What-If Scenario Analysis in 2021 and Beyond
Martin Pahulje - April 29, 2021
In the past year, we have gotten accustomed to facing the unexpected. As we continue to adjust to the new normal, companies are looking to minimize the uncertainties of their business operations. Planning has always been a significant component of supply chain operations, but many companies are slow to optimize it. Rather than simply reacting to changes and struggling to recover, the time has come to be proactive. In order to predict scenarios and become more prepared for the unexpected, many organizations are looking to implement what-if scenario planning. This solution helps companies identify specific sets of uncertainties and make predictions about how they may impact business. With scenario analysis, you can optimize your planning process to make more informed decisions for both present and future business practices. Creating scenarios as a whole is not a particularly new concept. Still, we will discuss how you can optimize this practice to revolutionize planning in your company using innovative technology.
Scenarios Help to Make the Right Decision
It’s important to understand that you will only get as much out of scenario analysis as you put in. This solution cannot provide you with accurate and educated predictions without knowing which data you need. First and foremost, you should have critical questions in mind. Regardless of what you would like to predict, you must ask the right questions in order to obtain the desired results. You don't necessarily need a complete data set at this point, but you will later on, so we’ll help you get there.
This process includes a lot of brainstorming and free-thinking. As a result, it provided you with a lengthy and in-depth list of all the factors influencing your company’s operations. With that complete, it is now time to collect all of these lists into one. Rank your known factors, key trends, and driving forces from most important to least important. How you score and rank these items is up to your discretion, whether it be sorted by probability, possibility, or any other criteria. Once rank, decide which two have the most significant impact. These will become the axes of a 2x2 matric upon which you craft four scenarios. Now you will develop probable futures or scenarios. While it may be easier to have one individual do the writing, it is helpful to receive input from the group. A beneficial practice to this is having each team member write a brief scenario, perhaps just one sentence, and then combine them.
Now for the fun part. With your scenarios outlined, you can begin to debate or discuss business strategies fit to handle these scenarios. The goal of this step is to pick out the flaws in your plans. With each flaw identified, you can revise the plan and ultimately build a strengthened strategy and plan to handle each scenario. Following this, you can continue developing strategies to guide you and your organization to face potential disruptions. While this may not provide you with a fool-proof solution, after all, you can never completely prepare for the unexpected, but it will make you more equipped to handle uncertainty in the future.
Scenario planning can be an extremely helpful business practice. By walking through potential scenarios, you are better preparing your company to face the unexpected. This will help you develop problem-solving skills and strengthen your business operations in the face of uncertainty. But as we said, these are only scenarios, and there is no real way to test how your strategies will hold up or if these scenarios will even occur – until now.
Preparing potential decisions is beneficial, but nothing is better than the right decision. flexis has developed a technology that enables the simulation of business scenarios. The What-If analysis allows users to weigh up advantages and disadvantages by comparing various potential solutions. Furthermore, the technology offers parallel access capabilities, ensuring that the scenarios can be accessed by multiple users from different departments and organizations. This will enable collaboration within the technology, ensuring that data can be shared and viewed with ease.
Ultimately, the What-If analysis allows for you to test the comprehensive alternatives and consequences developed. All influences, feedback, and reactions to process flows such as bottlenecks that you have identified will be reflected in the system, ensuring an accurate representation of scenarios and their impact. Additionally, plan changes are based on the latest data status, and their effects are calculated immediately for complete transparency. This ensures that the consequences of occurring events such as delayed deliveries can be predicted, giving you the maximum amount of notice for you to adjust operations quickly. To customize this technology further, you can change parameters and create different rule models and simulated scenarios. This will provide you with the exact scenario you want while testing different versions of it. Through simulating alternatives, you can determine the best course of action for each potential scenario to guarantee minimized damage and maximized success.
Thanks to flexis' technology, you will achieve full transparency of any business scenario you could imagine. With complete user control, the What-If analysis is entirely customizable, so you can mold it to fit your needs to provide the information that will lead you to success. This is the ideal decision-making tool for companies looking for resilience and efficiency. Planning for the unexpected will equip you to react and recover from disruptions and market changes faster than ever before. With better insight into your company and the industry, you can make quicker and more accurate decisions that will allow you to optimize your business operations. An efficient supply chain is one with complete visibility and transparency, and this can be achieved through optimized planning technology. We are handing you the key to smarter decision-making – now it's time to use it.
Click below to download our guide on multidimensional monitoring.