Simulation software creates an environment built to work out every possible scenario and outcome, all based on user inputs. This space is a safe learning environment where you can picture a start-to-finish process, make continual adjustments, and avoid major mistakes that often kill your bottom line.
Here are 4 big reasons why simulations are indispensable when it comes to controlling costs and protecting profits.
1. Simulation Software Helps You “See” the Process.
While learning the Toyota Production System, it was stated that everything I needed to know could be learned on the “gemba,” or shop floor. By walking around and getting my hands dirty, I would learn to see “muda” or the 7 forms of waste — transportation, inventory, handling, over-production, over-processing, waiting, and production defects — that plague most processes.
While I could easily see certain problems, making the necessary changes to correct any problem could become an expensive and risky “experiment.”
Consistent and incremental changes work best within a production environment. But it’s not always clear how small changes affect all the dependencies in the system; this is why simulations are key.
Computer simulations offer a way to model an entire process, providing a cost-effective method to test improvements before making changes in the actual system.
2. Simulations Create a Safe Learning Environment.
If an improvement effort is focused on one part of the process, your team may not be aware of second and third order results and how other areas within the larger process may be suffering.
Simulation software creates an experiential learning environment where your management team can picture the end-to-end process and safely experiment with various changes. A computer model brings a more holistic view of your processes to the fore, exposing bottlenecks and inefficiencies.
3. Simulation Software Helps You “See” the Possibilities.
Simulations are repetitive by nature. If you don’t find your answer the first time, you can make adjustments and replay your simulation over and over until you discover your ideal solution.
Through simulation software you can push a business system to its limits and find its breaking point. You can run scenarios and synchronize your information requirements with your decision points and create better plans.
4. And Simulations Help You “See” the Future.
There is a great deal of risk involved in adjusting the operation of a production line. Which operating parameters do we change? How much savings will the change produce? How will it change other process flows within the company?
With a computer simulation, you can see the process perform and run multiple iterations before making these crucial choices.
One such company, Volvo Powertrain Foundry in Sweden, used simulation software to model their engine foundry process. The computer program was used to determine how to schedule their holding and smelting furnaces.
By balancing the holding capacity of their forge with electricity rate fluctuations, Volvo engineers learned how to take advantage of cheaper electricity rates at night. The simulation model helped them visualize the impact of the schedule change on their electricity costs.
And this is just one example of simulation software in action.
© Takouba Security, LLC.
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