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  • By Oliver Bird
  • In Blog
  • Posted 17/06/2015

Oliver Bird looks at the role of simulation in planning for growth

Speak to any group of business analysts or project managers and a great deal of them will tell you that when it comes to managing the plans of a business, Excel is king. Want a 12-month sales forecast? No problem, I’ve got a spreadsheet for that. What about any predictions on the cost of raw materials over the next couple of years? Yes, I’ve got that in a spreadsheet too.

Without doubt, in the right pair of hands, Excel can be a powerful and indispensable tool for planning how best to grow a business. But, when it comes to delivering a holistic picture of what a business will be like in five or even ten years, alongside an in-depth insight into business opportunities over the same time period, Excel has its limitations. To plan a business, you need an accurate, transparent and dynamic plan, one which factors in an inordinate amount of complex variables, and one which isn’t constrained by the software tool used to create it.

One company who recently experienced this frustration first hand is Hayward Tyler, a leading manufacturer of motors and pumps for the oil & gas and energy industries. In order to capitalise on market opportunities and boost profitability, it set about a business transformation project designed to double the size of its facility, increasing the number of units produced.

One of the main challenges faced by the business was to try and pull together an accurate picture of exactly which business processes and resources were needed to deliver against future demand, while making sure that any changes to the business focussed on maximising efficiency. Add to this the need to understand the crucial timing of key asset investments, and you can see why Excel just wasn’t cutting the mustard.

A model created in Lanner’s WITNESS simulation software, Hayward Tyler was able to factor in myriad variables (including equipment, people, processes, raw materials, key milestones, factory layout and shift patterns, to name but a few) to create a virtual, dynamic factory. The model highlighted exactly what would be required and when, in order to meet demand while maximising both performance and efficiency. Hayward Tyler used this to create the business growth masterplan for the next ten years; a robust, accurate plan which pre-empts forecast changes in the business, ensuring productivity remains high while minimising costs.

As Hayward Tyler found, the virtual, dynamic models created by WITNESS can demonstrate the robustness of a business plan and the diligence of approach to finance partners, as well as other stakeholders (both internal and external). This not only helps to ensure buy-in to new processes, but serves to reassure all stakeholders that what they have is the optimum platform from which to ensure the successful growth of the business for the foreseeable future.

Across the world we are seeing the pace of change accelerate, data explode and markets become ever more unpredictable. Against this backdrop the static nature of spreadsheet-based planning means it is likely to become outdated by the time it is filed. In the pursuit of growth, Leading players are quickly recognising that if they want to be at the top of their game, they need to play with the right planning tools.

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