Archive for the ‘General’ Category

Simulationist Bill of Rights

Saturday, February 27th, 2010

In the Simulation Stakeholder Bill of Rights I proposed some reasonable expectations that a consumer of a simulation project might have. But this is not a one-way street. The modeler or simulationist should have some reasonable expectations as well.

1. Clear objectives – A simulationist can help stakeholders discover and refine their objectives, but clearly the stakeholders must agree on project objectives. The primary objectives must remain solid throughout the project.
2. Stakeholder Participation – Adequate access and cooperation must be provided by the people who know the system both in the early phases and throughout the project. Stakeholders will need to be involved periodically to assess progress and resolve outstanding issues.
3. Timely Data – The functional specification should describe what data will be required, when it will be delivered and by whom. Late, missing, or poor quality data can have a dramatic impact on a project.
4. Management Support – The simulationist’s manager should support the project as needed not only in issues like tools and training discussed below, but also in shielding the simulationist from energy sapping politics and bureaucracy.
5. Cost of Agility – If stakeholders ask for project changes, they should be flexible in other aspects such as delivery date, level of detail, scope, or project cost.
6. Timely Review/Feedback – Interim updates should be reviewed promptly and thoughtfully by the appropriate people so that meaningful feedback can be provided and any necessary course corrections can be immediately made.
7. Reasonable Expectations – Stakeholders must recognize the limitations of the technology and project constraints and not have unrealistic expectations. A project based on the assumption of long work hours is a project that has been poorly managed.
8. “Don’t shoot the messenger” – The modeler should not be criticized if the results promote an unexpected or undesirable conclusion.
9. Proper Tools – A simulationist should be provided the right hardware and software appropriate to the project. While “the best and latest” is not always required, a simulationist should not have to waste time on outdated or inappropriate software and inefficient hardware.
10. Training and Support – A simulationist should not be expected to “plunge ahead” into unfamiliar software and applications without training. Proper training and support should be provided.
11. Integrity – A simulationist should be free from coercion. If a stakeholder “knows” the right answer before the project starts, then there is no point to starting the project. If not, then the objectivity of the analysis should be respected with no coercion to change the model to produce the desired results.
12. Respect – A good simulationist may sometimes make the job look easy, but don’t take them for granted. A project often “looks” easy only because the simulationist did everything right, a feat that in itself is very difficult. And sometimes a project looks easy only because others have not seen the nights and weekends involved.

Discussing these expectations ahead of time can enhance communications and help ensure that the project is successful – a win-win situation that meets everyone’s needs.

Dave Sturrock
VP Products – Simio LLC

Simulation Stakeholder Bill of Rights

Wednesday, January 20th, 2010

The people who request, pay for, consume, or are affected by a simulation project and its results are often referred to as its stakeholders. For any simulation project the stakeholders should have reasonable expectations from the people actually doing the work.

Here I propose some basic stakeholder rights that should be assured.

1. Partnership – The modeler will do more than provide information on request. The modeler will assume some ownership of helping stakeholders determine the right problems and identify and evaluate proposed solutions.
2. Functional Specification – A specification will be created at the beginning of the project to help define clear project objectives, deadlines, data, responsibilities, reporting needs, and other project aspects. This specification will be used as a guide throughout the project, especially when tradeoffs must be considered.
3. Prototype – All but the simplest projects will have a prototype to help stakeholders and the modeler communicate and visualize the project scope, approach, and outcomes. The prototype is often done as part of the functional specification.
4. Level of Detail – The model will be created at an appropriate level of detail to address the stated objectives. Too much or too little detail could lead to an incomplete, misunderstood, or even useless model.
5. Phased Approach – The project will be divided into phases and the interim results should be shared with stakeholders. This allows problems in approach, detail, data, timeliness, or other areas to be discovered and addressed early and reduces the chance of an unfortunate surprise at the end of a project.
6. Timeliness – If a decision-making date has been clearly identified, usable results will be provided by that date. If project completion has been delayed, regardless of reason or fault, the model will be re-scoped so that the existing work can provide value and contribute to effective decision-making.
7. Agility – Modeling is a discovery process and often new directions will evolve over the course of the project. While observing the limitations of level of detail, timeliness, and other aspects of the functional specification, a modeler will attempt to adjust project direction appropriately to meet evolving needs.
8. Validated and Verified – The modeler will certify that the model conforms to the design in the functional specification and that the model appropriately represents the actual operation. If there is inadequate time for accuracy, there is inadequate time for the modeling effort.
9. Animation – Every model deserves at least simple animation to aid in verification and communication with stakeholders.
10. Clear Accurate Results – The project results will be summarized and expressed in a form and terminology useful to stakeholders. Since simulation results are an estimate, proper analysis will be done so that the stakeholders are informed of the accuracy of the results.
11. Documentation – The model will be adequately documented both internally and externally to support both immediate objectives and long term model viability.
12. Integrity – The results and recommendations are based only on facts and analysis and are not influenced by politics, effort, or other inappropriate factors.

