The pandemic’s impact on our economy is just the latest in a long series of shocks. In our globalized and hyperconnected world, the cascading effects of unforeseen events of all kinds will impact us more and more frequently and only the most adaptable actors will survive.
Resilience, robustness, scenarios, systemic approaches–these terms will become commonplace as we fight to deal with an explosion of complexity. Mastering this complexity is an absolute necessity in order to effectively and consistently anticipate and adapt, especially since it can also be a source of immense opportunity for value creation.
The good news is that the tools exist to address these challenges. But it is vital that we don’t delay the implementation at scale of the digital transformation so often discussed. Only this will allow companies to adapt to this complexity and emerge from this crisis both alive and strengthened.
This issue has been particularly evident in industries which have been hit hard by the health crisis.
To keep operations in line with increasingly volatile demand, adapt quickly to disruptions, and reduce costs, it is essential to take into account the entire industrial system, to understand all its interactions, and to measure the cascading impacts associated with decisions and uncertainties.
Without this holistic approach to the complexity of the organization in its environment, the most effective action plan for productivity will remain vulnerable to future disruptions and changes. The need for technology to help with these decisions is now obvious.
Within weeks of the pandemic lockdowns, radical organizational realignments were made. Today, though, it is a matter of anticipating recovery scenarios and increasing the resilience of the supply chain, thus increasing the number of parameters to be processed. And tomorrow, we will have to find new productivity gains while ensuring sustainability, robustness and always reducing spending.
It might appear as impossible as squaring of the circle, but the technological solutions are there and we just have to agree to deploy them quickly to realize the concrete benefits as quickly as possible.
Predictive applications of Artificial Intelligence and the Internet of Things (IoT) may be a first recourse for industry, but they alone do not meet this challenge of complexity.
Indeed, these technologies rely solely on data from the past to determine correlations and predict the future. But a correlation is not cause, and this historical data does not allow us to anticipate situations that have never occurred before or to anticipate the cascading effects of totally new events, as the COVID-19 crisis serves to remind us.
As a result, important parts of a company’s value chain are never analyzed, and the impacts of hazard cannot be quantified. This limited vision is an existential threat in a world where uncertainty is the norm.
The only way to manage this complexity, not only to protect against its negative effects but also to extract its hidden value, is to adopt 360° simulation tools. This, in turn, requires relying on advanced modeling tools and pairing them to the best of IoT and Artificial Intelligence.
In addition to assessing historical data and associated analyses, these models incorporate the knowledge of experts to determine the interdependencies and causal relationships between the elements of the simulated system, however heterogeneous they may be. Machines, processes, people, financial or risk constraints–all can be modeled and simulated with these advanced tools.
The model generated is an advanced digital twin of the company. It simulates the impact of any decision on the operation and evolution of the system. Coupled with optimization algorithms, it can provide reliable action plans to achieve targeted results while remaining robust to unforeseen disruptions.
These tools give decision makers next-generation analytical capabilities that are both predictive and prescriptive, specialized and holistic.
To decide effectively in a complex world requires a convergence between these technologies. They are ready and it is possible to put them together.
We are living in a groundswell of change that many companies will not survive. Those that will escape will be those who have adapted to this new world of permanent uncertainty. Only the convergence between Artificial Intelligence, IoT and simulation will allow us to cope with this complexity and emerge stronger.
It needs to be implemented–and now.