Transparent cause-effect chains
The Digital Factory Division of Siemens AG, together with Valsight, has made fundamental changes to the planning process. By implementing Valsight, the Siemens Digital Factory Division has significantly simplified the planning process and eliminated unnecessary iterations. The driver-based planning approach enables effective resource allocation and efficient, cross-divisional planning in which new scenarios are flexibly created and discussed.
Lack of transparency on division-wide impact of measures
The Digital Factory Division is Siemens’ fourth-largest division, with more than €10 billion in revenue and more than 45,000 employees. It offers companies from all over the world a comprehensive product portfolio and system solutions as well as lifecycle-related and data-based services to increase the efficiency, flexibility and quality of their manufacturing processes.
The Group’s planning covers a five-year horizon with an increased focus on the coming budget year. Within the division, all business units are responsible for preparing their own individual plans. In most cases, planning has so far been carried out in tables with individual logic, so that at an aggregated level the relationship between plan premises and plan figures was not transparent and could only be checked with great effort. Accordingly, the continuous adjustment of premises was later complex. Moreover, thinking in scenarios was hardly possible due to the risk of inconsistencies and rigid individual plans. In order to make investment decisions on planned measures in the sense of an effective allocation of resources, there was a lack of transparency regarding the division-wide effects.
Top-down planning approach with driver-based simulations of scenarios
With its financial planning solution, Valsight provides a value-driver-based simulation tool that enables the central specification of plan assumptions and targets and thus offers a comprehensible, consistent and transparent basis for decision-making throughout the division.
By means of specific driver models for each business area, an update is defined from an imported ACTUAL record point with central drivers, so that complete plans can be calculated by updating individual drivers. All business units use the uniformly defined logic and centrally specified planning assumptions for the drivers to define measures and scenarios. These can be aggregated into an overall plan using the division hierarchy. A predefined structure of a base scenario as well as ongoing and new measures enables division-wide transparency and traceability of assumptions and effects.
With the introduction of a value-driver-based planning approach supported by Valsight, we are pursuing the goal of increasing transparency about the cause-and-effect chains of factors influencing our planning and ensuring optimal resource allocation. The division-wide change in our planning approach to a driver-based top-down simulation of plan scenarios requires a change in thinking and culture within the organization. The implementation of Valsight is an important milestone for us in this transformation process.
More efficient planning and effective resource allocation through scenario modeling and action orientation
By implementing Valsight, the Siemens Digital Factory Division aims to significantly simplify the planning process and save unnecessary iterations and extra work.
The driver-based planning approach enables efficient, cross-divisional planning and effective resource allocation, in which new scenarios are flexibly created and discussed. Valsight was implemented at Siemens as a pilot project in 2016/2017. The experience gained in this process will be used in the second year of operation to revise the model and specify further requirements in order to ultimately achieve the desired transformation step by step.