Note that every set of rights comes with responsibilities. The associated stakeholder responsibilities are discussed as part of the Simulationist Bill of Rights.

Give these expectations careful consideration to improve the effectiveness and success of your next project.

Dave Sturrock
VP Products – Simio LLC

Why Simulation is Important in a Tough Economy

Thursday, October 29th, 2009

Everyone wants to cut costs. No one wants to spend unnecessarily. When budgets are tight, software and software projects are an easy place to cut. Staff positions like Industrial Engineers are sometimes easier to cut or redeploy than production jobs. I suggest that following this reasoning to eliminate simulation projects is often short-sighted and may end up costing much more than it saves. Here are a few reasons why it may make sense to increase your simulation work now.

1) Minimize your spending. Cash is tight. You cannot afford to waste a single dollar. But how do you really know what is a good investment? Simulate to ensure that you really need what you are purchasing. A frequent result of simulations intended to justify purchases is to find that the purchases are NOT justified and in fact the objectives can be met using existing equipment better. A simulation may save hundreds of times its cost with immediate payback.

2) Optimize use of what you have. Could you use a reduction in cost? Would it be useful to improve customer satisfaction? I assume that your answer would always be yes, but even more so in difficult times. But how can you get better, particularly with minimal investment? Simulation is a proven way to find bottlenecks and identify often low-cost opportunities to improve your operation.

3) Control change. In a down economy you are often using your facilities in new and creative ways – perhaps running lean or producing products in new ways or in new places. But how do you know these new and creative endeavors will actually work? How do you know they will not cost you even more than you save? Simulation helps you discover hidden interactions that can cause big problems. Different is not always better. Simulate first to avoid costly mistakes.

4) Retain/improve your talent pool. Some people who might otherwise be laid off may have the skills to be part of a simulation SWAT team. By letting them participate in simulation projects, they will likely achieve enough cost reduction and productivity improvements that they more than pay for themselves. As an added bonus, the team will learn much about your systems, the people, and communication – knowledge which will improve their value and contributions long after the project is complete.

5) Reduce risk. You are often forced to make changes. How do you know they are the right changes? Will a little more, a little less, or a different approach yield better results? How do you measure? A strength of simulation is its ability to objectively assess various approaches and configurations. Substitute objective criteria for a “best guess”, and, in turn, reduce the risk associated with those changes. In a down economy it is more important than ever that you don’t make mistakes.

In summary, rather than thinking of the cost of simulation, you should think of what the investment in simulation today will save you today, tomorrow and every day following. Simulation is not a cost, it is an investment that may return one of the best ROIs available in a tough economy.

Dave Sturrock
VP Products – Simio LLC

Customer Experience

Sunday, March 8th, 2009

(Guest article by Renee Thiesing)

I recently found myself in a situation that can only be described as completely frustrating. And as an Industrial Engineer, it was even more frustrating because with just a small amount of reorganization and process enhancement, the customer experience could be improved tenfold. No, this aggravating experience did not occur at the Department of Motor Vehicles, it transpired at a children’s ski school drop off counter.

