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Product News, Process mining

Why And How To Identify Rework in Business Processes

minit-why-and-how-to-identify-rework-in-business-processes

Helping eliminate waste in your company’s processes is one of the most crucial tasks of Process Mining. 

And rework is exactly the type of waste that causes trouble in running your business effectively. 

Rework is a repeated activity such as changing details in a purchase order after it has been already created. Not being able to get the order right the first time requires your employees to repeat it again. 

There are many reasons why this would happen, and they fall into two buckets - due to business changes or due to negligence. 

 

Business Changes 

The first, viewed as acceptable or even required rework, is when the customer changes the order based on internal developments or needs. This type of rework cannot be removed entirely as its unpredictable. 

However, if this does happen often, a process analysis may lead to improvement even in such cases. 

For example, you could improve the gathering of information from the customer, and thereby better anticipate possible developments when creating the order in the first place. 

 

Negligence

The unacceptable kind of rework that you should be on the lookout for, is the one coming from negligence or a faulty process. 

Usually, this means forgetting to add a minor, but important detail such as a delivery address, or making a mistake in the amount of the product purchases. 

This might seem only as a minor issue. However, consider what happens in context. 

An order is created, it goes further into planning, then into manufacturing down to delivery. There -- if you’re lucky -- someone uncovers that the address is wrong before goods are shipped. 

The direct cost is that it needs to go back to someone who can adapt the order, which means:

  • time and effort spent again, 
  • opportunity costs,
  • delay of other orders that are waiting, etc.

Yet, the indirect costs are much higher: imagine the delays down-stream, less-than-ideal customer experience due to delay in delivery, and so much more. 

And in case of a multinational corporation processing tens of thousands of orders, if this happens only in 5-10% of cases, the amount of money you'll be losing in both direct and indirect costs is huge.

So, how do you find rework to avoid all of this?  

 

Today, It's All About Duration

In any kind of Process Mining software, identifying self-loops is quite easy. 

These types of repetitions are visible in an instant right next to an activity in the process map. ​However, self-loops are usually considered less valuable than process loops, at least from a business perspective. 

So we better buckle up for the explorer's ride on identifying the true villains of the day - loops.

Without specific Rework identification functionality in a Process Mining solution (we'll come back to it in a minute), you need to dig deeper in order to track down the loop. The simple detection whether such a rework exists in a specific case is possible with sequence filters.

Having applied these filters, you can identify a process loop thanks to the difference in process duration. As common sense suggests, with rework, the process takes longer than without it.

minit-rework-repeated-activities

If your Order To Cash process generally takes 3 days 13 hours and 32 minutes, but only 2 days 23 hours and 12 minutes when using adequate sequence filters, showing you whether any activities have been repeated, you are on the right path towards a surprising discovery: yup, a loop. 

Now you know the process can take much less time, and you need to find where the issue is.

 

Tomorrow, It'll Be About Deep Investigation

What's been going on in the Minit's kitchen? A new, easier way to identify loops. Yaay!

Minit's Rework Detector enables you to investigate your processes' rework on a whole new level.

Until now, you could only tell that rework exists in your process. However, pinpointing it easily and detecting its root cause was more difficult. Especially in complex processes with less obvious loops. 

The Rework Detector adds a new point of view to data analysis. Now you can separate the loop starting activities (triggers) and ending activities (finishers) from the actual repeated activities.minit-rework-loop-triggers-finishers

Because as a decision-maker, you are much more interested to know which activity starts the loop in order to further investigate the real root cause of inefficiency. 

Just then you can act on it to prevent it from further crippling down your operations and generating unnecessary costs.

The bottom line? With the Rework Detector, which by the way is unique on the market, you'll be able to answer questions like:

  • How many cases contain rework? 
  • How often is the particular activity repeated? 
  • Is rework a self-loop over the same activity or is it a more complex loop over several different activities? 
  • Can I filter cases where activity X started the loop? 

What is all the information for, though? 

 

Rework Detector Demo

Generally speaking – well, specifically, too – with process loops, you're cooking up trouble in your lab. Why? Because all in all, process loops can result in bottlenecks, higher costs, slower production, and weak ROI.

Now, are you interested to know how this Rework Detector can help your daily business? Are you eager to learn what it can do, in a very practical way? 

Sign up to receive the Minit 4.5 Launch Webinar where our Product Visionary Michal Rosik and Head of Professional Services Richard Lipovsky will cover it all. 

Ready to eliminate rework in your business process? See you at the webinar then!

Richard Lipovsky

25. 07. 2019