Courtesy of myInvenio's Joel Garnatz, below is a transcript of his speaking session on 'Worried about Operational Excellence? Never Again, with World-Class Process Mining' to Build a Thriving Enterprise that took place at BTOES From Home.
Worried about Operational Excellence? Never Again, with World-Class Process Mining
A European automotive manufacturer of compact and luxury cars with 110 billion in sales in 2017 and 230,00 employees was looking to expand globally. In 2019, the company set out to analyze and improve its core processes to increase business efficiency and drive operational excellence as it prepared for expansion. myInvenio collaborated with the car manufacturer to discover, analyze, and constantly monitor its P2P process for a final result of 672,000€ in total savings.
- Seeing a digital twin of your organization is the starting point to identifying what to transform.
- View your processes end to end to solve problems at scale.
- Review how your processes match up to your conformance expectations.
- Simulate your solution assumptions to accurately understand your expected outcomes on end to end processes and not just tasks.
- Monitoring your expectations.
Thank you for joining us today the session that you joined is called How to create a digital twin of an organization in order to achieve operational excellence this session is being hosted by myInvenio.
My name is Joel and I'll be walking you through today's presentation. A little bit of an overview of what we're planning on covering during this presentation first just a quick high level uh overview of who myInvenio is what it is that we do we'll go through how the myInvenio vineyard solution creating a digital twin can help you achieve operational excellence and then we'll finish up with a an example of a customer case study.
Where they did achieve this but we're going to show you not just from a presentation standpoint we're going to show you from actually in the software how they achieve this and the actual results from the digital twin so a little bit about my video we're a process mining task mining company that's been around for quite a while since 2013 we have operations globally.
I happen to be in the U.S. out of Minneapolis but we have offices throughout Europe and Asia as well too we're a growing company from an analyst standpoint I think it's very interesting that we're covered by all the major analysts as expected you know so Gardner covers us forester nelson hall Everest group and Gardner even called us a cool vendor which we take a lot of pride in from a vertical standpoint we work in all Verde verticals but the majority of our early customers have been coming out of the financial services and manufacturing areas these areas have a tendency to focus a little bit more on digital transformation and and how they can achieve that but we'll talk about how.
We approach it for in our use case even for a automotive company as well too so let's talk about the problem that we're solving here with a digital twin i like this analogy but that you really can't analyze monitor or even optimize what you don't know what you're looking at and a lot of times we're we're forced in a situation we're trying to understand our processes and we have a lot of pride in those processes but we really don't know what they look like and they may not be as strong as we think they are and the analogy here is we we think our processes are strong like a line but they may be a little weaker than what we expected them to be so from a myInvenio venue standpoint.
What we do is we really focus in on on three particular areas for youtube to move towards operational excellence or or or move along in your digital transformation journey you know the first area that we focus on is is the discovery you know how do i find out how i'm doing processes today because we really believe in the concept that there's no such thing as a static process they're they're constantly changing so you have to constantly measure you know what they look like and we see manually trying to achieve this can take a significant amount of time in some cases up to six months just to try to document a particular process and if it's not static.
It changes by the time we're done with the documentation and then once we do achieve you know understanding what our processes are how we're how we're going to monitor them what tools are we going to use to monitor how process is changing how flows are changing and then as we optimize how do we simulate that we want to we don't want to simply deploy a solution without understanding what the results are you know that's time consuming has not affected so how do we simulate what our expectations of change are and with myInvenio venue.
We really address all three of those areas the first as the focus of the presentation today is really around you know what is this digital twin and we create a digital twin of your organization let me explain what that is it's really a version of your organization as is how processes uh in your organization are being achieved today how they're being delivered accurately and we're using the the the information from your own systems in order to determine that.
so we're leveraging things like uh process discovery and and task mining we're also looking at it Som a multi-level standpoint so if we need to look at a process from end to end we want to look at it from end to end if we want to look at it across different applications we want to look at it across different applications so mayan venuo has developed a methodology using algorithms in order to determine exactly what this this digital twin is and determine what your organization looks like today so we could be looking at 12 months of data.
we'd be looking at two years worth of data we can get to this view of what your organization is and that once they were there then we provide the tools that allow us to monitor we may be looking at things like a cost from a cost perspective or we may want to measure from a kpi where we're out of it where we're trying to achieve from a time uh perspective we look at compliance monitoring so you know since i'm looking at an as is model.
