Computer Simulation and Decision Making

by John Ma, CIRAS

What is computer simulation and modeling? What can it do for you? Why should you be concerned about it? Before answering these questions, let's examine recent CIRAS cases.

Case 1- The local division of a large tool manufacturer was charged by the home office with reducing their production planning cycle from 21 to 5 days. The plant's manager and engineers developed a solution that involved establishing a new inventory reordering system. However, they were unsure how to set up reorder points and quantities given uncertain product demand and varying lead times.

Case 2 - A major agricultural equipment manufacturer was exploring the feasibility of reengineering their machine shop operation. They wanted to compare the potential benefits of two different strategies.

Case 3 - A wood processing company was considering various plant layout schemes. They needed to know the impact on production capacity and the capital expenditure pay back period for each scheme.

Case 4 - A start up food processing company was preparing a feasibility study for investors who desired a confidence level prior to their committing to the investment.

Case 5 - Another agricultural equipment manufacturer wanted to implement a new material handling system to improve shop floor productivity and space utilization. They needed to create alternatives and evaluate them.

These companies differed in size and kinds of products produced. They faced different challenges and the economic impact of their actions ranged from several thousand to several millions of dollars. However, they did have something in common. Each was required to evaluate alternative solutions in the face of various uncertainties. If you are a manager, an executive, or a business owner in manufacturing, you can undoubtedly appreciate the difficulty experienced in answering these questions. Fortunately, by employing today's computer simulation studies, these firms were able to increase the odds of making better decisions.

The term computer simulation here means a technology that can be used to model the operational behavior of a system such as a manufacturing facility, production process, or service station. Based on the nature of the system, a model can be static or dynamic (influenced by time); deterministic or stochastic (involving randomness), discrete or continuous. Today, simulation is one of the most frequently used system analysis methods. Supported by today's powerful desktop computers and software, it is becoming the tool of choice for evaluating manufacturing systems performance. The benefits offered by this technology include:

accounts for complex factors and relationships
shows performance changes over time dynamically
permits experiments; answers "what if" questions
evaluates changes without disrupting the actual system
stimulates ideas and promotes total system optimization
uses animation for "realistic" representation
provides cost-effective ways to develop and evaluate system designs

As indicated in the CIRAS cases, computer simulation and modeling of manufacturing systems can be used in:

manufacturing process design and improvement
plant layout and material handling
inventory control and production scheduling
job shops
assembly and transfer lines
JIT, kanbans and cellular manufacturing scheduling
risk analysis and financial planning

CIRAS has used this technology to assist companies with various needs, and all have enjoyed benefits. CIRAS can offer:

Education and training. CIRAS can expose your company to the application of this simulation technology in a userfriendly setting.

Hands-on experience. Experienced CIRAS specialists can help build your first model using state-of-the-art technology to solve a real problem.

Tool selection. If you decide to retain the technology in house, CIRAS will evaluate the software tools currently on the market.

Benefits

"In short, the whole process of computer simulation from data entry to model construction and operation adds increased degrees of confidence in the received from new systems, and identifies potential problems before they become real problems."

--Dave Sly, Founder and President of CIMTECHNOLOGIES

"Computer simulation allowed us to develop and test the new concepts for plant layout and material handling before putting it into place. The animation helped our people better visualize and understand :the charges that would take place in a new system."

--John Annin, President of Parker Industries

Making sound systems decisions requires a thorough understanding of the system involved. Computer simulation and modeling can help you understand your system and serve as planning tools to help you manage it. It is to your advantage to use simulation to make decisions about your system. If you want to explore simulation technology, please give any of the following CIRAS specialists a call.

Mike Willett 319-296-4025
Merle Pochop 712-274-0048
(Dan Meyer, John Stapley, Dorothy Lueck and John Ma are no longer with CIRAS)

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