Process Mining and Automation in Logistics

The line between disorder and order lies in logistics…

–Sun Tzu

Have you ever taken a Myer-Briggs personality test? If you have 12 minutes to spare, a quick version is available here.

It essentially breaks your personality down into four categories:

• Introversion/Extroversion

• Sensing/Intuition

• Thinking/Feeling

• Judging/Perception

As a result, different combinations of each trait result in 16 distinct personalities; ESTJ, INFP, ENFJ and so on.

Somewhat surprisingly, ISTJ, the Logistician personality type, is the most common, making up around 13% of the population.

Perhaps unsurprisingly, logisticians dislike making assumptions and prefer to rely on facts to inform their decisions and actions. This is great news for organizations as they become increasingly reliant on facts and data. You want those ISTJ’s working for you!

Better yet, have those ISTJ’s working in your logistics department.

A typically manual field, logistics is catching up to departments like finance and gradually improving its digital fitness and use of data. A McKinsey study estimates that the transportation and warehousing industry has the third highest automation potential out of any sector.

It’s a necessary transformation, as logistics processes are the backbone of many organizations. The pressure on logistics is only set to grow, as customers continue to demand a wide variety of products, quickly and at competitive prices.

Inefficient logistics processes lead to unhappy customers

As a Future of Fulfillment Vision Study found, 55% of supply chain respondents were still using pen-and-paper manual processes to handle their logistics.

Certainly processes like order picking or booking transport, if done manually, are particularly prone to human error. Think of creating a delivery for the wrong number of items, or a logistics officer mistakenly booking a month-long sea-shipment instead of urgent airfreight.

These mistakes can be costly and time consuming, not to mention the customers you’ll annoy and perhaps most importantly, the impact on the environment.

According to Professor Alan McKinnon, 22% of trucks in Europe are empty and, on average, the rest are only 50% are filled. It’s mind boggling to imagine the huge impact improving this statistic would have on the environment. But that deserves its own article…

For now, we’ll focus on how you can reduce errors and increase efficiency in your logistics processes. The answer lies in complete process understanding and automating the right manual tasks.

Know your logistics processes inside out

Many companies don’t know the as-is state of their logistics processes. When asked how their process runs, they usually refer to their ISO book or other documentation. The problem with this is that it shows the ideal state of the process, not its actual state.

This is where process mining can be used to gain a real-time, fact-based overview of your process, allowing you to identify current bottlenecks and any hidden weaknesses.

It’s quite difficult to change behavior when you have nothing concrete to support your argument. If you can prove that, for instance, considerable costs go into covering transport for a certain low-value customer, or that one particular freight forwarding partner has a much longer delivery time than another, it’s easier to convince people that change is necessary. Process mining provides irrefutable facts to push that change.

Optimize it

Once you know the real process, you can take steps to optimize it – it’s easy to do with process mining technology (such as UiPath Process Mining).

Often, visualization is key to process analysis, allowing you to easily see where things go wrong. With process mining, you’ll be able to identify inefficiencies that slow your business down, using up valuable time and resources. You can streamline shipments, warehousing, packaging processes, just to name a few.

In practice, this could mean developing a business case for transferring production to another location based on demand, reducing instances of transatlantic container shipments. Or even standardizing freight costs or shipping terms used for customers, rather than having customized agreements. There are truly so many opportunities to optimize your processes, it’s just a matter of identifying them using process mining.

Haste makes waste

Once your process has been discovered, you can begin automating.

Many companies jump straight into automation, without fully understanding their processes. The problem with this, is you end up automating a less than ideal process.

Automating an inefficient process is like painting over rust. It might look good in the short-term and top management may be pleased with the initial results, but the rust will eventually crack through the paint. To gain the most benefits from automation, you need to remove any rusty processes before you automate.

Once the process has been optimized, a software robot can be configured to start automating error prone, time-consuming and repetitive tasks. DHL Global Forwarding, Freight (DGFF) was able to improve productivity by 50%, using UiPath robots to check and notify customers of shipment delays. Using bots to perform menial tasks, frees up employees to prioritize other, more high-value work.

Keep processes on track

After automation, process mining can be used to track whether the automation is going as planned. As bots work highly accurately, the process graph should show limited deviations from the main process flow, which you would normally see with a process handled by a human workforce. You’ll also be able to measure the impact the bots have had on the business.

There are so many opportunities to transform the field of logistics, but it must be done in a controlled manner, using full process understanding, optimization, and automation. It doesn’t stop there either. You need to check if your automation is working as expected, and if necessary, make changes to improve it even more. This turns it into a loop of continuous process monitoring and improvement.

So back to our personality test. Perhaps it shouldn’t be a surprise that a lot of us are Logisticians. As companies become increasingly data reliant, we have no choice but to become more focused on facts, rather than assumptions.

Whatever the case, it’s a good time to be an ISTJ.