I may also have what i think my model should be and i can compare the two together i can see when i'm out of compliance and we're going to talk about a little bit later in a procure to pay model when i do things like maverick buying when i'm i'm stepping outside of that particular process and not following the steps we can monitor that with with the myInvenio video too and then we'll also look at four automation opportunities and we will be able to drill down into the root cause analysis simply because we've created this digital twin and put the analytics tools on top of it and then the last piece from a solution standpoint we want to provide you the ability to look at what-if scenarios we we like the idea if if if we're trying to achieve operational excellence is is to simulate what we think the expected outcome is if we're going to fail let's fail within the digital twin model and not in the real world let's let's understand what our real roi is and what our expectations let's also understand the impact.
That we make a change in one area how it impacts other areas within our organization as well too so again the digital twin is is a matter of my nvidia's ability to pull together information from disparative systems we can pull information together from whether it be your erp or or your crm or we're going to pull together cost and roles within your organization we can pull in together as well manual activities that you're achieving as well too but since we pull these all together we can provide this very precise digital twin of your organization so that you can understand where your bottlenecks are as well as simulate what your solutions might be.
So let's look at a story of continuous process improvement and how this might work as we move towards operational excellence so again we're going to look at where the data source is it could be coming from let's say sap oracle any of your erp type solutions you may also want to look at you know how your robotic population is is performing as well too so whether it be automation anywhere uipath we can pull that data in as well too we're going to be looking at bpm maybe your crm on salesforce and there will be an example here that we can show that or you're pulling in you know flat files or database files or you know bpma.
Where we can pull in information on on manual processes as well too but by combining those together we create an as is view of what this looks like and so it does not have to be just a single application in the scenario that you're looking at here right here it's combination of salesforce sap and automation anywhere from there we can create the 2b this is the simulation of the model if i want to automate a particular area if i want to change resources in a particular area if i want to change the sla in a particular how does that impact my model.
I can apply whatever types of automation that i have and then we go back and we recapture data and we look at the the monitoring of that solution and what problem did we actually solve so mayan venue has some very distinct features when trying to achieve a digital twin in your organization we really are the only ones that can create this digital twin of your end-to-end processes you know and and processes are very complex for example like ordered cash or procure to pay and we're actually going to see an example here shortly of procure to pay we allow you to create what-if scenarios using simulation and this allows you to drive towards if that is your path digital transformation or hyper automation and scale because you reduce your your cost associated with discovery and simulation going forward so let's go into a success story.
I'm going to have my colleague Sophie actually present the next section of this but i want to set up the business story of what we're going to see here so we're going to look at an automotive company they have a little over 100 million dollars in sales about 240 000 almost 250 000 employees but what they were looking at is they they wanted to get a view of their as-is analysis of their organization or as we would call a digital twin they wanted to know their frequencies the variance of that particular process within their organization they wanted to know lead times and wait times as well too they were interested in compliance monitoring as well too.
So this could be divided into what we call maverick buying within a pure-to-pay process or it could be just violations when people are not following the right process and as a large organization they don't always are aren't always capable of seeing this so what myInvenio venue did is is we really set up and looking at the in the end procure to pay we focused on these five areas maverick buying could we reduce deviations how cooper reduce reworks avoiding cash discount losses and as well as increasing automation within their organization within a two month period.
We were able to identify potential savings in their organization ended up being right in the ballpark of 672 000 euros that were potential and this is because we could simulate and understand what the 2b model would look like we made changes to the organization we also at the same time continued to monitor so we could understand what the real roi that we got out of it was in that case it was about 600 000 euros at the end but this was an investment in their organization to be able to see a digital twin so that they could forecast and view what the return would be by making modifications for their operational excellence now i'm going to turn this over and we'll actually show you the product with sophie demonstrating thank you today.
