Ingka Group (an IKEA retailer) + Celonis
“When you have an undeniable, unbiased vision of the truth that process mining gives you, you can then go to someone and say, ‘When a product you’re trying to pick is damaged, these are all of the effects downstream.’”
On the hunt for the elusive ‘perfect order’, Ingka Group called on process mining to see every event in their sales order process. Soon after, the team used the technology to score company-wide continuous improvement.
Context: An agent of action, an agent of change
For Ingka Group, an IKEA retailer, streamlining processes speaks to their franchisor’s core philosophy of. “The true IKEA spirit” is defined in part by “simplicity of our way of doing things” according to IKEA founder Ingvar Kamprad. Safe to say the work of process improvement is in their DNA.
Charged with delivering on process improvement is Ingka Group’s center of excellence, led by Process and Data Insight Development Manager Tim Hills. They’re building momentum as they evolve from informing improvement actions into empowering the business to change itself.
“We want to make every decision better, [leveraging] process and data insights into our operation to make sure that the changes we want to make, we make them optimally and they’re realized optimally.”
Tim Hills, Process and Data Insight Development Manager, Ingka Group
Challenge: Optimizing the sales order flow into the ‘perfect order’
One of Ingka’s focuses was the sales order flow — following customer payment through picking, shipping and delivering goods. And they didn’t aim small: they pursued the ‘perfect order’. That means (drawing on APQC’s definition) flawlessly fulfilling a customer order — taking it correctly, allocating inventory immediately, and delivering the product on time with an accurate tax document.
The ‘perfect order’ gave Ingka a top-level KPI to calculate the rate of order performance and use it as a metric. They could then understand how they’re performing in a way that’s enriches connection and comparability internally and to other businesses.
With this sales order transformation initiative as a platform to prove value, Ingka is now able to scale their center of excellence, offering learnings, and optimizations to the rest of the business.
Solution: Minimizing imperfections through process mining
To remove undesirable steps from the sales order process, Ingka needed to gain a picture of all the events occurring in the creation of an order. A tall order, you might think. But process mining gave them total visibility over their current sales order process by analyzing nearly 170 million sales orders to uncover process variants “in the millions”.
With that, they could then establish which variants detracted from that all-important ‘perfect order’. Reducing failed click-and-collect pick-ups is a prime example. With the support of process mining experts, those responsible for functions both within countries and globally reviewed appointment slots. They identified that their wide collection window could be narrowed to reduce cancellation rates and improve picking efficiency. All benefitting customer satisfaction, of course.
Elsewhere, their process optimization was two-pronged. First, they looked at how to minimize the impact and occurrence of imperfection, such as remedial after-sales action, item or service modifications, and operational delays. Then they asked how to make sure ‘perfect’ events — payment executed or sales order completed — were accomplished optimally.
Ingka breaks this down into four main steps:
Start by identifying the pain point, knowing who in the business is unable to perform an activity, task or process, and what the impact is when they can’t.
Then map root causes. You might assume that the root cause arises from the same area as the pain point, but process mining will show you that might not be the case. Ingka’s case study on an order fulfillment challenge shows how a problem in that process actually came from the customer order stage.
Next, figure out how to resolve the root causes, such as a change in behavior or work routine.
Lastly, follow up to ensure the pain doesn’t still exist or that fixing one thing didn’t simply transfer the pain somewhere else. It’s vital to understand the end-to-end process context to check that addressing something in one area hasn’t negatively impacted something elsewhere.
Ultimately, Ingka is building this flow into a continuous improvement loop, creating a key insights report to communicate outcomes to many people in the company, so more can gain benefit from it and scale the result.
“By bringing together what we can do with process mining, we can make sure that we’re achieving the targets that we set ourselves.”
Tim Hills, Ingka Group
Vision: A culture of process improvement that ripples throughout the business
Ingka knows that there will always be more to do: continuous improvement doesn’t like taking days off. But that’s what motivates their center of excellence, which manages the Celonis platform and the adoption of process improvements. They’re now looking to round out the end-to-end process by expanding beyond order management and processing to other processes such as procurement, accounts payable, and accounts receivable.
The center of excellence might be the core team, but they want to enable as many people as possible to take advantage of Celonis to turbocharge a culture of continuous improvement. After all, as we said, it’s in their DNA.
“As we embark on this journey of continuous improvement, keeping our customers and co-workers at the heart of all we do, finding new opportunities and getting to precise areas of value potential more quickly will enhance our ability to realize that value. In a complex, connected end to end process such as the sales order flow, the number of dimensions are too high to brute force. As such, we have been co-innovating with Celonis on AI-enhanced insights to accelerate time-to-insight and time-to-value. We’ve gone from one analysis taking an hour to hundreds of thousands of analyses taking a click.”
Tim Hills, Ingka Group
