There is something of an art and science to building a model for predictive simulation, and the way you build it determines the quality of result you get – in terms of output and ability to experiment with ‘what-if’ scenarios. Simply opening software tools and trying to model a process will only get you so far. Instead, before touching the tools, start with a scoping exercise to explore the business questions that need answering over the short and medium term and in context with the business’ longer-term strategic aims.
Here’s an example. Don’t start with: ‘We’re looking at some options for the Product A/B process. Can you model it for us?’
Here’s a better starting point: ‘Over the next 3 years, we anticipate a 30% increase in volume of Product A and a 15% decrease for Product B. We need to understand what the current capabilities of the process are – and whether it’s capable of handling the shift in demand given the mix of work content in each product. Our future manufacturing strategy focuses on automation where it makes sense, so the business needs to understand the impact of labour availability and skills levels vs equipment investment so we can achieve this with a capacity buffer of 10%. Can you set up a scoping exercise that will help us detail the different inputs, levers and outputs we need to experiment with to meet this requirement?’
The second approach helps you maximise ROI for 2 reasons:
Here's a common scenario that leads to suboptimal ROI. The business invests in predictive simulation software and nominates someone to be the modeller. Let’s call him John, and he was chosen because he used similar software at university. But John has a day job, and when a team asks him to build a model, he has to fit it in with other priorities. When John finally has some free time between other projects, he quickly puts a model together. Soon after, John leaves the business or changes role. The organisation is left with an undocumented model, and there’s uncertainty about whether that model actually answers the team’s questions. Plus, the business now needs to train someone else on the software. In other words: there’s a very low return on investment.
There’s immense ROI to be had with predictive simulation (these impact stories give you a taste), but to generate that value, you need to organise for success. This involves providing the technology, training and processes that create the right environment. Importantly, it also involves making predictive simulation a key part of people’s role and objectives to ensure they’re invested in making it a success.
When we talk about having dedicated people with the right technology, training and processes, we don’t necessarily mean you need a team of in-house simulation experts. At Haskoning, we break organisational simulation capability into 4 levels:
To maximise ROI in predictive simulation, consider your current capability level and where you want to be, with specific thought allocated to the ‘’why’ and ‘how’. This thinking will help shape your investment strategy. For example, you don’t need to aspire to Level 4 capabilities in-house. You could deploy an external partner model and internal ‘translators’ who coordinate between your partner and the business. These ‘translators’ own the simulation concept and are in charge of communicating the organisation’s challenges and requirements to the partner, who scopes and builds models to enable the results to you.
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