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How Process Intelligence can help automotive logistics through the transformation
MAHLE Group’s Head of Logistics on using Process Intelligence to enable smarter Inventory Management, cut costs, and drive forward predictive reporting at the global automotive supplier.
Material shortages, rising raw material and energy prices, geopolitical tensions, new laws and regulations — the list of challenges seems endless. To remain successful in the market, logistics companies need to make the world's supply chains more agile. At MAHLE, we know this too.
As Head of Group Logistics for one of the world's leading automotive suppliers, it's part of my job to future-proof our supply chain. Transparency, agility, and resilience are buzzwords that I'm sure other supply chain managers are familiar with. But supply chain transformation is easier said than done when global supply chain networks are becoming increasingly complex, processes run through isolated systems, and material availability, demand, and sales are subject to extreme fluctuations.
Our answer to this: digital transparency transformation.
Read on to find out what I mean by this — and why Process Intelligence and, in particular, the combination of process mining and AI can show the automotive sector the way through this transformation.
Here to stay: heterogeneous system landscapes
Companies often struggle with an extremely complex system landscape, particularly in the automotive sector. Having worked for two decades in the industry, I know that we’ll never get our IT landscape to be completely standardized. There’s a reason they say a transformation never really ends.
“Those who understand this and invest in software that can link and orchestrate these heterogeneous systems will gain a massive competitive advantage.”
With Celonis, we have found a platform that helps us do exactly that in Inventory Management. Because Celonis extracts data from all IT systems and uses process mining to create a digital twin of our supply chain, it acts as an intelligent layer for our IT stack. And more importantly, we can integrate the data from any system we might add in the future.
For anyone who has never heard of process mining, here’s how I see it: process mining provides us real-time data to improve our processes and Inventory Management in particular, all in a targeted manner.
Intelligent Inventory Management of the future
I’ll happily admit: I initially underestimated the potential of process mining. I had already experimented with a few software tools — but I had never seen such a holistic and realistic approach to uncovering optimization potential in processes and realizing value.
Together with Celonis, we developed an Inventory Control Center and adapted it to our requirements. For the first time, we could view and control incoming and outgoing material movements, and therefore inventory levels, worldwide and in real time. And that's not all. We have also made a huge leap forward in terms of predictive reporting.
“With the Inventory Prediction Dashboard, we’ve created a solution that allows us to accurately predict stock levels in the coming months and intervene proactively.”
Within six months, we rolled out the Control Center globally to almost 150 plants – with astonishing success. We have since reduced our inventory by 20% across all plants and fundamentally transformed Inventory Management.
The benefits of Process Intelligence at a glance
Operational alignment: We have managed to get leaders and employees at plant level talking about data in a standardized way. It’s Celonis’ scalability that really stands out, because it can aggregate the data for our management, but also break it down in much more detail for our shop floor teams. This means that management can equally work with the platform as the individual dispatcher who is responsible for five item numbers. For me, these are the systems of the future.
Real-time insights: With the insights from Celonis, we are quite literally changing the future because you can see how your decisions today will affect the stocks of tomorrow. Based on this, we can make much more precise decisions on all levels: group, region, location, process owner.
Proactive supply chain management: With Celonis, we can not only see what our plant inventories look like today - but where they are heading in the coming months. Automatic alerts thanks to Action Flows flag impending overstocks early and recommend optimal countermeasures, such as adjusting supplier quantities or postponing replenishment dates. Conversely, we can also prevent stock-outs — meaning we don’t just reduce inventory costs, but optimize delivery reliability.
Transparency and efficiency: We provide everyone with a tool that makes working on inventory optimization much more transparent than before. And the teams enjoy it because they become more efficient.
Change management: Tools like Celonis that have such great benefits are an easy sell to the entire organization. When something makes work easier, word spreads like wildfire. There are topics that I’ve been talking about for years. What we can do now has reached a huge number of employees in just a few months.
The path to a fully digitalized supply chain
These initial successes in Inventory Management are not the end of our journey. I see great potential to extend this new form of predictive reporting to other areas, such as transportation costs or packaging sizes.
However, in order to have a competitive advantage in the long term, we are also looking at the competition outside the automotive industry. Take the e-commerce giant Amazon, which updates customers in real time from the moment the order is made until it’s delivered to their doorstep.
The automotive supplier industry worldwide is not quite there yet — partly because conditions are sometimes against us. We have a much more complex logistics and freight forwarding landscape with tier 1, 2, and 3 suppliers, subcontractors of subcontractors, etc.
“That's why we need a fully digitized supply chain that includes third-party suppliers.”
If we manage to truly digitalize our supply chain end-to-end — i.e. from supplier to production plant to end customer — we can purchase, produce, and deliver even more intelligently. For example: If I know the production risk of our suppliers (Do they have the goods in stock? Can they produce what I need, in the quantity I need?) I can adjust my safety parameters or order deadlines accordingly.
There is still a lot to do to get there. Not just at MAHLE, but industry-wide. Celonis' Process Intelligence helps us to digitally map our processes and take the first steps down that path.
Want to learn more about our journey with Celonis? Read MAHLE’s full customer story.
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