If we can inexpensively build accurate models that are easy to understand and manipulate, they can help us improve the real systems they represent. In a manufacturing context, simulation offers a useful way to investigate the performance of a factory, modelling the resources available within each business unit, the arrival of raw materials and the activities required to convert them into finished goods. Alternatively, it might be desired to model the performance of the whole supply chain – albeit at a different level of detail. With a better understanding of how such systems operate, they can be configured and operated more effectively.
A wide variety of studies are possible: a bottleneck might be identified and eliminated before a physical factory is constructed, eliminating an expensive and disruptive rearrangement of equipment. Alternative sources of supply might be considered, based on their performance in terms of lead time and degree of variability; the impact that a design change will have on manufacturing might be investigated, or the value of a proposed investment in new production equipment, and so on. Appropriately designed, manufacturing simulation can address problems of many kinds, affecting systems of any scale from a single process up to the operations of a multinational supply network.
In this review, the key concepts of computer-based simulation are outlined, in order to help managers make informed decisions about how simulation might be applied in their own circumstances. It sets out what one can reasonably expect to obtain from a modelling exercise, the inputs that would be required and how to interpret them. The scoping and management of a project of this kind are also discussed. The principles outlined can be applied whichever simulation software is ultimately used.
Richard Farr