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Medical device manufacturer KARL STORZ aims for process excellence with Celonis

Derek du Preez Profile picture for user ddpreez May 20, 2024
Summary:
KARL STORZ is building a ‘process excellence community’, as the global business aims to reduce process time and increase efficiencies with Celonis.

Doctor pushing button cloud lock security healthcare network on virtual panel management. © MaximP - Shutterstock
(© MaximP - Shutterstock)

Although you may not have heard of KARL STORZ as a brand, it’s a company that has played a significant role in developing a range of 15,000 medical devices in its 75 year history, one that delivers annual revenues of over $2 billion, and has over 70 entities in 40 countries around the world. In other words, it’s a giant in its field. However, as is often the case with organizations of this size and history, layers of complexity have developed over the years and the company is looking to simplify its processes and introduce new efficiencies into its operations. 

It is doing this through the use of process mining vendor Celonis, by scaling a ‘process excellence community’ amongst its people, and adopting a continuous improvement model to implement changes that have an impact. 

Etienne Kneschke, Executive Director Global Business Process Management at KARL STORZ, says that the ever increasing transfer of processes into digital tools, which has allowed organizations to scale efficiently, has also meant that understanding the intricacies of processes has become more challenging:  

Why do we use Celonis? We struggle with challenges in our global supply chain; with increasing regulation; with a wide variety of products that relate to different processes and variations; with digitalization. We have to bring all this together. We manage all this, in the end, in processes. 

The last twenty, thirty, forty years, process management was of course about process analysis, but we did this more or less manually. 

With increasing digitalization and global supply chains, it's not possible. I cannot travel from here to there to do interviews, to do shopfloor walks, etc. And with increasing digitalization, of course, our processes disappeared in IT systems. 

KARL STORZ is one of the Celonis customers also making use of BPM vendor Symbio, which was acquired by Celonis at the end of 2023. The medical device manufacturer has been using the combined technologies since 2019 to not only understand the realities of how its digital processes operate, but to also see where institutional knowledge is stored in the ‘process gaps’, and then to model new process scenarios. 

Kneschke says that the complexity in understanding the big picture, and getting transparency into how processes operate, will not only introduce efficiencies for KARL STORZ, but also lead to better risk management:

In the end, all the management systems have interests in processes, because I need to manage my risk in a process. I need to manage controls. I need to manage my IT application, my interfaces, and my master data. 

I’ve tried to bring all the management systems together, and from a business process management perspective, I provide the backbone to the company. And the backbone is the process flow. This is something we can see with Celonis, we can reconstruct it in an automated way, so it's a thousand times faster than to model a process. 

And the combination of Celonis and Symbio is providing a fuller picture for the organization: 

With Celonis we have the possibility to track, to visualize and to reconstruct process steps based on digital footprints. Nevertheless, there is a lot of information that is not covered in our IT systems, especially when it comes to business rules, to standards we have to apply with on a certain process step, etc.

And here's where Symbio comes into play. It's about joint forces when you bring such a powerful tool like Celonis together with a powerful tool like Symbio. In Symbio, we have different information to Celonis, so it's a perfect symphony with those tools together. 

Scaling a community

The first use case that KARL STORZ started with was in ‘order to cash’, where this symbiotic relationship between Celonis and Symbio proved immediately useful, according to Kneschke: 

With Celonis, we can reconstruct and visualize processes and process flows based on digital footprints. But as many companies know, there are also many other steps. What about the manual steps? If we talk about digitalization, we should also think about the manual steps that I can't see with Celonis, which are in-between some of the activities.

Let's take the order to cash example. The first step is ‘order entry’. The next is ‘manage order’. Then later on ‘goods received’, etc. But there are of course steps in-between. These are the steps I can’t see. From one activity to the next we can see in Celonis there is a long cycle time…maybe there’s a bottleneck or there are change activities, but what is the reason for that? 

And quite often the reasons for that are the manual steps, because we have some information in Excel or SharePoint or on our desktop, that we take to complete the order entry. 

In order to digitize processes, KARL STORZ needs to understand these manual steps too, so that it can model new opportunities, streamline the process and standardize on applications. The company is measuring the success of its process optimization using what it calls a PPI (process performance indicator), which measures at an aggregate level the overall success, but is heavily focused on improved speed as a desired outcome: 

At the end of the day, it's quite complex, because processes have different characteristics, challenges. But there is one thing we want to measure and this is really easy: all processes are about time. The most important and most famous KPI is cycle time. And cycle time is something you can measure in all processes. This is a common characteristic.

How can you improve your cycle time? You can streamline the process, you can automate the process, you can re-engineer the process. 

Cycle time is the key KPI that KARL STORZ gets from the Celonis platform, whilst a process maturity index is the measurement it gets from Symbio. The company has set up a process model whereby all KARL STORZ processes are maintained.  

The priority, however, is the process lifecycle - the overall strategy for how KARL STORZ thinks about process improvement. This is the identification of a process, the definition of process goals and strategies, process modeling, connecting the process to Celonis, deriving weak points, transforming weak points into requirements and solutions, implementing these requirements, and then monitoring for improvements. This then goes back to the beginning, as Kneschke notes: 

This is then a continuous improvement cycle and process. From my perspective, if you have such a process applied in a company, in an efficient way, this then drives process excellence. 

There is no end stage, because process management is a never ending story. And we will continuously improve our processes. My goal is to achieve process excellence.

Interestingly, KARL STORZ is also not thinking about process mining as a ‘Center of Excellence’ operation, as is often the case. diginomica has highlighted a number of times how buyers typically scale process optimization from the center, trying to engage with business partners and share knowledge from a core operation. However, Kneschke thinks that this is short sighted and won’t allow organizations to achieve true process excellence: 

What is process excellence? Yesterday I learned that some companies call their departments a ‘center of process excellence’. To be honest, this is a mistake. Process excellence is not a department. 

I am a business process management partner. I want to drive business process excellence, this is something I will do with my community. My business partners belong to my community. And with my business partners, I want to implement new process driven roles - process improvement managers, process owners. 

This community in collaboration with my department…this is then the process excellence community. 

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