Operational Process Excellence

Lean and agile, flexible and manageable – these are just a few of the many qualities necessary in any ideal process. Ensuring you have the best possible operational processes in place is a prerequisite for success, and will also determine the effectiveness of your digital transformation. When combined with integrated planning, process excellence has a key role to play in ensuring that your Operations division fully exploits the potential offered by digitization.

Companies can only achieve this if they continuously review and improve their process environments – something that new digital process management tools can assist in, greatly simplifying and accelerating process optimization; the resulting harmonized processes can create the basis for cross-functional integration. Optimization tools can also help teams to handle processes collaboratively, implementing tasks and workflows that increase transparency and speed in the projects at hand. With cloud computing, such tools can be provided on a software-as-a-service basis, enabling companies to make use of suitable services with minimal outlay.

Process optimization is most successful where a holistic approach is applied, and supported by powerful IT systems. Using SAP S/4HANA in this scenario both ensures that information is available within seconds and facilitates real-time decision-making, thanks to the combination of in-memory technology and a radically simplified data model. Additionally, enhancements in the areas of data management, process integration, data processing and data analysis create the ideal conditions for a consistent focus on digital, comprehensively harmonized, optimized processes.

The benefits of this arise from having transparent, agile and clearly structured processes, integrated in terms of systems and organization, across all company divisions. For complex areas such as purchasing, production and supply chain management in particular, this presents a wide range of opportunities for the implementation of process innovations, with possibilities including predictive maintenance, vendor-managed inventory and remote services, for example.

In order to optimize processes it is first necessary to be familiar with the status quo in your organization, and the related requirements. Process mining analyzes processes by means of the digital traces that arise when these processes are executed: Event logs document activities, along with related attributes such as the time stamp, start and end times, location, status and operator. Process mining tools implement algorithms to transform this mass data from log files into valuable process knowledge.

There are three methods for this. Process discovery generates a process reality model from the event logs and creates transparency. Conformance checking compares an actual completed process with the existing reference model, to identify deviations that could give rise to higher costs, defects and compliance violations. Model enhancement analyzes the process model to find potential for optimization, for instance in wait and idling times, as well as bottlenecks and activities that are not process compliant. Process mining tools take a holistic approach to accelerating process optimization, encompassing all facets from documentation and modeling, to the analysis and performance measurement for the new processes.

Robotic Process Automation (RPA) also contributes to process excellence, as it increases efficiency and releases employees from time-consuming tasks. Physical robots are already widely used in manufacturing, and software robots work in a similar way, to perform rule-based, repetitive tasks. They primarily handle straightforward routine tasks, though if equipped with artificial intelligence they can also take on complex processes, which results in new application capabilities such as the automation of materials orders, the recording of invoicing documents or the approval of production orders – there is plenty of potential to use RPA for all sorts of tasks that need to be performed at a massive scale. Robots are also hugely valuable in transferring information between disconnected systems, as they can take over transmission and clicking functions that are extremely time-consuming when performed manually. It is even possible to use robots for communication with users, managing activities, monitoring performance, predicting results and creating reports.

RPA reproduces manual processes, which means the implementation of appropriate tools is relatively simple, as the processes themselves do not require any fundamental changes. At the same time, robots are scalable and can complete rule-based processes around the clock with minimal risk of error.

When used as a complement to traditional methods, new technologies allow for considerable advances in terms of processing times, costs, quality and customer experience, with only a manageable outlay required. A further attractive feature is the short payback period: Process mining and RPA projects are quick to implement, with even simple solutions yielding improvements. As such, they constitute a first step towards operational excellence. In the long term, a foundation for optimized processes can be established by means of a highly efficient IT infrastructure based on SAP S/4HANA. In order to make full use of the potential on offer, short-term and long-term perspectives must be considered together.