Production optimization: reduce production costs
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Process optimization in SAP EWM using process mining
Why process mining has become indispensable for process optimization in SAP EWM
In the current business landscape, efficient and optimized business processes can give you a major competitive advantage over your competitors. Well-structured processes reduce your costs, your time expenditure and your susceptibility to errors. It also enables you to react quickly and effectively to market changes and customer requirements.
Your logistics are the backbone of your company.
Johannes Mayr, Senior Consultant
Your logistics processes form the backbone of your company. Whether in the storage process of goods ordered by the purchasing department, the production supply or finally in the delivery process to the customer – no company can be successful without functioning logistics processes. However, the processes are often very complex and confusing. Analyses and evaluations are also often difficult to carry out, as there is often a lack of transparency in the processes. However, you can remedy this situation using state-of-the-art technologies such as process mining.
What exactly is process mining?
Nowadays, practically all company processes are supported by systems. For example, in accounting, purchasing or order processing with an ERP system, in production with an MES system or in logistics with a warehouse management system. These systems store all changes made to a specific order, such as a delivery document. It is precisely this information, these digital traces that a process leaves behind in the system, that process mining makes use of. Process mining uses this change data to generate a digital twin of the process with the help of additional process knowledge. With the help of this digital twin, all historical process runs can be visualized and analysed. This allows problems to be understood and the process to be optimized. If you want to find out more about the technology itself, I recommend our white paper on the subject.
This means that ready-made analysis models can be used without extensive development times. Depending on the use case, certain KPIs are calculated automatically and the results are presented in analyses. This makes it possible to gain valuable initial results and insights with minimal implementation effort. In addition, the app is presented in a user-friendly interface, allowing even less tech-savvy employees to benefit from the extensive analyses and evaluations. In addition, repetitive tasks are automated via predefined “actions” to save manual time.
Where is process mining used in logistics?
For a long time, the technology was mainly used for indirect processes, for example in purchasing and order processing. The processes in production and logistics were too complex and multi-layered. However, the technology has now developed significantly. It now enables us to use it in these areas too, provided that the necessary process knowledge is available to the process mining experts. In the field of logistics, for example, there are the following use cases:
- Inbound logistics:
Process mining is used to optimize the inbound process of incoming materials and products from suppliers to production or resale. Bottlenecks as well as excess stock are identified in your inventory, your efficiency is increased and delivery times are optimized. The efficient allocation of the right storage space for a product can also be supported. Real-time analysis minimizes delivery delays so that you can ensure a smooth process flow in your company.
- Production supply: A crucial process, especially in larger production facilities, that can be examined with process mining is the production supply process with customer requirement parts or the provision of materials in production. In addition to the actual delivery document, the progress of the production order is also mapped in order to identify the best possible synergies. Is the outbound delivery triggered too early? What are the reasons for the late provision? Did the delivery process take too long or was the trigger time too late? Process mining allows you to bring transparency to the often complex dependencies between production and logistics, ideally optimizing the production process directly.
- Outbound logistics:
You can also use process mining to optimize the shipping process for customer deliveries. Particularly when looking at the throughput times of delivery documents, there are a number of starting points for reducing these in your company. For example, you can track picking routes and make adjustments to your warehouse layout to improve your picking times. You can analyze how much time is lost during a picking process for deliveries from different warehouse types. You can also track exactly how many retrievals you have per wave. You can also generate added value in packaging, whether on the basis of time or material utilization. You can analyze the time window for packaging and shipping and identify the causes of delays. Real-time analysis also allows you to intervene directly in the process: you can see the criticality of every order currently in the system at a glance and take action before, for example, priority deliveries leave the warehouse too late.
The challenges of process mining in the warehouse
Compared to the analysis of indirect processes, the application of technology in the area of logistics is more difficult. The major challenge in creating a digital image of the process (regardless of whether inbound, production supply or outbound) is the multi-level nature and the associated complexity. If we look at the outbound process, for example, it is immediately apparent that it consists not just of a single process, but of a large number of sub-processes. The starting point here is the process based on the delivery order. This begins with the creation of the delivery order item. In the process flow, it includes, among other things, the creation and confirmation of the pick warehouse task and ends at the end of the process with the outbound delivery. However, this process only describes a fraction of the complexity required for the outbound delivery. It is therefore not enough to map only this process to create transparency.
