How process mining optimises supply chain and procurement performance

Supply chains are only as strong as the processes running through them. Procurement delays, logistics bottlenecks, and inventory shortfalls rarely have mysterious causes. Often, they have process causes. Process mining gives supply chain and operations leaders a data-driven way to see exactly where supply chain processes are breaking down, what’s causing bottlenecks to form, and where the biggest gains in speed, cost, and reliability are hiding.

Almost all industries are affected by shortages of raw materials. For example, the shortage of semiconductors and chips is particularly noticeable among car manufacturers, their suppliers and in consumer electronics. Another example is the increased demand for wood for construction means it is now considered a scarce commodity.

Procurement processes move front and center

The associated costs and the lack of delivery capabilities have a direct impact on both your bottom line and top line. This moves your entire procurement system into the center of the discussion. Analysts agree.

A study by McKinsey said that 81% of companies will need to reimagine procurement operations.

Bain & Company estimates in a March 2022 study that “more than 60% of the total value of procurement stems from operational efforts.”

And a study by PwC (Digital Procurement Survey 2022), said that companies plan to invest an average of € 1.28 million digitalizing their procurement processes.

Process mining and supply chain analysis

Optimization requires process mining and analysis: analyzing your purchasing processes in detail to identify weaknesses, so you can initiate improvement measures.

At first sight, procurement represents itself as a relatively simple operational sequence: A requirement request is provided, examined and transferred into a procurement order. After the product is received from the selected supplier, the product and the calculation are examined and then the invoices are paid.

However, it turns out that several variants and deviations cause a high degree of complexity in procurement. These variants and deviations complicate, increase the cost of, and slow down operational processing.

Here are some examples:

• Alternative offers from suppliers are often not directly comparable
• Requisitions are rejected and revised before an order is generated from them
• Delivery delays occur in manufacturing or transportation; orders are split into multiple deliveries
• Inspection in receiving may reveal quality problems that require returns
• Invoices are disputed and paid only after modification

All these examples lead to repetition and multiple work, and this operational complexity increases both procurement costs and lead times.

Supply chain planning is a complex process that involves phenomena known as the “bullwhip effect,” leading to inventory shortages and oversupply in the wrong places.

Understanding supply chain process problems and deficiencies

Process mining leverages digital fingerprints and enables all procurement processes to be fully analyzed—both in terms of the structure of the flow and the resulting KPIs. Based on the process data, intelligent algorithms for root-cause mining make it possible to reveal the causes and correlations of delivery problems and process deficiencies, and to initiate optimizations.

Beyond the corporate boundary, many companies are now trying to make product production take place closer to the point of sale, in order to counter delivery bottlenecks. Another possibility, especially in the direct-to-consumer sector, is build up a warehouse yourself or use the services of 3rd-party logistics companies—thus enabling e-commerce brands to focus on their core business.

Additionally, the entire supply chain network is at the center of regulatory requirements: the supply chain act passed in Germany comes into force on January 1, 2023, and for the first time it regulates corporate responsibility for human rights compliance in supply chains—not only among direct suppliers, but also across hierarchies. The EU commission has announced that it will issue an even stricter directive.

Monitoring is also essential with regard to these compliance requirements: process mining makes it possible to monitor the specific execution for each procurement process and to compare it with the applicable regulations or to immediately object to violations.

In our global, networked economy, resilient and responsive ecosystems are replacing value chains that were previously fragmented or opaque. To strengthen global connectivity, minimize risks and increase resilience, companies must not only make their own operations more transparent, but also those of their trading partners.

Process mining surfaces patterns in event log data from ERP, WMS, and logistics systems that are invisible to manual review. In supply chain operations, this translates directly into three areas where organisations consistently find rapid improvement: 

Process mining for supply chain: three high-impact use cases 

• Procurement cycle optimisation: identify which purchase order variants are causing delays, and standardise the paths that deliver the best cycle times. 

• Logistics and fulfilment bottleneck analysis: pinpoint where inventory is held due to bottlenecks in a process – whether at goods receipt, quality inspection, warehouse transfer, or last-mile dispatch. 

• Supplier compliance and conformance: compare how supplier-facing processes actually run against how they were designed, catching non-conformance before it creates downstream disruption. 

This is the approach global manufacturers and logistics operators use to turn supply chain process management from a compliance exercise into a competitive capability. It requires the right methodology, the right tooling, and a platform that connects process design, process intelligence, and continuous improvement in a single environment. 

Process mining in logistics: from event data to operational clarity 

Logistics operations generate enormous volumes of process event data. However, most organisations only look at KPI summaries, not the underlying process flows that drive them. Process mining in logistics works by extracting and analysing the actual sequence of events across inbound, outbound, and transport processes: when orders were picked, when they moved between handling steps, where dwell time accumulated, and which routes through the process are causing on-time, in-full failures. 

The result is a factual picture of how your logistics processes actually run – not how they were designed to run – so that improvement efforts are targeted at real causes rather than assumptions.

 Find out how ARIS process intelligence platform can help you form a full picture of your supply chain and procurement processes. 

Process mining is key. Click below to learn how ARIS Process Mining can help your company optimize its procurement processes and heal your broken supply chains.