Process mining drives procurement-to-payment efficiency
At a glance
A leading global manufacturer engaged Aligned Automation to evaluate and overcome their most critical procurement challenges by leveraging enterprise data and information. A baseline assessment found that purchase orders went through processes with ~50% manual touches and multiple invoice changes.
To improve the overall process efficiency, eliminate rework and identify workflow automation opportunities, the team connected, enriched and analyzed data throughout the procurement-to-payment (P2P) processes including purchasing, ordering, invoicing and payment. Process discovery, analytics, reengineering and intelligent workflows aided the team to achieve a more intuitive and frictionless process.
efficiency gain in purchase order processing.
reduction in rework.
The need for change
The P2P value chain analysis highlighted critical challenges associated with the process and multiple touchpoints between departments and systems, causing daily processing of high volumes of purchase orders.
The team outlined three objectives for improved efficiencies:
- Identify process bottlenecks
- Automate execution workflows
- Reduce work index
High manual touches.
PO execution delays.
Determine the ideal process and friction points
Process Discovery helped discover ways to visualize and contrast the as-is process with the ideal process.
Deep root cause analysis of the process helped the team identify unexpected process deviations and frictions, such as: (1) Profiling delays for order modifications with quantity; (2) Date changes from requisitioner and price changes from suppliers; and (3) Delayed order profiling based on hold time between requisition release and purchase order.
Process transformation delivers value-capture opportunities
Process discovery and analytics helped identify opportunities for the P2P process with constant monitoring and analyzing of bottlenecks and deviations. Process re-engineering assisted to reduce redundant activities. And workflows aided in establishing change order prioritization and processing.
Intelligent workflows orchestrated Business Process Management, such as vendor order acknowledgement in Ariba, delivery delay alerts and price change approval workflows. A near real-time KPI tracking mechanism — facilitated to align with the organization’s procurement strategy — helped improve decision making and address the value chain challenges.
Aligned Automation also enabled a proactive measurement system allowing transparent result tracking. After initial implementation, positive results yielded:
- $1.7M in annual cost savings
- 30% reduction in rework
- 10% reduction on profiling delays for cancellations
- 40% improvement in invoice processing time
With these outcomes, the team realized improved process efficiency, reduced manual touches, reduced errors and improved stakeholder experience.