many suppliers had changed, and others had not sent their current price lists.
• The fix: They updated their master data records and price lists and reduced the average processing time by 15%.
• The not-so-good: The company examined critical delays and was surprised to discover the automation rate was very poor for six of their major suppliers.
• The cause: Analysis revealed that in 12,300 cases the goods receipt could not be scanned and processed automatically and had to be entered manually.
• The fix: After discussions with suppliers, the company agreed to install a new barcoding system that allows electronic processing.
Process mining was the key to help this company uncover the truth about their processes and eliminate the guesswork. By seeing exactly how things were working they were able to focus their energy on improvements in areas that would have the most impact. In this way they were not only able to get things back in gear, but position themselves to pedal well past the competition.
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