I arrived with my daughter at 8:45am, which is in the middle of the recommended arrival time slot of 8:30-9:00am. The line of about 6 people was making the very small lobby area seem tiny. Besides the fact that the line was moving incredibly slow, when the person at the front of the line arrived at the counter, there was no clear process that occurred. Some people had reservations, some did not. Some people needed to rent equipment, some did not. Depending on your situation, the time that you spent at the counter when you reached the front of the line, varied. It seemed there was no clear benefit to having reservations. And for those poor people who were renting equipment (myself included), after finally reaching the front of the first line, we were sent upstairs to an even more chaotic ski rental area. As we joined the back of another line, I realized that this line was only for boots. Once my daughter was finished getting fitted for boots, I needed to go to the other side of the room for skis. And was the line I waited in for skis the final line? No. Next, we trekked back downstairs to where we started, only to join another line. Here is where we waited for my daughter to finally enter the ski school. After it was all said and done, it was one hour later and the world was left with yet another dissatisfied customer.

I can’t help wonder how some simple changes might improve the system. What if they assigned a certain number of people to arrive at 8:30am, another group to arrive at 8:45am and yet another at 9:00am? Would this arrival process help reduce the time customers wait in line? I believe there should be a clear benefit to people who have reservations. Would their experience be improved if they had a line separate from the people who did not reserve a spot? One of the most annoying aspects of the system was that we had to go upstairs and wait in line to rent our equipment. Non ski school patrons were mixed in with ski school children in this room. At the very least, ski school participants should receive priority for being served. But even better, I would like them to analyze the costs and benefits of moving some equipment rental downstairs to the ski school. I would like to drop my daughter off and let them employees fit her for both her skis and boots right there in the room where she’ll eventually begin her lessons. By having her sizes in my reservation file, they could have the equipment ready in the downstairs area.

This is a very simple system. But since it is broken, perhaps they need a demonstration of how it can be improved. Simulation anyone?

Renee Thiesing
Application Engineer – Simio LLC

IE Community Service

Monday, February 16th, 2009

Someone commented on a recent post indicating they felt that we as IEs don’t do enough to help others.

I completely agree!

But just who are “those people” who don’t do enough? It’s you and me.

Sure, there are a thousand very good reasons why you can’t get involved:
• I’m too busy with work.
• I have family commitments.
• I can’t make a difference.
• I don’t know how to get involved.
• There is nothing in it for me.

But I feel that is our responsibility to give back – even if no one is looking. Industrial Engineers have unique capabilities to contribute. There are many ways that we can each make a difference with even a small time commitment.

Here are just a few:

Community group support – The Pittsburgh IIE chapter solicits the community to discover needs and then solicits volunteers to help meet those needs. Some recent projects that I am familiar with are helping to improve the logistics of a Pittsburgh arts festival, and helping to improve operations and resources use for Habitat for Humanity. Many organizations have such opportunities if you take the effort to ask.

Education – Ask your local school if you can come in and talk to a class about what you do. Most teachers would love such involvement. You can give the kids some career ideas and some encouragement to study hard and take those “tough courses” needed for engineering. Want a bit more involvement? Contact your local Junior Achievement chapter.

Engineer’s Week – There are hundreds of organizations that sponsor events for Engineer’s Week (in February). Again, here in Pittsburgh a couple dozen societies are participating in exhibits and activities at a major science museum to help attract their attention and interest in engineering. These are typically staffed by volunteers like you.

Community Group Management – Join a steering council or board of directors for a community group. For the same reasons that Industrial Engineer’s are highly represented among corporate upper management, they have a lot to contribute to guiding community groups. United Way is one place to go to identify organizations in need.

There are lots more opportunities if you look. And I think you will find that participation brings unexpected rewards.

