key take-aways

  • 1. The role of digital technologies in mitigating risk

  • 2. How predictive digital twins can provide a view of the future

  • 3. How you can dramatically improve demand and capacity planning

The role of digitalisation in mitigating risk

Enable your business to thrive in uncertain times

From allowing people to effectively work from home, to automating processes on the factory floor, digital innovation is at the heart of many business initiatives today. And this is especially true when it comes to making short, medium or long-term decisions to ensure business resilience.

There are a number of digital technologies that can be implemented to enhance a company’s robustness in the face of disruptions and volatility.

Predictive digital twins, powered by business process simulation technology, are playing an increasingly important role in answering all-important resilience questions – enabling businesses to thrive and not just survive in an uncertain landscape.

Demand and capacity planning is more complex than ever

In times of economic stability, business planning is not always quite so challenging. You can expect to make reasonable forecasts as to what the demands on your business might be, and how you need to set up to meet them.

However, in these unprecedented times, businesses need to navigate their way out of the pandemic-scarred macro and micro-economic situation, and the resulting effects on domestic and international trade policies, supply chain availability, and volatility.

In addition, there are ongoing government ‘green’ agendas, rapidly changing customer demands, technology-driven business disruptors, and new, emerging competition. One thing is certain: there are so many new variables and complex correlations to consider, that the pathway to success is harder to navigate than ever.

It can feel like a minefield to evaluate these new challenges and understand how different business scenarios would affect your company’s ability to respond. Especially when you know that the penalty of failing to respond is significant.

For example, a 30-day disruption caused by supply chain vulnerabilities can lead to 3-5% EBITDA margin gaps, according to McKinsey.

So, what solutions are there to help decision makers looking to make critical decisions around future business footprints, re-shoring, recruitment and skills requirements, automation innovation and technology investments, or new supply chain configurations?
 
Predictive digital twins can help make sense of these complexities, providing a virtual model of your business to help you answer both tactical and strategic questions about the things that affect your ability to hit KPIs.

With a digital model of your business, you can ask “what-if” questions, such as:

  • Will investment in Industry 4.0 technologies help us improve our responsiveness?
  • What are the risks of consolidating production into a smaller footprint?
  • Can we successfully move from having a single NDC to having regional ones?
  • Should we increase stocks of raw materials or finished goods to mitigate the risk of supply chain disruption?

These complex, interconnected questions aren’t ones an individual engineer, analyst or manager can answer using a simple spreadsheet or ‘current state’ BI dashboard. They each have myriad dynamic variables, involve complex business processes, and can be subject to multiple disruptions. They can also be addressed with near-infinite potential interventions, each with their own resulting actions.

And this is why predictive digital twins add huge value.

Predictive simulation lets you test your assumptions and avoid costly consequences

We’re seeing lots of businesses draw up best, medium and worst-case scenarios as part of their resilience planning, but that approach only works if assumptions are correct.

Applying “what-if” scenarios to dynamic models of your business processes allows you to stress-test your business’ resilience against multiple internal and external variables. 

You’re developing a ‘predictive twin’ of your business, that can simulate numerous potential scenarios and bring invaluable foresight to your strategic “what-if” questions via comprehensive KPI analytics.

Right now, as a result of COVID-19, approximately 25% of manufacturers are fast-tracking automation programmes to address issues associated with staff shortages.

A predictive digital twin allows you to experiment with different investment options and resilience plans in a risk-free way – getting it right in a virtual pilot before rolling out the solution in your business.

This significantly mitigates risks associated with important business decisions, and gives business owners the confidence to make critical decisions using trusted, informed facts as to the likely outcome of each course of action.

Predictive digital twins are as close to a crystal ball as you can get

With a predictive digital twin of your business processes, you can run any scenario and pre-test your business’ ability to respond to the variability, volatility and uncertainty that most organisations are experiencing in these unprecedented times.

This removes the risk associated with important operational and strategic “what-if” scenarios, and identifies how resilient your business would actually be under any potential future condition.

In short, it arms you with both the insight and foresight required to make confident and future-proofed decisions about the resilience risks your business currently faces.

Do you want to know more about how predictive simulation and digital twins can help support your business resilience planning? Watch the recording of our webinar 'Strategically Planning for the Future: Developing Resilient, Agile Processes Using Predictive Digital Twins'.

The webinar showcases the critical role predictive digital twins should play when making strategic business decisions.

Watch the recording