Six Sigma – Computer Modeling and Simulation

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[Originally Published 11/20/2013 as “Can Computer Modeling and Simulation Save You Money?”]

Computer Modeling and Simulation is a great tool to understand current processes, and is used to explore and test alternatives for improvement without incurring the downtime and risk associated with making changes to, and interrupting the flow of critical operations.  It is also a tool that can be used in the Six Sigma quality methodology for improving efficiencies. 

 Six Sigma is well-tested and proven, having generated substantial savings for many companies, including Motorola and GE who have saved billions of dollars using the Define, Measure, Analyze, Improve, and Control (DMAIC) methodology that is the cornerstone of Six Sigma (savings noted in the following portion of Table 2 excerpted from iSixSigma1).

Table 2: Six Sigma Cost And Savings By Company

Year

Revenue ($B)

Invested ($B)

% Revenue Invested

Savings ($B)

% Revenue Savings

Motorola

1986-2001

356.9(e)

ND

16

4.5

GE

1996-1999

382.1

1.6

0.4

4.4

1.2

Key:$B = $ Billions, United States(e) = Estimated, Yearly Revenue 1986-1992 Could Not Be Found ND = Not Disclosed Note: Numbers Are Rounded To The Nearest Tenth

 Computer Modeling and Simulation has application in the Analyze and Improve phases of Six Sigma implementation.  There are certain criteria that are well suited for the use of Computer Modeling and Simulation as noted by Fleming and Manson under the heading “When to apply process simulation”2:

As with all extremely powerful tools, process simulation must be used correctly and only in appropriate situations. Process simulation can be a real aid in the following circumstances:

  The process is very complex and difficult to visualize. With a simple process, process mapping combined with brainstorming techniques will usually generate improvement ideas. With complex and hard-to-visualize processes, however, a working model will help you understand where your efforts will provide the largest payback.

  The process involves many decision points. The more decisions a process requires, the harder it is to visualize all of the possible paths that may be encountered.

  The project goal is to optimize the use of resources for a process. Resource utilization is hard to visualize, especially when the same resources are used in a variety of actions throughout a process or when one resource is used for some portions of the process and another resource is used later on.

  The goal of the project is to establish optimum-lot (“kanban”) sizing for a manufacturing process. Many manufacturing organizations use demand-flow technology, which involves formulas to calculate kanban sizes. These work well with simple manufacturing processes, but the formulas can be much more difficult to implement when several suppliers are linked in the chain. A process model allows you to visualize the flow of material through the factory floor. (pg. 2)

Computer Modeling and Simulation is a powerful, valid tool for Lean Continuous Improvement Initiatives, and should be considered for use when appropriate.

References:

1Retrieved from: www.isixsigma.com/implementation/financial-analysis/six-sigma-costs-and-savings/

2Fleming, S., Manson, L. (2002).  Six Sigma and Process Simulation.  Quality Digest. Retrieved from:  http://www.qualitydigest.com/mar02/html/sixsig.html