Chapter 4: Simulation

As companies continue to look for more efficient ways to run their businesses, improve work flow, and increase profits, they increasingly turn to simulation, which is used by best-in-class operations to improve their processes, achieve their goals, and gain a competitive edge. Simulation is used by some of the world's most successful companies, including Ford, Toyota, Honda, DaimlerChrysler, Volkswagen, Boeing, Delphi Automotive Systems, Dell Corp. Gorton Fish Co., and many others. Both design and process simulations have become increasingly important and integral tools as businesses look for ways to strip non-value-adding steps from their processes and maximize human and equipment effectiveness, all parts of the six sigma philosophy. The beauty of simulation is that, while it complements and aids in the six sigma initiative, it can also stand alone to improve business processes.

In this chapter, we do not dwell on the mathematical justification of simulation; rather, we attempt to explain the process and identify some of the key characteristics in any simulation. Part of the reason we do not elaborate on the mathematical formulas is the fact that in the real world, simulations are conducted via computers. Also, readers who are interested in the theoretical concepts of simulation can refer to the selected bibliography found both at the end of the chapter and at the end of this volume.

WHAT IS SIMULATION?

Simulation is a technology that allows the analysis of complex systems through statistically valid means. Through a software interface, the user creates a computerized version of a design or a process, otherwise known as a "model." The model construction is a basic flow chart with great additional capabilities. It is the interface a company uses to build a model of its business process.

Simulation technology has been around for a generation or more, with early developments mostly in the area of programming languages. In the last 10 to 15 years , a number of off-the-shelf software packages have become available. More recently, these tools have been simplified to the point that your average business manager with no industrial engineering skills can effectively employ this technology without requiring expert assistance. (Some companies have actually modified the commercial versions to adopt them into their own environments.)

Simplicity is the key to today's simulation software. The basic simulation structure is as follows : after flow charting the process, the user inputs information about how the process operates by simply filling in blanks. While completing a model, the user answers three questions at each step of the process: how long does the step take, how often does it happen, and who is involved? After the model is built and verified , it can be manipulated to do two critical things: analyze current operations to identify problem areas and test various ideas for improvement.

The latest improvements in simulation software have made it an excellent tool for enhancing the design for six sigma (DFSS) process, which strives to eliminate eight wastes: overproduction, motion, inventory, waiting, transportation, defects, underutilized people, and extra processing. DFSS targets non-value-added activities ” the same activities that contribute to poor product quality.

In this chapter we are not going to discuss commercial packages; rather we are going to introduce three methodologies that facilitate simulation ” Monte Carlo, Finite Element analysis, and Excel's Solver approach.