Dave Sturrock
VP Products – Simio LLC

Six Sigma and Simulation: Part 3

Thursday, February 5th, 2009

By Jeff Joines (JeffJoines@ncsu.edu) Associate Professor in Textile Engineering

This is the final installment of the three part series on Six Sigma, Lean Sigma, and Simulation. The first part explained the Six Sigma methodologies and linkages to simulation while the second part discussed where simulation could be used directly in the two six sigma processes (DMAIC and DMADV). The final installment will demonstrate how simulation can be used to design Lean Six Sigma Processes.

Recently, the Six Sigma continuous improvement methodology has been combined with the principles of lean manufacturing to yield a methodology named Lean Six Sigma. Recall Six Sigma is a continuous improvement methodology used to control/reduce process variability while Lean manufacturing is a management/manufacturing philosophy that deals with elimination of waste and is derived from the Japanese Toyota Production System (TPS). When people think of Lean, they conjure up Just-in-time (JIT) manufacturing (i.e., parts or information arrive just when you needed and not before). The elimination of waste is key in Lean systems and Toyota defines three types of waste: muda (‘non-value-added work), muri (overburden), and mura ( unevenness). Most people think of the non-value added form of waste when referring to Lean (e..g., a part sits in queue for ten minutes before being processed for one minute which represents ten minutes of non-value-added time). Many of the Lean tools deal with eliminating this form of waste (muda). Toyota indentified seven original common wastes (paraphrased from “Lean Thinking”) that Lean tries to eliminate.

  • Transportation (moving products that is not actually required to perform the processing)
  • Inventory (all raw materials, work-in-progress and finished products not being currently processed)
  • Motion (people or equipment moving or walking more than is required to perform the processing)
  • Waiting (waiting for the next production step (i.e., queue up))
  • Overproduction (production ahead of demand causing items to have to be stored, managed, protected, as well as disposal owing to potential)
  • Over processing (due to poor tool or product design creating unnecessary processing, e.g., over engineered product that the customer doesn’t need or pays for or having a 99% defect free rate when the customer is willing to accept 90%)
  • Defects (the effort involved in inspecting, fixing defects, and/or replacing defective parts)

Lean Six Sigma utilizes the continuous improvement methodology (DMAIC) as a data-driven approach to root cause analysis, continuous improvement, as well as lean project implementations. Lean encompasses a wide range Lean tools hat are used to implement changes as seen Figure 1. Many of the tools still use the Japanese words (e.g., Poka Yoke or mistake proofing)

Figure 1: Graphical Representation of 24 Lean Tools and Their Broader Categories (Kelly Goforth’s Master Thesis at NCSU)

As was the case for Six Sigma methodology, simulation modeling and analysis can be used in many facets of the Lean implementation and can be quite critical in making decisions. Most improvements have to be documented and analyzed where simulation modeling and analysis can be used easily to ascertain the benefits of the improvements to the current process before actual implementation. The following is just a few cases where I have applied simulation.

Value stream maps are a critical step in becoming lean and should be used first to identify areas of improvement before applying tools randomly. Value stream maps differ from process flow maps in that VSMs contain all the value added and non-value added steps/activities, include the information flow along with the material flow to make the product, are a closed circuit from the customer back to the customer, and take into account customer’s Takt time (i.e., the time needed to deliver the product at the customer’s pace). In developing a VSM, typically a snap shot of just a few key products are mapped for a particular day. Once the current state VSM is developed, areas of improvement as well as the lean tools to achieve these improvements are identified; future state maps are then generated to illustrate the improvement potential. The value stream map can be used to develop a simulation model and a wide variety of demand streams and SKUs can be experimented with to determine the VA and NVA times, etc.

