Engineering Firms: Use Process Mining for Competitive AdvantageLet’s talk Process Mining and Engineering. Why? Because it’s the silver bullet that many Engineering firms are looking for but have never found. Let me explain.
I’ve spent years working at small and large Engineering firms and they hardly made any money. Engineering firms are notorious for making 1 to 3% net margin at the end of the day. The joke was that the only reason these firms exist is to keep people employed! Don’t get me wrong, Engineering is a great and rewarding career! I did it for 20 years and have fond memories of it, but I hated the constant stress to squeeze out every nickel.
The firms I worked for had very simple KPI systems, like a performance indicator. The performance indicator was a simple ratio of your budget spent relative to budget remaining. There would be project reviews and if that value was 1 or above, then you were doing well. I found this to be too simplistic and subject to failure if unforseen events happened.
When you have a large transportation or infrastructure project, you’ll have many design professionals involved. Many of them will be from the same firm and might be Electrical, Civil, Mechanical Engineers, and even Architects! All these professionals design plans, interact with one another solving many problems.
There are many moving parts. Add in quality control, plan production, and delivery dates, and you have a set of many complex process. It gets so big that it’s hard to find where problems exist that can derail delivery and performance. Engineering firms make money from speedy delivery and keeping costs low.
Project delivery is often affected by waiting on some upstream process to finish. Costs get out of control usually on poor quality control. Usually one affects the other one, so a project can get quickly out of control.
How to fix?
Engineers are notorious for thinking they can solve everything themselves. After all, they’re Engineers! This often fails because they’re tasked with delivering projects and squeezing out nickels. Another roadblock is that these processes are very complex, they’re hard to understand. Nothing gets solved and problems in upstream and downstream processes remain. The cycle of poor net margins continues.
Is this even solvable? The answer is yes and it hit me once I read an article on Data Analytics and Engineers. Engineers do a lot of analytics to solve problems, they’re often they’re Data Analysts and don’t even know it! Give an Engineer a license of Tableau or Qlik and watch them go nuts. They’d be building correlation matrices and visualizing them in seconds flat.
Yet, when it comes to analyzing processes, things get very complex again. These simple analytics are great but they only show what happened and not the root cause of a problem. For that we need advanced analytics and something called Process Mining.
Simply put, Process Mining is the analysis of an organization’s internal processes. Here’s a few areas where Process Mining can be applied to:
- Internal Financial Transaction flow
- Quality Control & Performance Analysis
- Compliance with standards
Pretty much anywhere you have a business process, Process Mining can help. It can help you find where your problems (and successes) are, optimize performance KPI’s, and even find better ways to do something. That’s great but how do you deal with that complexity problem? That’s where the power of modern computers, an extension, and a real data science platform come into play.
I recently watched a presentation given by my colleague, Dr. Ralf Klinkenberg. He showcased how the RapidProM extension is used for process mining and analysis. He showed how to can connect databases, flat files (XLS, etc) into a visual analytic platform. There is no coding involved and Engineers and Managers can quickly learn how to use this platform.
Ralf does an amazing walk thru and analysis of an Italian Traffic Fine collection process. Watch it yourself here:
The presentation was utterly amazing and got my wheels turning. I saw so many applications to the Engineering world that could use. Want to learn what process contribute greatly to your bottom line? Then use Process Mining. Want to find your bottlenecks that affect your project delivery? Start with Process Mining.
Process Mining has ability to impact the Competitive Advantage of an Engineering firm in so many positive ways. The applications are ENDLESS! Any questions? Just ask me.