The Power of “What-If”
We recently had one of our customers share on the iGrafx Linkedin Group their success achieving process improvements through the use of iGrafx simulation. They successfully conducted a What-If analysis, made the real world changes, and found that the new process performance in reality was within 6% of what their What-If analysis had predicted. They achieved a 65% cycle time improvement with their project and were pleased enough with the results to want to share them. They should be proud as these are impressive and impactful results.
This prompted me to want to highlight the benefit of “What-If” analysis made possible with iGrafx simulation capabilities. Although many of our customers have applied these capabilities and obtained great results, many others don’t take advantage as much as they could of this iGrafx capability.
iGrafx offers one of the most robust simulation capabilities on the market, packaged for general business users, yet powerful enough to meet the needs of experts. This technology has been built in-house since the very genesis of the iGrafx offerings and represents one of the few native business process simulation offerings on the market. This tight integration of native capabilities enables iGrafx to offer unique capabilities to our customers.
These powerful What-if analysis capabilities of iGrafx simulation provides 3 primary benefits to our customers:
- The ability to get quantifiable feedback on possible process designs with minimal effort and time. This enables our customers to quickly try various designs without the risks, costs and time associated with actually implementing the designs in the real world. This enables the ability to explore more possibilities and more radical and impactful options.
- The use of what-if to perform sensitivity analysis in order to identify and prioritize areas for improvement. Oftentimes, customers can have a predetermined idea for how to go about improving a process. Other times, they may have no idea where to start. By using simulation to test the possible impact of changes, existing ideas can be verified and new ideas can be identified. For example, in an existing process which involves 3 departments A, B, and C, the common wisdom might be that department B is the best area to target to optimize the process. Using simulation, this hypothesis can be quickly validated or invalidated. It is not uncommon for the common wisdom to be wrong. If it turns out that 80% of the cycle time is spent in department A, 5% in department B, and 15% in department C and the goal is to achieve a 20% improvement, then optimizing the process only in department B is not going to get the desired result. This kind of framing of reality can quickly be tested with sensitivity analysis through top down model decomposition in the course of developing a What-If model.
- A great communications tool. The presentation of quantifiable information regarding existing process performance and performance of proposed processes can be used much like a spreadsheet to present, convince, and ease the decision making and implementation of process changes. The visual presentation and step-by-step walk through of processes can be a useful training tool when introducing new processes, and equally valuable as a knowledge extraction and verification tool when working with subject matter experts and process owners/participants.
An important point I would stress to anyone looking to apply simulation for What-If analysis is to not get overly detailed with the modeling to begin with. Use a top down approach and model with layers of decomposition. This will enable a very quick start to What-If analysis and can help guide where to put more detail into the models. Referring back to the departments A, B, and C mentioned above, it would be a waste of time to spend effort mapping department B in detail since it is an insignificant component of the overall process at this time, particularly in the context of the 20% improvement goal identified above. So if you find yourself really getting into the fine details of a process make sure it makes a difference to the analysis you want to perform, and the end goal you want to achieve.
Just as almost everyone in business periodically uses a spreadsheet to better understand, quantify, and communicate results, almost everyone in business should periodically use simulation of a process model when doing the same with business processes. One of the most challenging parts of effective process improvement is the change management associated with migrating the people involved with the current process to the new process. Being able to show quantifiable times and costs, along with a visual representation of how the new process would work, is a very powerful tool to help manage that change.
Happy simulating, and let us know about your successes or if you need help achieving them.