Using dynamic simulation, a replica of the current operation is created and validated to prove that the baseline model behavior and results are comparable to existing data. Once the ideal process improvement solution is determined, the transition plan can be tested and analyzed to minimize the impact on current production schedules, allowing for optimum efficiency during an otherwise hectic phase of the improvement process.

 

For instance, during analysis, the model may show the “excessive” resource travel within an operation. More specifically, costs are progressively incurred through the non-value added time to the total product lead time. A resource that travels to move parts from one location to another 30% of the time will cost the company 30% salaries, benefits and intangibles without generating a return. Furthermore, the excessive travel causes an increased inventory on the production floor and longer product lead time.

 

As a result, money which could otherwise be used to improve cash flow or implement process improvements is now tied up in the operation.

The total savings in such an implementation is $9500.00 off the bottom line inventory cost. This amount was tied up in “in-production” inventory used mainly to keep production flowing. In addition, eliminating $2.25/hour per person, in a 200 employee factory equals $3600.00 per shift compounded over a year (340 days) and $1,224,000.00/year per shift. Add to that the reduced lead time, which increases the production throughput by 46% using the same equipment, resources and schedules. The bottom line? One less production shift.

 

What You Need to Know:
The ROI of dynamic simulators far exceeds their implementation cost as they provide optimization of the current state while providing an efficient analysis path for all future changes to the operation. CreateASoft Inc. is the developer of Simcad ^® dynamic simulation software and Digital Twin Studio^® real-time dynamic visibility & predictive analytics tool.