Paragon Simulation Business

Breaking the curse of silo thinking

Neil Higton

I don’t really look at it is an achievement. We’ve survived three recessions – is that really an achievement though? As the name suggests, we build and use simulations of business processes. They’re used to support critical decisions about how to improve business performance. We do this on a consultancy basis and we’ve been involved with some top-companies. Frequently we find that simulation reveals the unexpected.

Our first assignment in the nuclear waste sector was many years ago. We were asked to evaluate the design of a plant that was about to go live. The critical aspect of any nuclear waste plant is that once the ‘big green button’ is pressed, the plant is contaminated and so it’s extremely difficult to modify the process. There are very few second chances.

To our horror, the simulation revealed that the plant would only achieve 10% of its required throughput. We thought we had made some fundamental mistake. After days of reviewing our work and head scratching we stumbled on the idea of running each area of the plant in isolation. There were nine areas to the plant. The remarkable discovery was that each area of the plant performed perfectly. It was when the different areas were “joined together” that the design failed. We realised that the engineering design function was also split into nine teams – can you see what’s coming next?

We had around 70-engineers at our presentation workshop. We decided to deliver the bad news by walking through each plant area as simulated. Each engineering team agreed that their area was simulated accurately. And of course there was some pride that each area performed well in isolation. Then we had to drop the bombshell and explain the predicted throughput rate of the whole plant. It was a jaw-dropping moment.

The simulation analysis was cross-examined and it stood up and to the credit of the engineering team the conclusions were accepted. The simulation was then used to understand what needed to change before the plant went live. The changes were expensive but only a small fraction of what the cost would have been if the unmodified plant went live.

The concept of “joined up thinking” and the curse of “silo thinking” are both now as old as the hills but sadly the curse lingers. We love to use simulation to break that curse! In this case it was rewarding because it saved the country in question hundreds of millions.