Simulation-Based Complexity Management


Complexity is the defining signature of today's world - and it will continue to increase. Complexity and volatility are constant companions of decision makers in business and politics, they are found in all major areas of life and determine the most pressing questions about the relationships, the networks and the dynamics - both in the areas of environment, ecology and technology, with its large-scale systems as well as in economics, politics, society and information technology. The challenges that we face in successful management of change in business and politics must require a change in awareness of major proportion. Concerning the potential of the accompanying new mind-set, holistic thinking, the quantum physicist and complexity researcher Heinz Pagels has made the following prediction: „I am convinced that the nations and people who master the new sciences of complexity will become the economic, cultural, and political superpowers of the next century.“

Therefore, a new level of complexity in business requires a complete new perception of the world. SAT Strategic Advisors for Transformation GmbH has developed a methodology at the holistic level that allows optimization and decision support in an even more unprecedented degree of coverage along the entire value chain. Our methodology of Simulation-based Complexity Management integrates advanced simulation and optimization methods for the integrated modeling and optimization of all types of complex-dynamic systems, whether they be global value networks, health systems or energy-relevant coupling between economy and ecology.

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With our methodology, Simulation-based Complexity Management, it is possible to integrate, for example, market and strategy models (with System Dynamics and Agent-based Simulation) with the factory and global supply chain level (Process Simulation), which also can be optimized with focus on minimizing the variable cost, or maximizing the profit (Local Search, Mathematical Programming, etc.).

Typical application areas for Simulation- based Complexity Management

Today, typical application areas for Simulation-based Complexity Management include, for example:

  • Comprehensive Strategic Planning
  • Risk Management for Finance and Insurance
  • Cost modeling and cash flow optimization
  • Major project planning and innovation planning
  • Supply chain optimization at the national, international and global level with the objective function of maximizing the overall contribution margin (Which product should be produced where to maximise profit?)
  • Portfolio and Asset Optimization
  • Network optimization for renewable energies
  • Market modeling and evaluation of alternative strategies including competitor and customer behavior

Advantages of Management Flight Simulators

Simulation models that are based on the methodology of Simulation-based Complexity Management have the following advantages for Executive Management in dynamic future markets:

  • Holistic capture and transparent presentation of highly complex decision situations in the strategy area
  • Avoidance of tacit misunderstandings by disclosing the different perceptions of different decision-makers
  • Development and simulation of business scenarios, customers and competitors to make uncertainty about the future tangible
  • Identification of the levers for value-enhancing corporate governance in the face of high uncertainty and risks
  • Modeling of alternative strategies and testing by simulation before they are implemented in the business
  • Evaluation of sustainable and robust business strategies in the context of new products and innovation, and in global competitive situations
  • Implementation of early-warning systems to monitor market changes, market position, strategic decisions and operational actions in real time
  • Comprehensive business and earnings management, based on the current most powerful simulation and optimization methods
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