Investment in processes, people and technology is a key driver for business growth. But how can you be sure that investment will have the desired impact, or if there are better options for growth?
Simulation is a powerful decision-making tool for assessing the feasibility and validity of capital investment projects - before investing time and money.
With global competition, evolving technology and more consumer choice than ever, remaining competitive is more important than ever for organizations.
Capital investment plays a key role in helping organizations to maintain a competitive edge. By investing in processes, technology and people, businesses can generate higher demand, capitalize on new opportunities and deliver better customer experiences.
But with so many factors and risks to consider, deciding where and how to invest and assessing the potential return can be a daunting task.
Major investments will have an impact over a long time span, influencing a company’s future growth. But with uncertainty around the future, it can be difficult to predict the likely return of investment projects.
Investments like constructing a new manufacturing plant or expanding a hospital ward will carry high financial risks. Decisions to invest in fixed assets like these will also require large ongoing running cost commitment.
When putting a business case for investment together, effectively communicating the benefits of proposals to stakeholders through in spreadsheets or presentations alone can be challenging.
SIMUL8 enables organizations to make confident, evidence-based investment decisions.
Determining the ROI of a process improvement project can be an arduous task. You need to consider a wide range of complex factors such seasonal variation and changes in demand, or the expected influences to a system from events like staffing changes or the introduction of new equipment.
SIMUL8 includes a range of features that specifically focus on the financial results of your process. Taking into account factors such as the expense of capital equipment, individual staffing rates or the return generated per work item, SIMUL8 can generate an accurate breakdown of the costs and revenue potential for any given scenario.
This provides insight to make stronger, informed decisions for evaluating the benefits of investment and reinforces stakeholder confidence in the ability to deliver a successful project.
With simulation, you can run 2, 10 or even 100 years into the future of your project in seconds. This provides insight to make stronger, confident investment decisions now - instead of when it could be too late to change the outcome.
Other approaches to planning capital expenditure projects could miss unforeseen risks, costs or impacts on other aspects of your business. Simulation helps highlight issues like these ahead of implementation.
Other analysis tools, such as spreadsheets, can effectively model static scenarios but how can you assess the potential impact of variability – like changing customer demand or socioeconomic factors – on investment projects?
Only simulation is capable of incorporating the randomness and variability that occurs in real-world systems, allowing you to fully stress-test their impact on investment projects.
Experimenting in the real world carries a range of risks. As well as capital expenditure, like hiring new staff or purchasing new equipment, there are also risks associated with the consequences of these decisions.
Using simulation, financial cost metrics such as capital, usage costs per station or labor costs can be tracked and the affordability of investment options can be thoroughly assessed.