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Simulation Software Solves Problems
To better visualize business problems, companies are using simulation software. This kind of process mapping goes beyond earlier diagramming; the data is live, and the simulation can include the element of time.
Posted Jun 20, 2000
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Defining and visualizing a business problem are the first steps in resolving it. If you can see what the problem is, as well as where and why it exists, you're on the way to a solution. This is especially true of process or workflow variables where bottlenecks can produce inefficiency or increase costs. Common trouble spots include manufacturing procedures, warehouse management, inventory control and shipping and distribution.

To better visualize these problems, many companies are turning to simulation software. This kind of process mapping goes beyond earlier diagramming applications such as Visio; the data is live, and the simulation can include the element of time. Simulation software turns raw data into animated diagrams that let users quickly see how unknown factors affect a business process.

"I had two problems that I thought simulation might help me solve," says Mike Seifert, plant manager at NIBCO, a manufacturer of flow control solutions for air, oxygen and water in stuart's Draft, Va. "I needed to train personnel, and I wanted to enhance and improve our manufacturing process."

Seifert looked at a variety of simulation products, some costing as much as $10,000, before settling on Simul8 from Simul8 Corp. of Herndon, Va., priced at $499. "My people picked up on it quickly and were able to do basic simulation on their own in a couple of days," he says.

Like Visio, Simul8 lets you map business processes by dragging and dropping objects from a palette that represent various process elements. The simulation replicates your process flow. Property dialog boxes let you set parameters for the various objects, including factors such as the speed of a machine or the cost of a line item.

To further simplify simulation setup, Simul8 offers templates for common business situations that can be used right out of the box, according to Mark Elder, CEO of Simul8. "The templates ask the user appropriate questions and the user enters the answers," Elder says. Among the business environments for which Simul8 provides templates are retailing, manufacturing and call centers. The software provides a starter kit of animated icons to symbolize various operations and activities in the workflow; you can also create your own icons and add them to the toolbar to indicate any step or quantifiable factor in a process.

"After a simulation is built, you can try out what-if scenarios by adding or removing different factors without the expense of actually buying new equipment or hiring or firing personnel," Elder says. Simul8's software can also measure productivity and chart the effectiveness of operational changes. Variables such as customer demand, manufacturing time and labor time and cost also can be simulated and measured. Separate Simul8 process modules can be linked to each other, in effect creating a mirror image of an entire business. Companies can also use Simul8 to see how extending their systems to customers, partners and suppliers can affect operations.

Simul8 and Visio, which Microsoft recently acquired, occupy the low end of the range of simulation products that allow businesses to begin mapping their business processes. For the more sophisticated analysis required in planning new facilities, most users turn to packages that cost $40,000 to $75,000 range, according to Irving Chernofsky, a GartnerGroup analyst who covers simulation for warehouse management. "Simulation is useful in the design of new warehouse facilities," he says. "Architects, engineering firms and building contractors may work with simulation to plan an entirely new structure, make the facility as efficient as possible and avoid costly problems."

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