Written by Laura Mackenzie on Wednesday July 11th 2012 in Newsletter, What We're Thinking

5 Ways Simulation Can Drive your Lean Projects

We all know taking on a lean project is a big task, but did you know that simulation can help make your lean project a bit easier? From initial buy in to assessing your return on investment check out the five reasons why our top Lean Consultant, Liam Hastie thinks simulation could help you too…

• Building Project buy-in
• Quickly compare different solutions
• Develop a Quality Strategy
• Road test your KPIs and outcomes
• Assess Return On Investment – be confident in the project’s success

Building project buy-in

You are a team leader or improvement manager in the opening stages of a new project, you are convinced that lean can revolutionize your organization, your ideas are brilliant and the potential savings are huge but now for the tricky part, convincing others in the organization that the project, and you, are worthwhile investments. Far too often, great opportunities are missed simply because the potential of the project was lost in your 50 page briefing report or because nobody was really captivated by all of those colorful charts that you made.

Simulating your process gives you a real advantage here.  Being able to present a dynamic and animated display of your process is very a powerful way of highlighting the constraints in a system and is very effective in rallying both operational and managerial staff to recognize the need for change. Whether your simulation is showing a large queue building-up, or a series of work centers grinding to a halt due to a lack of stock, nothing is more effective at communicating these types of issues than letting staff see this happening for themselves.

Quickly compare different solutions

Rarely in a lean project is there one clear solution to an identified issue. As a lean team your role should be to identify the best course of action by comparing competing solutions in terms of objective criteria, such as the potential to improve the process or the cost of implementation. Often, however, these types of decisions will become politically influenced or else delayed and avoided due to the costs associated with conducting dry-runs or live trials.

Process simulation offers 2 main benefits here:

• Competing solutions can be quickly modeled using simulation software and compared to determine which scenario will produce the best results. Comparing solutions in this way is inherently more cost effective and minimizes the need for down-time or costly live trials. The speed at which solutions can be tested using simulation is also a marked advantage here. In mere seconds the performance of a system can be assessed over a week, a year, or even ten years, and throughout these tests the software is fully capable of modeling random elements such as seasonal variation or fluctuating sales demand.
• Using process simulation means that the process is always foremost in the progression of the project. This offers great benefits in being able to avoid fighting between teams and the sort of political difficulties that are a real part of working in any large organization. Focusing on a simulation and being able to clearly demonstrate the background, justification and potential benefits of an approach really helps to push forward a projects agenda and to dispel any concerns that a suggested approach is unwarranted or is an attack on others interests.

Develop a Quality Strategy

Whether or not your lean project is part of a wider Six Sigma program, we are all aware of the importance of maintaining quality in any product or service stream. Yet, what are the ways of doing this in your system and where are the best places in your process for conducting quality assurance measures that will identify the most defects whilst minimizing disruption to flow?

Mapping your process out and discussing the pros and cons of different quality strategies with your team is an essential part of answering these questions and achieving a truly lean operation.

Process simulation can really enhance this activity by providing quick and accurate assessments of different quality approaches. Does your bottling line need one or two visual checking systems, or does your passenger service require 2 or 3 stand-by coaches at peak time? These are just some of the questions that can be quickly answered using simulation software.

Road test your KPIs and outcomes

Having the wrong KPIs is a real risk to any lean initiative. Assessing results and outcomes can be a time-consuming process in its own right and is often difficult to replicate after the actual event.

Watching a process run through each of its stages and being able to do this multiple times and at different speeds, or under different conditions, is one of the most constructive ways of using process simulation.

Working in this way, it becomes very easy to identify the characteristics of a process and to gain an insight into exactly which results and KPIs are the most significant to the overall performance of the system. For example if you were running a factory producing aircraft parts – how would you assess which factor has the biggest influence on your output? Is it the staff availability per day, the stock levels of you key components or the equipment breakdowns that prevent you from achieving the required output levels?

Assess Return On Investment – be confident in the project’s success

Determining the ROI of a process improvement project can be an arduous task. Frequently this calculation will need to factor in complex factors such as the performance of a process over the next year (including seasonal variation, changes in demand, etc) or the expected influences to a system from events such as staffing changes or the introduction of new equipment. Making this even more difficult is knowing that this calculation will be scrutinized and that there will be responsibility on you to clearly demonstrate the method that you have used to determine your results.

Working with process simulation can be of real benefit at this stage in a project. In SIMUL8 there are a host of features that focus on the financial results of your process. Taking into account factors such as the expense of capital equipment, individual staffing rates or the return generated per work item, SIMUL8 will generate an accurate breakdown of the costs and revenue potential of any given scenario. This provides a simple and easily traceable way of evaluating the benefits of adopting a lean approach and reinforces your confidence in being able to deliver a successful project.

So that’s it guys, my top reasons why simulation is beneficial in any lean project. Hope you found it helpful and I have no doubt you’ll be delivering successful lean projects in no time!