We'll see how my envino brings indispensable value to a procure-to-pay process from an automotive manufacturer here's a quick look at the company they had over 100 billion euros in sales in 2017 and over 230 000 employees and in 2019 they decided to analyze their pdb process using myInvenio thanks to our experience in the process money landscape and in specific the analysis of p2b processes we created a standard collection of dashboards with well-defined sets of insights that myInvenio is able to extract from the data analysis these dashboards focus on five areas that have the biggest impact throughout a p2p process those areas are maverick buying deviations automation reworks and cash discount losses using a low cost and fail fast approach we determined that by concentrating on these areas of the p2p process.
We can get the quickest and most impressive results improving time and lowering costs i'll be taking you through each of these areas before we started on this project we talked to the company about their goals they told us they wanted to analyze their as-is process monitor compliance analyze performance and have a clear picture of their spend under management we confirmed that their goals did in fact match our proposed standardized dashboards and insights so we knew immediately what we were going to focus on in this project.
I'll be taking you through each of these five insights but before we start with the process analysis we wanted to get a forecast of the expected potential savings we could get with mindvinio we have the p2p expected savings calculator for this we utilize the insights i mentioned earlier maverick buying deviations reworks and potential for automation to identify the potential inefficiencies related to a series of average benchmarks that we've already obtained for procure to pay in the case of this company the lost cash insights isn't applicable.
So we simply don't add in expected savings for this insight we ask the client to give us just a few pieces of information that they already easily have access to without having to go through their data you can see this information in the assumptions so average salary for the person that handles p2p how often they believe they were making purchases outside of their policy the total cost of those purchases and the number of invoices you simply enter in this information into the calculator to get your expected savings and after you go through the whole process analysis with mine video you'll be able to verify if the real potential savings in fact match.
What you expected to get from the savings calculator here's a quick overview of the project starting from the company's business goals their data are coming from sap we can see the departments involved which reference model we want and the period of analysis with the number of invoices that we'll be analyzing okay now it's time to see myInvenio video in action first let's see how mindvinio is able to display the ptp process starting from the data extracted from the company's it systems in this case the data are coming from sap we have standard scripts that are able to extract and transform the data automatically so that it can be analyzed with my envinio thanks to its powerful algorithms mimevinio elaborated the data set and automatically mapped the streamlined p2p process as you can see a lean approach is used to represent the process.
The rectangles represent the activities the arrows point out the paths between the activities and the colors and thickness of the arrows indicate their frequencies in this project we're going to deep dive into the process using one of our key differentiators multi-level process mining as i explained earlier mindvinyl's multi-level process mining allows you to map several derived processes into a single comprehensive model and analyze them in one picture traditional process mining will take your four entities related to purchasing ordering invoicing and payment and analyze each one separately as its own process with a multi-level process mining.
We can provide that holistic view analyzing all four entities in one end-to-end process so that you can easily find correlations you don't have to switch from analysis to analysis and when you simulate a change in one entity you'll immediately be able to see how it affects all the others mind video is able to automatically discover the different path variants of your process and by variant we mean the groups of cases that follow the same path here the most frequent pathway or variant occurred 32.8 percent of the time during the period of analysis and had an average lead time of 112 days and 21 hours and each variant can be ordered by frequency or average lead time and drilled down for analysis so now let's see where we have any bottlenecks with a lean approach mimevinio displays the most critical waiting cues within the process indicated by the thickest arrows that you can see here between the activities order approved and service entry sheet registered.
It takes on average about 71 days or 156 days if the activity order changed has occurred mime video's biggest value is its capability to discover specific insights and provide the expected savings when improving your process now we'll see how mime video does this with maverick buying maverick buying refers to any company or employee purchase that doesn't meet a company's purchasing policy.
This includes off-contract methods of procurement and also non-authorized purchases maverick buying makes the agreement with the supplier more expensive because the volume of the framework agreement decreased or because the goods are purchased at too high a price following this broad definition of a maverick myInvenio has developed two standard insights to help business analysts identify this kind of buying uh order without a purchase requisition and invoice without an order so first we'll find out which orders don't have a purchase requisition in the order maverick dashboard my video displays the total number of orders without a purchase requisition,
You can very easily check the most involved suppliers or purchasing groups and also the resources that routinely work in this way myInvenio also calculates the expected savings that the company can achieve by managing these orders according to their purchasing policy now let's find out which invoices don't have a purchase order.
