3 ways simulation helps maximise project ROI
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In this article series, we’ve looked at how predictive simulation helps you calculate ROI and achieve soft ROI benefits. Here, we look at 3 ways it helps you increase the return you gain from an investment.
1. Identify early wins that build momentum
Capital projects aren’t monolithic – they’re made up of myriad different design, purchasing, process and optimisation decisions. To maximise ROI, you need to sequence those decisions correctly, which can be difficult when you’re dealing with complex cyber-physical systems.
Predictive simulation simplifies this planning process because you can test what-if scenarios in a risk-free environment. As a result, you can clearly understand the implications of different decisions, which helps you identify early wins that give the project ongoing momentum.
OneWeb Satellites’ experience is a great example. Traditionally, satellites have been designed and manufactured manually, with a handful produced each year; OneWeb was building a factory to mass-produce them. The team needed to design a facility that delivered the required throughput while accounting for complex assembly processes and supply chains.
OneWeb used Twinn Witness predictive simulation software (formerly under the Lanner brand) to create a digital twin that incorporated a vast range of production, automation, quality assurance and supply chain variables. The modelling helped the team create an accurate masterplan for building the factory, planning the project in a way that would deliver on the production targets. Importantly, the digital twin accounted for a learning curve – because the first satellites would take longer to make than the 400th one due to efficiency increases over time.
The process was so successful that OneWeb Satellites replicated it for a second factory.
2. Understand the questions you should be asking
Let’s say this is the basis for your project: customer demand is increasing, so you need to increase production. Therefore, the plan is to invest in a new line. But will installing a new line deliver the required throughput increase?
To answer that question, you need to understand the line’s impact on other processes. This leads to a huge list of subsidiary questions, as Let’s say this is the basis for your project: customer demand is increasing, so you need to increase production. Therefore, the plan is to invest in a new line. But will installing that new line deliver the required throughput increase?
To answer that question, you need to understand the line’s impact on other processes. This leads to a huge list of subsidiary questions, as Britvic Soft Drinks discovered. They used predictive simulation to understand and prioritise those subsidiary questions that would affect the project’s ROI.
As Neil Brinkman, Britvic Operations Optimisation Manager, said: ‘Thanks to the model, we were able to home in on the true questions we were trying to answer, and that was really valuable to us.’
By simulating the new line in different ways, Britvic could analyse key questions related to operations inside and outside the facility. For example: discovered. They used predictive simulation to understand and prioritise those subsidiary questions that would affect the project’s ROI.
As Neil Brinkman, Britvic Operations Optimisation Manager, said: ‘Thanks to the model, we were able to home in on the true questions we were trying to answer, and that was really valuable to us.’
By simulating the new line in different ways, Britvic could analyse key questions related to operations inside and outside the facility. For example:
- ‘Can we get the vehicles in and out of the gatehouse on time?’
- ‘How many loads are we going to be loading in an hour?’
- ‘How many forklift drivers do we need?’
- ‘Are there any traffic pinch points?’
Because the model helped highlight priority questions, Britvic was able to design the upgrades in a way that ensured material flows end to end. And that gave confidence that the new line would achieve the new production target.
3. Build an evidence-driven decision-making culture
A sure-fire way to derail project ROI is to be guided by assumptions rather than evidence. Because predictive simulation provides a mechanism for gathering evidence, it helps enforce a proof-based approach to decision making across the organisation. Many companies we’ve worked with now have policies requiring predictive simulation as part of capital project planning.
One such company is Diageo. Using Witness, we helped them build a generic model that could be easily configured to represent different production lines at each of their packaging businesses. Within the first 3 months, the model:
- Demonstrated that a line could perform at a record 80% efficiency by addressing minor stoppages in 2 particular areas
- Helped avoid £80,000 in capital costs by showing that a proposed investment would fail to deliver the required performance boost
- Demonstrated the ROI for an additional £400,000 shrink-wrapper
- Saved many millions of pounds by showing that a new mid-line buffer would have little impact
As a result of these benefits, all line configurations at Diageo now must be simulated before action is taken. As Doug Nicholls, Diageo’s Technical Director, said: ‘Predictive simulation is one of the best investments we have ever made.’
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