Optimizing procurement with process mining apps

Process mining is currently the tool of choice when it comes to optimizing business processes with the help of data. In recent years, the leading software providers in this field have developed the technology from a pure analysis tool into a platform that can be used not only for analysis, but also for the direct implementation of optimization. More and more process mining apps, which can be downloaded from the respective marketplaces, are establishing themselves as a quick and uncomplicated introduction to the topic. Here are a few of these apps from the field of inventory and purchasing management that follow the “plug-and-play” solution.

If you need more general information on the subject, I recommend our white paper. In it, we have summarized everything you need to know about process mining technology.

Managing a complicated procurement organization requires good process transparency.
Dr. Clemens Wolf, Manager Digital Operations

The potential of process mining in procurement

Procurement is a central component of every company. The larger the company structure and product portfolio, the more complicated the company’s entire supply chain. This is also reflected in a complex procurement organization: with a broad supplier network, a variety of different materials and diverse procurement and stockpiling strategies. Managing such a procurement organization can be no easy task. And it can be difficult to maintain an overview.

By using process mining, you can not only gain the necessary transparency about your processes, but also uncover all inefficiencies, process deviations and problems in order to optimize your procurement step by step.

Quick success with standard process mining apps

At Rothbaum, we rely on the market leader Celonis when it comes to process mining. Through continuous releases and further development of standard connectors and apps, Celonis makes getting started with process mining as easy as possible. Almost 100 apps, which are offered by Celonis itself, can be found in the Celonis Marketplace in the Procurement area and are available to Celonis customers. The only prerequisite for use is that you have a suitable ERP system. The majority of Celonis apps require SAP.

In the following, I would like to tell you which subject areas the existing process mining apps can be divided into, how to proceed when using the apps and also present a few Celonis apps in more detail.

Three major areas of process mining apps

Before you can use a Celonis app, the required connector must first be installed in your system. The connector forms the link between your ERP system and the Celonis process mining platform. The connector defines which tables are required from the ERP system and how these are transformed in order to generate the process flows and analyses. There are basically three connectors in the area of procurement:

The purchase-to-pay (P2P) connector as an end-to-end (E2E) procurement process. Most Celonis apps are also available for this connector.
The Inventory Management (IM) connector, which primarily provides apps for inventory management.
And the Purchase Requisiton (PR) connector, which focuses on the purchase requisition process.

I will not go into the PR connector in detail, as purchase requisitions are also part of the P2P process and can also be analyzed with this connector in the first attempt. If initial analyses show that many process improvements are possible, especially in the area of purchase requisitions, you can still implement this connector and the apps in the second step.

The purchase-to-pay process

The P2P connector focuses on external procurement, i.e. the purchase of raw materials and merchandise from external suppliers or your intermediary companies. It maps the process from placing the purchase requisition to creating the purchase order, posting the goods receipt and finally paying the invoice.

The first Celonis app you need is the “Procurement Starter Kit”. This gives you an overview of the process, provides the most important KPIs and presents you with initial use cases that you can tackle, such as contract utilization, the on-time delivery performance of your suppliers or the automation rate of your ordering process. The app can also be used to validate the calculation of the key figures with your existing systems. If necessary, the set of rules for the calculation can be adapted directly in the app. The rules set here are then also the basis for other apps that you install. It is therefore important to configure this app correctly before you can use the others. After the corresponding validation, you can also use the app to evaluate which use case is of the greatest benefit to you and then start implementing the selected use case.

The advanced Celonis apps can be summarized in three categories:

Process monitoring
Supplier performance
Master data quality

Process monitoring

In the area of process monitoring, you should start with the “Procurement Process Cockpit”. This is a further development of the starter kit, which you can use to gain the necessary transparency about your process. Here you have all the important key figures at a glance, can analyze your process, uncover inefficiencies, understand correlations and derive improvement measures. You can then use the Process Cockpit to evaluate the success of your improvement measures and continuously monitor the process. Other process mining apps in this area focus on specific process deviations such as “maverick buying” (purchasing bypassing the process, from the wrong suppliers or without using the framework agreements) or incomplete purchasing processes.

Supplier performance

In the area of supplier performance, you should most likely start with the “On-Time Delivery App” to get an overview of the delivery performance of your suppliers or use the “Intelligent Vendor Scorecard” to optimize your supplier evaluation process.

