"Simulation may provide a window into the future that may permit you the opportunity to reduce your risk and better protect your capital investments"

What exactly is simulation!

A computer simulation is a numeric representation of a portion of a business process . . . which collates specific time periods, space constraints, and the procedural aspects by which people carry out their work assignments.

A simulation may or may not include a graphic representation of a process. 

A simulation becomes a tool by which management improves the process level of performance, individual throughput, and profitability . . . without risking the ongoing performance of an existing operation.  

Effective simulations must include operational variabilitys normally present in any business process:

• Minimum & maximum rates
• Number of employees assigned by task
• Peak times
• Peak duration
• Software response times 
• Seasonality
• Capacity of areas assigned for queues
• Facility constraints

What do you need to consider when contemplating simulation?

Whenever we propose changes, we must fully understand exactly what the impact will be to the upstream and downstream portions of our process.  Then we need to consider: 

• What types of simulation packages are available? 
• How expensive are the different packages? 
• Are they complicated? 
• How sophisticated do you need to be?
• Will your people use the tool? 
•  Can you recover the cost to purchase the package and train you people how to use the software? 

You need to establish your program objectives!

What do you want to prove and who do you need to prove it to?

Ask yourself these questions: 

• How complex is your project?
• Will the simulation need to be a “near graphic   representation” or a written recap of captured data?
• How will the results be utilized?
• What is the target project’s risk potential?

Ask yourself if: 

• . . . your project is complex
• . . . the simulation needs to be a “near graphic representation”
• . . . the results will be utilized to determine the “absolute” viability of a project
• . . . the project has a high risk potential

If your answer is yes to to the above you need to determine if you :

• can do the simulation in-house or, should subcontract the simulation responsibility to an expert 

Frankly, most companies do not have the very expensive software nor the experienced personnel required to perform a complex computer simulation, especially for their first simulation project.   In this instance most companies will hire an outside consultant to prepare and deliver a completed simulation.

But, if your project: 

• is not complex
• does not need be a “near graphic representation”
• is structured to where the results will not be the only criteria utilized to validate a design
• is of minimal risk potential

Then you will need to determine: 

• if you have the resources to do the project in house
• what kind of software will be appropriate for the type of simulation you need to perform
• what kind of training will your people need
• how much time will be required for the training
• the long range benefits 

What do you need to consider to determine if you can do the simulation In-house?

• What types of packages are available? 
  • Whether or not you choose to do the the simulation in house, knowing which package is most suitable for your requirements is very important.
• What do they cost? 
  • Some packages start at about $500.00US and range to approximately $100,000US.  Yon need to define what you really need and what modules are "must" haves. 
• Are they complicated?
  • While there are many types of simulation software packages available in many, but not all instances, the learning curves can be rather steep.  
  • Choosing the right package is an important decision.  
• Can your people be properly trained? 
  • Find out what training is available and determine who you will send.  
  • Some vendors will actually train your people using one of your target projects.  
• Do you have the people and the time?
  • Plan the basis for your simulation project and determine in advance  what experiments will need to be run to determine the viability of your test project.  
  • You will need a substantial amount of time to identify and gather reliable critical data.  
  • You should anticipate your need far enough in advance to have your people trained on the software package you choose.

Making your decision!

Prior to the introduction of more cost-effective packages, simulation was not considered a cost- effective “design” tool!

• Learning curves were very steep!
• Preparation was time consuming!
• Modest packages were well over $50,000! 
• Special computers were necessary! 

Today developing in-house computer simulation capabilities may be viewed as a long term investment.  Computer simulation can be used to demonstrate the positive and negative effects of proposed changes so it is viewed as an investment that can help you avoid costly errors in the future.

What advantage does  developing in-house simulation capability provide my company?

IN our opinion, the advantages are many.  

• The disciplines learned in utilizing simulation helps focus attention on the element of time. 
• Simulation forces you to dissect a process which creates a better understanding of the interdependencies within a process. 
• Acquiring good data forces you to analyze how the data was generated and thereby create the opportunity to better understand the cause and effects relationship of sometimes subtle interdependencies. 
• Simulation provides a strong foundation to better understand your process. 
• Understanding interdependencies enables you to pinpoint productivity and throughput constraints.  
• You soon develop the high level view necessary to critically assess your operation and identify areas requiring improvement.   
• You may target specific areas for improvement and “virtually test” alternative improvement plans prior to presentation to management.  
• Should you ever require a major simulation effort, you would be better prepared to direct and support the efforts of the vendor. 
• Your knowledge and In-house simulation experience could significantly reduce the cost of generating an effective simulation effort utilizing an outside resource.  

Our Experience

If you know the proposed process changes will not work there is no need to go through the effort or expense to simulate something that will not perform as needed. 

If you know the proposed changes will work, there is no need to go through the effort or expense to simulate something that will perform as needed. 

But, if the project is not economically viable, perhaps due to "built in" contingencies or over-design, developing a simulation geared toward "leaning out" the need for expensive accumulation buffers, higher speed equipment, and floor space may give your team the tools and confidence to be able to recommend a "lean and agile" solution.