INNOVATIONS IN SIMULATION
As the 19th century drew to a close, the Irish playwright Oscar Wilde wrote that to expect the unexpected is the sign of a thoroughly modern intellect. Now in the 21st century, executives in all industries are challenged to not only expect the unexpected but also make the right decisions and set the right strategies to succeed in an uncertain future.
Increasingly these executives are turning to technology for help. Decision Intelligence tools are proving popular – and with good reason. These tools allow executives to design, model, align, execute, monitor, and tune decision models and processes even in the most complex and unpredictable environments. A revolution is afoot and investments in Decision Intelligence help shore up predictive analytics efforts, introduce a prescriptive simulation capacity, and empower executives to make optimal operational, tactical, and strategic decisions.
Decision intelligence is a game-changing technology that’s quickly gaining a foothold as traditional decision management tools struggle to achieve resilience amid the challenges of a global pandemic. Industry analysts at Gartner have identified Decision Intelligence as one of the Top Strategic Technology Trends for 2022 that shape the future of digital business. Gartner expects that by 2023 more than a third of large organizations will have analysts practicing decision intelligence, including the sort of decision modeling that is essential to gaining a competitive edge.
Decision Intelligence tools help executives achieve the three things they say they value most: growth, digitalization, and efficiency. Essential to advancing on each of these aspects is the capability to understand the impact of a decision on the trajectory of the business. The challenge, of course, is how to be sure what that impact will be in a dynamic market and an unknown future point in time and how to make the optimal decisions in complex environments.
To respond to these challenges effectively requires the capacity to do three things that have never been done concurrently before: to learn from the past; to understand the present; and to be able to forecast and gain visibility on unlimited future possibilities. And while the technologies underlying Decision Intelligence tools might be familiar, it is in their combination and convergence that their power is unleashed. Data-driven Artificial intelligence (AI) such as machine learning (ML) solutions are combined with decision models and complex simulation capabilities to deliver Prescriptive Simulation Twins. These twins power hundreds and thousands of simulations that generate data (sometimes called synthetic data) to forecast actions that have never happened before, that are in turn ingested by AI tools, optimization algorithms and used to train ML algorithms. The resulting hybrid solutions can reconcile the different views needed for decision-making to meet the multiplication of often contradictory constraints, allow executives to project the evolution of complex and dynamic systems, and be synchronized in real-time.
This is a fundamental revolution in decision-making at every level of an organization. Decision Intelligence solutions are already powering logistics companies as they manage complex transportation networks. They are helping supply chain managers make the right planning choices, energy companies to optimize their short-term operations and long-term strategies, and helping manufacturers to lift their efficiency and productivity by making the right decisions. These technologies are creating enormous value for the organizations that are riding this revolutionary wave – and there’s plenty more to come.
When Data-driven AI, modeling, and simulation converge in Decision Intelligence tools, the impacts on enterprise can be significant and rapid. One US transportation and logistics company harnessed a Decision Intelligence tool to solve a complex routing and shipping challenge. The software provided an optimized solution for 1,500 orders, 800 tankers, and 500 drivers with a five-day rolling horizon in less than 10 minutes—a problem space that contains more than 1 billion feasible assignment scenarios. The business was able to save millions in wasted driving miles, improve their driver retention, and generate millions more in revenue by optimally deploying their resources.
A European automotive manufacturer faced a complex challenge of their own. They sought to evade factory bottlenecks and meet shifting demand and production capacity to maximize the production of the different engines that the factory-made. The company harnessed a Prescriptive Simulation Twin that could consider all these constraints as well as others including lead times, machine cycle times, and storage capacity. Thanks to this investment, the automaker was able to significantly increase the number of engines they manufactured, lift production line efficiency, respond to volatile demand curves, and all within a single quarter.
Decision Intelligence transforms industries as varied as retail, healthcare, financial services, and transportation. Executives appreciate not only the capacity to test operational and tactical decisions using predictive analytics tools but generate prescriptive plans across any time scale – the next hour, the next month, the next year, or the next decade – that position them perfectly to achieve their goals in uncertain times.
With Decision Intelligence solutions to guide their choices, executives are perfectly placed to achieve the goals they’ve set for their organizations. They’ll adopt the holistic vision that these investments in new technology offer and take decisions with renewed confidence. Though markets will continue to shift, supply and demand will remain volatile, and uncertainty persists, choosing the right operational, tactical, and strategic options is not only possible but standard.
The combination of Data-driven AI, modeling, and complex simulation delivers a truly reliable vision of the future, one that can be leveraged for productivity gains, efficiency improvements, and value generation. It’s less about expecting the unexpected and more about accurately forecasting the unexpected, positioning resources to respond in advance, and emerging on the other side resilient, robust, and ready for whatever comes next. Finally, there is a way to achieve a clear path forward through an uncertain and often chaotic future.