Ford in the early 1900’s utilized fixed flow assembly line (i.e., one production line made up all the machines to produce one car in a sequential line) to maximize throughput. However, when the number of products and part categories increased while lot sizes decreased, manufacturing moved to functional layouts (i.e., job shops) where machines were grouped based on function (i.e., drilling machines). Now parts would flow to all the groups necessary to be produced which introduced great flexibility but also increased travel time, waiting, WIP, defects owing to machine setup, etc. The lean concept of cellular manufacturing decomposes the manufacturing system into groups of dissimilar machines that can process a set of part families which ideally decreases transportation, setups, balances load. These are a mix of smaller job shops and flow assembly lines combined. Determining these part families and groups of machines is quite complicated. Simulation can be used to establish a base line for comparison of the proposed new systems. The new systems can be simulated with varying demand variation, maintenance issues to test the design of the cellular groups before the machines are moved or setup in the new manufacturing system.

When people think of Lean they associate it with JIT and simulation has been applied the most in this area. Pull scheduling systems differ from push systems (i.e., a forecast of a set of parts is sent to the first process and are then pushed through the system until completion) in that parts are not produced until they are needed. Kanbans (signals) are sent back to the previous process to replenish parts only when they have been used by the current process. Pull systems ideally have lower WIP and faster through puts but typically only work for stable demand streams. For example, we worked with a large company building a new plant with fairly large lead-times. Parts of the organization had been very successful in implementing Pull scheduling systems to fill their stock inventories. The company had put in place demand leveling as way to deal with widely customer demand variations. They initially asked us to evaluate where should they place supermarkets (i.e., places to store inventory (Kanbans)), what should the size of the respective kanbans for each SKU, etc. After building several simulation models utilizing their historical demand streams, we determined that the total volume that was being placed on the plant was like a tsunami that would engulf the supermarkets essentially turning it into a push system anyways (i.e., everything sent to the first process (raw materials) and the processed to the end). We demonstrated through simulation the supermarkets would have to be large to be effective and these Kanban sizes were just impractical. The simulation model told them before an enormous amount of money and time was spent developing the process and information system to handle it and they could focus on other Lean areas.

Most people are familiar with the last form of waste (mura) and its elimination through Heijunka (production leveling). Production leveling/load balancing works in conjunction with pull systems and these systems can be simulated again to see their impact as well as to determine where supermarkets (e.g., inventory buffers) need to be placed to reach balancing. Total Preventive maintenance (TPM) is another area where lean practitioners can benefit from simulation modeling to ascertain affect of different policies and schedules on the system.

For more information on Lean Manufacturing and the lean philosophy, I recommend two books by the James Womack et al.: “The Machine that Change the World” and his latest book “Lean Thinking.”

Conclusions

The three part series has hopefully shown how simulation practitioners possess a skill set that is extremely beneficial for Six Sigma, Design for Six Sigma, and/or Lean Six Sigma project. These types of projects are not very unique but just general simulation models that require us to learn their particular language. I find it easier to work on Six Sigma projects because the Lean and Six Sigma practitioners understand statistical analysis necessary for input and output analysis even though they typically have only used the Normal distribution.

Simulation and Strategic Management

Sunday, January 25th, 2009

Guest article from Marco Ribeiro

Corporations everywhere today face the huge challenge of surviving and growing in an extremely competitive environment. Markets are shaped and reshaped due to constant innovation, customer demands and fierce competition. All these forces demand that corporations continuously reinvent themselves trying to maintain competitive advantages that differentiate them from the competition.

Strategic planning in such an environment is a difficult challenge that corporations must overcome successfully. Corporate strategic planning deals with such complex issues as:

    * Understanding the market and its future trends – understand suppliers, competition, their competitive advantages and market positioning. Know the future trends that will shape the market.
    * Future resource allocation – how the corporation’s resources should be organized in order to maintain an efficient operation.
    * Scope of operations -in which businesses should the corporation operate, which ones should be dropped out
    * Diversification of the corporation’s business – should the corporation focus its operations in a small and related set of businesses or should it look to diversify to heterogeneous businesses
    * Future structure of the company – draw the boundaries of the corporation and determine how these boundaries will affect relationships with suppliers and customers

The strategy defined will address all these issues in detail and determine the future direction of the corporation.

