- In Blog
- Posted 22/02/2017
Shifting from a Reactionary to a Future Performance Led Business
Without a doubt, the most successful businesses are those that are one step ahead of the game. Rather than firefighting or attempting to close the stable door after the horse has bolted, a proactive business has the ability to prepare for and tackle business hurdles before they appear over the horizon. The challenge facing many companies in the digital age is how to take a reactive company culture, responding to particular problems and challenges only once they appear, and turn it into a future-performance-led business. So, what you’re trying to enable is an organisation that has the foresight to predict any future challenges and provide greater insight into improvement opportunities throughout the business.
The decision-making process is therefore optimised to cultivate a more proactive approach to problem solving and process improvement, from the board-level down. As Eric Miller points out in his recent blog, looking back is just the start, what you really want to do with all your data is predict future behaviour and conduct ‘What if’ studies.
Optimise business planning and reduce risk through a ‘digital twin’
One way to achieve this culture shift is through the use of predictive simulation. This enables businesses to develop dynamic ‘what-if?’ models of their processes and facilities. Where traditionally simulation has been used to support design, build and operation of processes, this is now changing. Savvy businesses are waking up to predictive simulation as a crucial means of making optimal planning decisions. They now harness the power of testing future business plans in a digital twin of their business processes, gaining much needed data-driven evidence of future performance implications of upcoming decisions about the process and changes to it.
Mars chocolate and BAE Systems
An example of such a business is BAE systems who used advanced predictive modelling techniques to identifying likely maintenance needs. Another example is Mars Chocolate who developed a dynamic simulation model of their North American Chocolate Supply Chain and were able to run strategic ‘what-ifs’ on a quarterly basis, balancing supply and demand for chocolate making capacity across its entire estate. This provided evidence-based decision making to the S&OP team. Such strategic, not tactical, modelling can provide the key to optimising business performance by helping to construct valid, fully tested dynamic business plans and substantially reduce the risk involved in major long term capital investment, rationalisation or planning decisions.
Such repeat decision making is enabled with a future-proofed strategic asset in the form of a flexible, re-usable business model which can be reviewed, refined and re-evaluated at any time over any future timeline.
From the factory floor to the boardroom – reducing speed to answer
Predictive Simulation will always have a place supporting tactical ‘factory floor’ decision making, but its deployment to business problem owners and senior decision makers in the boardroom is the real way forward for businesses that are serious about maximising opportunities for future success. Companies adopting such a strategy will have sets of standardised, flexible predictive simulation assets in place, which can be deployed throughout the organisation and accessed by any relevant employee, from the shop floor to the board room, at any time.
A significant blocker to this in the past has been the speed to answer for non-simulation-skilled decision makers. In traditional simulation projects a decision making ladder exists, where technical modellers develop a model to answer a specific question, simulation model analysts would run scenarios and evaluate options, and would then feed a consolidated view and recommendation to decision makers. Such processes can be relatively inefficient and intensive, with the result that predictive simulation was previously reserved for answering major business questions with sizeable risks and rewards associated with them and non-critical timescales.
Advances in cloud computing have revolutionised the ‘speed to answer’
As with the Mars example earlier, it is possible to create flexible, future-proofed models for regular, efficient decision making, but this still requires specialist software to be installed locally and run by individuals with reasonable awareness of the software. The rapid advances in cloud computing however have revolutionised the ‘speed to answer’ ladder. Complex technical predictive simulation models can now be deployed on the cloud, offering zero footprint, intuitive, non-technical decision making on any internet enabled device. Integrating cutting edge predictive simulation output with cloud deployment and leading BI tools such as PowerBI or Tableau finally puts the powerful dynamic business model directly into the hands of the decision makers.
Keeping up with the pace of change more important now than ever
The pace of change for businesses has never been higher. Decision makers are answering more business questions, in a shorter time frame than ever before. The rise of I4.0 and the IIOT will cause this pace of change to rise yet further. Predictive simulation offers a proven means for organisations to de-risk the changes coming to their business. But only by adopting a future-state modelling culture for regular strategic planning decision-making throughout the organisation can the true value of predictive simulation solutions be realised. By extending the reach of simulation beyond the factory floor, it can significantly increase its ROI and optimise strategic and operational decision-making.
If you would like to have a further chat about anything I’ve mentioned above, please feel free to comment, connect on LinkedIn or drop me an email at firstname.lastname@example.org.