Using Simulation in Using Simulation in Understanding the Understanding the

Dynamic of Business Dynamic of Business Processes Processes

ByBy

Phinsuda TarmyPhinsuda Tarmy

MBA 731 Fall 2007MBA 731 Fall 2007

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What is Process Simulation ?What is Process Simulation ? The technique that allows representation of processes, people, The technique that allows representation of processes, people,

and technology in a dynamic computer modeland technology in a dynamic computer model

Mimics the operations of the business by stepping through the Mimics the operations of the business by stepping through the events in compressed time events in compressed time

Animates the activitiesAnimates the activities

Keeps track of statistics about model elements and Keeps track of statistics about model elements and performance measuresperformance measures

Examples of simulation software:Examples of simulation software: ArenaArena AutoModAutoMod Call$imCall$im GPSSGPSS OPNET ModelerOPNET Modeler Simulat8Simulat8 SIMSCRIPTSIMSCRIPT

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Why do we have to care?Why do we have to care? Processing times are highly variableProcessing times are highly variable Arrivals are random and cyclicalArrivals are random and cyclical There are random events such as machine There are random events such as machine

failures and employee absence in the failures and employee absence in the systemsystem

Using averages do not provide accurate Using averages do not provide accurate picture of the system performancepicture of the system performance

Simulation takes into account the Simulation takes into account the variability in the system that affects variability in the system that affects performance over timeperformance over time

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Basic Concepts, Techniques & Basic Concepts, Techniques & DeliverablesDeliverables

Concepts:Concepts: The imitation of the process is produced using a computer The imitation of the process is produced using a computer

programprogram The simulation is dynamic The simulation is dynamic modeling changes in the modeling changes in the

system or process over timesystem or process over time The simulation is stochastic The simulation is stochastic having randomly varying having randomly varying

performance performance Techniques:Techniques:

ModelingModeling Probabilities and Statistics such as random distribution, Probabilities and Statistics such as random distribution,

sampling, design of experiments, etc.sampling, design of experiments, etc. Deliverables:Deliverables:

Estimated performance measures of the modeled system Estimated performance measures of the modeled system or processor process

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BenefitsBenefits Deals with system that changes with time and Deals with system that changes with time and

involves randomnessinvolves randomness Analyzes potential effects of process changes Analyzes potential effects of process changes

without the cost of real implementationwithout the cost of real implementation Reduces riskReduces risk

Scenarios and sensitivity analysis reduce the risk of the Scenarios and sensitivity analysis reduce the risk of the unknownunknown

Proves conceptsProves concepts Helps sell the new design and ‘unfreeze’ current ways of Helps sell the new design and ‘unfreeze’ current ways of

doingdoing Animation can help understanding the process behaviorsAnimation can help understanding the process behaviors Forecasted performance measures can aid decision Forecasted performance measures can aid decision

makingmaking

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Typical Questions Answered by Typical Questions Answered by Simulation Simulation

Process Design DecisionsProcess Design Decisions What is the total process cycle time?What is the total process cycle time? What is the maximum throughput capability of the process?What is the maximum throughput capability of the process? What is the capacity of the service and waiting areas where the What is the capacity of the service and waiting areas where the

process is performed?process is performed? What are the equipment and technology requirements to meet the What are the equipment and technology requirements to meet the

service demand?service demand? How long do customers have to wait before getting serviced?How long do customers have to wait before getting serviced? How can workflow and customer flow be streamlined?How can workflow and customer flow be streamlined?

Process Management DecisionsProcess Management Decisions What is the best way to schedule personnel?What is the best way to schedule personnel? What is the best way to schedule appointments for customers?What is the best way to schedule appointments for customers? What is the best way to schedule carriers or vehicles?What is the best way to schedule carriers or vehicles? Which customers or tasks should be serviced first?Which customers or tasks should be serviced first? What is the best way to deal with unexpected situations or emergencies?What is the best way to deal with unexpected situations or emergencies?

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DrawbacksDrawbacks Good model building requires special training and Good model building requires special training and

experienceexperience Simulation results may be difficult to interpretSimulation results may be difficult to interpret Simulation modeling and analysis can be time consuming Simulation modeling and analysis can be time consuming

and expensiveand expensive

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Implementation StepsImplementation Steps

1.1. Identify and Map ProcessesIdentify and Map Processes2.2. Collect dataCollect data3.3. Build modelBuild model4.4. Verify modelVerify model5.5. Validate modelValidate model6.6. Runs and analysisRuns and analysis7.7. Documentation and reportingDocumentation and reporting

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ExampleExampleSupply chain dynamics (from iThink Supply chain dynamics (from iThink

simulation software)simulation software)

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Example (cont.)Example (cont.)

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ReferencesReferences1.1. J. Banks, J. S. Carson, II and B. L. Nelson, “J. Banks, J. S. Carson, II and B. L. Nelson, “Discrete-Event Discrete-Event

System SimulationSystem Simulation”, (Upper Saddle River, NJ, 1996),”, (Upper Saddle River, NJ, 1996),2.2. B. Gladwin and K. Tumay, “Modeling Business Processes B. Gladwin and K. Tumay, “Modeling Business Processes

With Simulation Tools”, in With Simulation Tools”, in Proceedings of the 1994 Winter Proceedings of the 1994 Winter Simulation ConferenceSimulation Conference, (Lake Buena Vista, FL, December , (Lake Buena Vista, FL, December 11-14, 1994), pp. 114-121,11-14, 1994), pp. 114-121,

3.3. A. Greasley, “Effective Uses Of Business Process A. Greasley, “Effective Uses Of Business Process Simulation”, in Simulation”, in Proceedings of the 2000 Winter Simulation Proceedings of the 2000 Winter Simulation ConferenceConference, (Orlando, FL, December 10-13, 2000), pp. , (Orlando, FL, December 10-13, 2000), pp. 2004-2009,2004-2009,

4.4. V. Hlupic and S. Robinson, “Business Process Modelling V. Hlupic and S. Robinson, “Business Process Modelling And Anailysis Using Discrete-event Simulation”, in And Anailysis Using Discrete-event Simulation”, in Proceedings of the 1998 Winter Simulation ConferenceProceedings of the 1998 Winter Simulation Conference, , (Washington, DC, December 13-16, 1998), pp. 1363-1369,(Washington, DC, December 13-16, 1998), pp. 1363-1369,

5.5. K. Tumay, “BusinessK. Tumay, “Business Process Simulation”, in Process Simulation”, in Proceedings Proceedings of the 1995 Winter Simulation Conference of the 1995 Winter Simulation Conference (Arlington, VA, (Arlington, VA, December 3-6, 1995), pp. 55-60December 3-6, 1995), pp. 55-60