Per Ready.gov, Experience gained during exercises was the best way to prepare teams to respond effectively to an emergency.
Practicing emergency response plans by enacting a hypothetical situation allows one to have a more realistic view of how what you need to have happen is weighed against what might actually happen.
How Planning / Training Scales with Capability
The expectation of the exercise is to practice, not to find fault. After an exercise, the participants review what went well, what needs improvement, and eventually, will provide a detailed After-Action Report as well as an Improvement Plan. These documents are very important to record findings, improve plans, and can help meet grant and award requirements.