This is because this main process triggers sub-processes in the warehouse, such as removals from the source HUs, movements of the target HU and, if necessary, final consolidation processes. And it is precisely these physical processes that require transparency. They are also difficult to analyze using conventional methods. The actual stock removals are order-independent in SAP EWM and therefore cannot be assigned directly to an order. This is also desirable, as a source HU can also be picked for two orders. If your logistics center consists of several warehouse types, e.g. an automated small parts warehouse (AKL) and the large load carrier (GLT), there is the additional challenge in the analysis that there are therefore two source HU and two target HU sub-processes. If you also have mixed orders from AKL and GLT, an additional target HU process is created for consolidating the order.
These sub-processes must therefore be modeled individually and then linked – something that has only been possible since the introduction of multi-event logs in Celonis, one of the leading platforms for the use of this technology. The same provider is currently taking a further step with its data model, which enables object-centric process mining (OCPM), to make this interaction of individual processes even easier to analyze.
Operational application of EWM data
Once the challenges of modeling your logistics processes have been overcome, the data model created offers many practical benefits. In addition to creating transparency, analyzing EWM data with process mining also achieves profound operational application benefits.
Artificial intelligence
State-of-the-art AI algorithms can be used to forecast the expected completion of orders. This allows you to react both at short notice and in real time and revise the sequence of your orders in order to prioritize critical orders and ensure that they are completed on time. The current utilization of your warehouse and all delivery-relevant information is always taken into account.
Multi-order picking
Another common problem that is improved by the multi-level data model with source and target HU is multi-order picking. This refers to the simultaneous picking of several items from a source HU for different orders, instead of processing each order individually one after the other. This increases your efficiency as orders are processed more quickly and routes are reduced.
Stock allocation
Process mining can also generate added value for you when it comes to the operational analysis of your warehouse occupancy. The evaluation based on warehouse tasks gives you a quick and easy overview of your warehouse occupancy and allows you to react directly to any problems. Even after adjustments have been implemented, you still have an overview and can check at any time whether the change has created the desired added value.
By analyzing the routes and consumption of various warehouse parts, Process Mining suggests the best available storage location when new deliveries are put into storage. This avoids unnecessary extra work in the warehouse.
As you can see, the possibilities offered by process mining in this area are diverse and powerful. The solutions should always be adapted to the challenges of the respective company. If you have any questions about the possibilities, please contact us, we will be happy to understand your challenges and give you an assessment of whether the technology can provide added value.
The advantages of the SAP EWM standard
Which warehouse management system (WM) do you use? Many companies use their own WM software. However, using SAP EWM instead of individually developed software creates considerable advantages for process mining. Because EWM is used in many companies and always uses the same standard tables for the historization of changes, providers of process mining software can concentrate on developing Celonis standard applications. These standard applications consisting of transformation pipelines and user interfaces can then be used to significantly reduce the implementation time and effort of your personal solution.
The Rothbaum SAP EWM Warehouse Cockpit
The “Rothbaum SAP EWM Warehouse Cockpit” developed by us (also available in the Celonis Marketplace ) consists of a total of eight sub-areas in addition to the classic display in the Process Explorer at the various process levels and is ideally suited for both management level and operational use.
On the one hand, this consists of a three-part management overview, which can provide you with an immediate overview of the topics of workload, throughput times (DLZ) and priority orders, so that you can always see the current situation in your warehouse in a high-level view and thus gain a brief and concise insight. Linked to the respective detailed information, you can also go directly into the details if required in order to get to the bottom of anomalies and inconsistencies.
On the other hand, the operational user can track the individual orders in real time via the view of open delivery orders. In addition to the real-time analysis, AI algorithms such as the Random Forest provide you with predicted end times for the respective orders. This allows you to react quickly if necessary and adjust the prioritization of orders and prioritize those with higher importance. We also support you here with our stored action flows, which can significantly reduce your workload when implementing the prioritization. Whether it’s to import the adjusted data back into your EWM directly via Celonis or to notify your colleagues of this via automated email.
Is something missing? No problem, as the underlying data model is a digital twin of your logistics, it is possible to adapt or further develop the analyses or operational application options quickly and easily. Feel free to contact us!
Have we piqued your interest? Every warehouse is unique – we look forward to getting to know yours!
Johannes Mayr, Senior Consultant
Talk to us!
If you need help with your business processes, please do not hesitate to contact us. Our experts in the field of digital operations will be happy to help and advise you.
Johannes Mayr
Senior Consultant, Munich
As a senior consultant, he particularly supports projects in the area of digital operations. His focus is on analytics and process optimization using process mining.
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