Screenshot of the Celonis Purchase-to-Pay app “On-Time Delivery Performance” — Screenshot of the Celonis app “On-Time Delivery Performance”

Master data quality

With Celonis apps from the master data quality area, you can analyze the extent to which your master data corresponds to reality. Many users can benefit from the “Material Lead Time Quality App”, which allows you to compare your planned delivery times with reality. If there are any major deviations, you can use this information to update your master data and keep it up to date in the future. This in turn brings a sustainable improvement to your P2P process.

With this selection of apps for the P2P process, you should be well equipped to get started with process mining. And you will be able to achieve your first successes quickly without having to invest a great deal of IT effort beforehand.
Dr. Clemens Wolf, Manager Digital Operations

The inventory management process

As the name suggests, the “Inventory Management Connector” deals with a company’s inventory management. All flows of goods from purchasing, sales, production and logistics flow into this connector. Unlike the P2P connector, the focus here is less on the process and more on analyzing the material flows and how the stock relates to demand or consumption. This is visualized, among other things, by a network graph in which the individual steps within the supply chain are visible.

Screenshot of the “Inventory Management Connector” in the Inventory Management area with network graphs — “Inventory Management Connector” with network graphs

The IM connector is based on existing data models and therefore requires that you have already implemented the purchase-to-pay, order-to-cash and production planning processes. This connector is therefore not suitable as an introduction to process mining. However, it offers a good extension if you are already using the aforementioned processes.

As with the P2P process, you can get started with the “IM Starter Kit” as soon as you have installed the connector. The IM apps focus primarily on use cases such as excess stock, material availability, goods turnover, range and service level. As soon as you have validated the settings, you can also evaluate the impact of the individual use cases at first glance and tackle the most promising ones. You can tackle most of these directly from the starter kit.

Further Celonis apps

Unlike the P2P process, there are only three additional apps here. This is because the IM connector is based on three other processes, all of which come with their own apps and improvements.

You will also find the “IM Control Center”, which is used to monitor the supply chain and inventory levels, the “IM Master Data Improvement” app for master data improvement and the “IM Material Shortages” app, which focuses specifically on material shortages. The app analyzes current and future demand and determines which material numbers are at risk of running into a shortage due to the current situation. Based on this, it suggests suitable alternatives for procuring these parts, provided there are resources available in the network.

Screenshot of the process mining app “IM Control Center”, which is used to monitor the supply chain and inventory levels. — Screenshot of the “Inventory Management Control Center”

The process models from the ready-made connectors are based on the standard processes from SAP. However, it is not uncommon for processes to run differently from the standard.
Dr. Clemens Wolf, Manager Digital Operations

Get even more out of your processes by customizing the process mining apps

I hope I have been able to give you a good overview of the ready-made Celonis solutions in the area of procurement. These tools make it much easier to enter the world of process mining than it was a few years ago. Nevertheless, it should be noted that the analysis results will only be as good as the input process you give the tool. The process models from the ready-made connectors are based on the standard processes from SAP and the most common process deviations that exist in this standard process. And you can get a long way with this standard. However, it is not uncommon for your specific processes to run differently from the standard and you may also have customized processes in your SAP. And it may be precisely these process changes that you urgently need to analyze.

We are experts when it comes to extending existing standard installations and adapting them to real-life conditions. With our many years of experience in the field of operations and our process mining know-how, we understand both the process requirements from the business side and the necessary IT prerequisites for finding these requirements in the data sources and integrating them into existing data models. We are also happy to support you with the initial evaluation, the development of further use cases and the implementation of sustainable automation and reporting solutions and show you how to get the best out of your process mining applications. Find out more about our process mining consulting services here.

Teaser for the Celonis app “Production Flow Control Cockpit”

More Celonis app

Interested in process mining apps?

Then we recommend that you also take a look at the Rothbaum Production Flow Control Cockpit. This makes it possible to optimize production planning by analyzing production bottlenecks, for example.

Learn more

Dr. Clemens Wolf

Manager Digital Operations, Frankfurt

He is responsible for the Digital Operations business area at Rothbaum. His goal is to drive digitalization forward with our customers from the manufacturing industry and to support operations with modern technologies and system solutions.