Can we use simulation to support the strategic planning process?
Yes, we can. As Thomas Davenport and Jeanne Harris describe in their book: Competing on Analytics: The new Science of Winning, we will see an increasing demand and use of analytical technologies supporting corporation’s decision-making processes.

Simulation can play an important role by helping managers create models of their markets and processes and “toy” with them in order to get a deeper understanding. We can also use simulation to support such efforts as portfolio analysis and management, helping managers determine how to most effectively manage and configure their product life cycle. We can build models of processes and determine the most efficient configuration. Simulation is a valuable tool to test scenarios and make better business decisions.

Marco Ribeiro
LinkedIn Profile

Industrial Engineers are Happy

Sunday, January 18th, 2009

I just saw an interesting article written by the Institute of Industrial Engineers (IIE) citing a National Opinion Research Center study at the University of Chicago. According to that study, Industrial Engineering is one of the top ten occupations when rated by job satisfaction and overall happiness. I have long been an IE evangelist, because I feel it is a great career choice, but it never hurts to have some additional evidence.

The study goes on to evaluate compensation for each of those professions and concludes that IE’s are the third highest paid group out of those top ten happiest careers. While I think it is a mistake to choose a career primarily based on financial compensation, it is a nice bonus when a career that makes you happy also pays well.

Here is a short article summarizing the results: Industrial engineering for your mental health?

I’ve always felt that IE was one of the best career choices possible. And I think this is especially true in the field of simulation.

I personally try to visit a few high school classes each year to help students discover our profession and help motivate them to excel in the classes that they need to be successful in engineering. IIE can help you do this.

I urge you to also get involved with your local high schools and help spread the word.

Dave Sturrock
VP Products – Simio LLC

Can Simulations Model Chaos?

Sunday, January 11th, 2009

Can chaotic systems be predicted? I guess we first need to agree on exactly what a chaotic system is.

BusinessDictionary.com defines it as a
“Complex system that shows sensitivity to initial conditions, such as an economy, a stockmarket, or weather. In such systems any uncertainty (no matter how small) in the beginning will produce rapidly escalating and compounding errors in the prediction of the system’s future behavior.”

It is hard to imagine a complex system that does not show sensitivity to initial conditions. If the follow-on statement is true, then there is little point to ever trying to model or predict the behavior of such a system because it is not predictable. But it is not hard to find counter-examples, even to the examples they provided. Meteorologists do a reasonable job predicting the weather; it depends on your standards of accuracy. Certainly they can predict fairly accurately the likelihood of a 90 degree day in January in Canada or anticipating the path of a tropical storm for the next 12 hours.

A less technical but perhaps more useful definition comes from membrane.com:
“A chaotic system is one in which a tiny change can have a huge effect.”
That leads us toward a more practical definition for our purposes.

For the types of systems we normally model, I would propose yet another definition.
A chaotic system is one in which it is likely that seemingly trivial changes in the initial conditions would cause significant changes in the predicted results, over the time frame being considered.

This definition, while not technically rigorous, acknowledges that most of us rarely have the opportunity or the need to deal in absolutes. We live in a world where the majority of decisions are made subjectively (“Joe has 20 years experience and he says…”) or with gross simplification (“Of course I can model that in a spreadsheet…”). In this world, being able to base a decision on a simulation model with better accuracy and objectivity can help realize tremendous savings, even if it is still only an approximation and only useful within specified parameters.

Can we accurately predict true chaotic systems? By strict definition clearly not. And even by my definition, there will be some systems that are just too chaotic to allow any predictions to be useful.

But can we provide useful predictions of most common systems, even those with some chaotic aspects? Absolutely yes. Every model is an approximation of a real or intended system. Part of our job as modelers is to ensure that the model is close enough to provide useful insight. A touch of chaos just makes that more interesting. 🙂

Dave Sturrock
VP Products – Simio LLC

Six Sigma and Simulation: Part 2

Tuesday, December 9th, 2008

By Jeff Joines (Associate Professor In Textile Engineering at NCSU)

This is the second of the three part series on Six Sigma, Lean Sigma, and Simulation. The first part explained the Six Sigma methodologies. Recall the goal of the DMAIC continuous improvement methodology is to control/reduce process variability of a current process or product while the Design for Six Sigma process DMADV is used to design a new process or product with minimal variability before creation. Simulation modeling can be employed in almost every phase of either methodology.