We'll have a look at the second maverick dashboard invoices without a purchase order okay so with the same approach as the previous dashboard my video displays the total number of invoices that don't have a purchase order allowing us to drill down through the vendor purchasing groups and resources and just like before you can see the expected savings in the deviations monitoring insight we can monitor the cost of activities that are carried out when the process is not following the happy path or the expected behavior here.
We can also discover the root causes and the impacts of those deviations with the conformance checking feature mind video highlights non-conforming activities in the process model in this process 12 500 cases or process instances were non-conformant with on average a lead time 19 days and 9 hours longer than the lead time for conformant cases and an average cost 16 euros higher per case than the cost for conforming cases here you can also see a summary with statistics for conformant and non-conformant activities and check the performance and cost of each deviation you can even discover which are the main influencers of the deviation by viewing the root cause analysis and for an overview of the cost of the deviations my video also provides you with the deviations cost monitoring dashboard in this dashboard.
You can find a list of activities that were identified by my video as deviations with the total cost for each activity and from this list you can quickly understand the impact of each deviation in terms of cost the total cost of the deviations and the expected savings after minimizing these deviations in the reworks monitoring insight myInvenio monitors.
The cost of the activities that are executed more than once within the same case so activities with at least one rework so let's discover the reworks a reworks view is provided in the process model and again using a lean approach mind video displays the most reworked activities on average the two change activities item price and delivery date have the highest rate of rework now let's have a look at two more of my video's key differentiators its capability to identify candidate activities for automation and its capability to simulate what-if scenarios of our process.
Thanks to my videos automation dashboard we can see a list with the cost of activities carried out by both humans and robots and that lets us quickly and easily identify where we're spending the most on human-based activities and where we can get the greatest benefits by adding robots here we can see the two most expensive activities that haven't yet been automated are order approved and invoice registered we decide that these would be good activities to simulate with robots digital twin of an organization solution lets us generate a very precise process model thanks to the discovered bpmn and decision rules minor and that is what enables us to simulate future what-if scenarios of the process so starting from the existing business data the decision rules minor extracts the business rules on each decision point of the process and adds them to the bpmn model.
Which was already discovered before okay so now we'll open up a new simulation scenario and confirm it starting from this digital twin of the process we can easily configure the scenario we want to simulate we can configure our scenario by changing the number of human resources assigned to a specific activity changing the expected processing time adding bots and even adding or removing activities once we configure the scenario.
We want to simulate the bpmn automatically updates to reflect the changes we've made my video works like a time machine it generates future instances of the process by creating a simulated event log and this simulated event log can be compared with the data derived model mindvino also looks for the expected return on investment so let's have a look at our expected roi with process diff we can compare our simulation with our current process model to discover the potential benefits we can get from implementing these changes.
We can compare the average lead time total cost and we can drill down on each activity to compare the expected reduction in lead time after we execute a simulation we can continuously monitor the automation trend the automation dashboard provides you with the distribution of human and robotic workload over time allowing you to understand if the automation implementation is going according to plan and in the avoid cash discount losses insight.
We're able to monitor the activity spend under management to see if there are potential discount losses due to late payments the spend under management dashboard lets you monitor payments by simultaneously giving you an overview of the total amount that is paid on time are late and the distribution of the payments among the vendors so potential discount losses can be easily identified all right let's look at the final results my video was able to tackle 500000 euros worth of maverick buying saved 55 000 euros from reducing deviations saved 2000 euros by reducing reworks and drastically increased the automation level of the process.
My video improved the company's p2p business process guided them through their digital transformation and helped them save a total of 672 000 euros here is the breakdown by insight of the savings that mine video achieved in the procure to pay process use case shown in this demo thanks to its unique approach myInvenio maximizes the value in procure to pay processes and enables you to save millions all right thanks for watching our demo i hope that you enjoyed it and that it was helpful for you thank you bye you
Joel is an accomplished leader who has worked on both sides of the operational excellence landscape as a provider of solutions and as a departmental owner trying to solve problems. Recently his focus has been on how companies can reduce the time to discover automation opportunities within their companies at scale and accuracy. Prior to this focus, Joel has spent time working with companies on RPA initiatives and implementing technology into large customer service organizations while managing them. Joel feels like he is at his best when leading by example and using systems and processes to ensure scalable and repeatable excellence.
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