Define

Six Sigma practitioners have to estimate the cost savings for each project to be certified or justify the project typically. However, most of these cost forecasts are made on point estimates of key parameters (i.e., raw material cost, customer/product demand, cost of capital, currency rates, etc.). By employing Monte Carlo simulation, variability and/or ranges on these point estimates can be employed to provide a more reliable estimate. Along these lines, several projects have been proposed and simulations can be utilized to help management perform project selection based on resource constraints and objectives.

Analyze and Improve

During the Analysis and Improve phases, Design of Experiments (Full, Fractional, Mixed, etc.) is the most common tool utilized which provides a base line to illustrate improvement when changes are made as well identifying factors of interest to control or change. The normal baseline measure is defined as the process capability (Cpk) which is an indication of the ability of a process to produce consistent results – the ratio between the permissible spread and the actual spread of a process. The Cpk index takes into account off centeredness and defined as the minimum of (USL-Mean)/ 3? or (Mean-LSL)/ 3? where USL and LSL are the upper and lower specification limit. A six sigma process is normally distributed with a Cpk value greater than 1.5.

Using the real system is better in terms of capturing all complexities, interactions, etc. However as simulation practitioners, we recognize when that might be possible or viable. The following lists examples where simulation modeling in terms of Monte Carlo or process simulation can be used.

  • If the product or process does not exist as is the case in a Design for Six Sigma, simulation models can be used to ascertain capability of a new process and product before implementation. For example, tolerance stack up of individual parts or processes can be determined. Take parts or processes which are within tolerance individually (e.g., bearing and a shaft) but the assembly process might not be capability owing to the tolerance stack up problem which occurs in manufacturing, service, and transactional processes.
  • The cost of performing a DOE with replications is too high (e.g., raw material cost, cost of shutting down current process). We have worked with companies in developing process and Monte Carlo simulation models that could be used to determine their capabilities and ascertain the potential improvement in their changes.
  • The time of running the set of experimentation makes it impractical to determine the baseline or ascertain the improvements of a process. While working with a large company and their six sigma process improvement team with a complex global supply chain, one of their projects was to reduce inventories of a series of products with a ten to twelve week lead time. The team had to evaluate six inventory policies, indentify which one of three suppliers was best, etc. The DOE with sufficient replications would have taken years to complete and made the project useless without the simulation model. Also, most of the data driving the model was based on lead-times which are not normally distributed.
  • Think of systems where there are multiple processes that feed one another (e.g., departments, plants, etc.) which contain only five or six factors each. Transfer functions can be generated from a traditional DOE on each individual process but not the entire system. A simulation model can be used to combine each individual transfer function into determining the capability of the whole system as well as testing a wider range of values.
  • There are several environments, where performing a DOE is impractical or impossible. For example, we have trained dozens of people associated with hospital systems from around the country in Six Sigma. Simulation modeling and analysis allows these practitioners to be able ascertain process capability with a model because the real system cannot be used since patient care is at stake. Other environments where we have used simulation modeling instead of the real system is in processes which are transactional like the banking or insurance industries.


Control

Simulation can also be used as a process control aid as the process is being implemented to determine potential problems.

Hopefully it is apparent that simulation experts already posses the skills that can greatly help Six Sigma projects. These types of projects are not unique but just general simulation models we are know how to build. They only require us to learn the Six Sigma language as well as the need to calculate Cpk statistics. I find it easier to work with Six Sigma people because of their statistical training for understanding input and output analysis even though they typically have only used the Normal distribution. In Six Sigma and Simulation: Part 3, the use of simulation in the Lean Sigma world will be addressed.