Outline: 1. Why Simulation Models are Necessary 2. An Intuitive Explanation of Simulation 3. Objectives of Manufacturing Simulation 4.

Steps in a Sound Simulation Study 5. Simulation Software for Manufacturing 6. Selecting Input Probability Distributions 7. Designs and Analysis of Simulation Experiments 8. Using Simulation to Design a Manufacturing System 9. Summary

Our presentation today will be broken into nine separate sections: First of all, we're going to talk about (1), "Why does one need a simulation model to study a manufacturing system? Why can't we actually go out there to the shop floor and physically experiment with the system itself?" Then we're going to present (2) an intuitive explanation of what actually goes on inside of a simulation. The reason we're going to do this is that it's been my impression historically that in many cases people really don't have a good idea what is actually involved when a simulation is evolving inside of a computer. Then we're going to (3) make things a little bit more specific to the manufacturing environment, and talk about specific issues that one typically addresses when using simulation in the manufacturing arena. Also, we're going to talk about the types of information that we typically see being output by the simulation model-once again, to make it a little bit clearer as to what we can expect to get when we do a simulation study. To further cement ideas in place, we'll then talk about (4) ten steps we would typically see in a simulation study, and furthermore, the order in which these things are typically done, in order to guarantee not only a valid model of a system, but also a model that's actually used in the decision making process. Next, a subject which is of interest to many people, particularly people who are just starting out in simulation or doing a new project, namely (5): "What sort of simulation software is available in the marketplace, and how does one go about selecting simulation software for a particular project?"

Plus, we're going to see some examples of animation being used in the manufacturing environment. Then we come to a few subjects that are a little bit more technical but very important. This (6), to say it in a different way, is concerned with how to model the randomness that is seen on your factory floor-things like processing times of jobs at a machine, how long the machine runs before breaking down, repair times for the machine, and so forth. We will discuss two major cases. What do you do when you have data collected from the shop floor? How can that be used to model the randomness in your system? And also, what do you do when you don't have any data available? This might represent a situation where a new system is being considered. Then we're going to come to the subject (7), "How does one design and analyze simulation experiments?" No, simulations do not produce answers; they produce statistical estimates of the answers, or measures of performance for your model. And, if you don't collect enough data and use it in the right way, the statistical estimates from your simulation may not give you a very reliable idea of what the true answers are for your simulation model. And then, to some extent the culmination of our discussion (8), we're going to see how simulation is actually used in the design of a manufacturing system. We're going to take a manufacturing system and go through six different designs for the system, using simulation. In each case we will evaluate how good the particular system design is and, in addition-using the results from the simulation-we'll see what we need to do to improve the performance of the system as we move to a new system design. And lastly (9), we have a very important summary, where we're going to discuss eleven different things, which, if they're not adhered to, could have a significant detrimental effect on our simulation study. These are pitfalls to avoid in doing a simulation study if we want to actually end up with a successful study at the end of all of our work. So, we move now to our first section

"Why do we need simulation models to study a manufacturing system?" Many times we have a manufacturing system and we want to learn something about it-how to improve its performance, perhaps. But it's often times physically impossible to actually go down there on the shop floor and do experiments with the system itself. And there are a number of reasons why we can't physically experiment with the system, which are listed here. First of all, experimentation with the system itself is oftentimes disruptive. For example, let's suppose we had an automotive assembly line where currently much of the welding is done manually. We're thinking about bringing in robots to do this welding. If we don't use a simulation model, we might bring in the robots, and while they're being installed the assembly line may be disrupted; we may use the robots for a while, we may find out they don't even work out that well and we have to take them out. Once again, the assembly line is going to be disrupted-not to mention the cost of the robots. A better way is to build a simulation model of this line, try robots inside of the computer and see-before any capital expenditure is made-how well this idea of robots may in fact work out. Its kind of an insurance policy ahead of time- Experirnentation with the systern itself is not cost effective. Many times in the past, people designed factories by making "back-of-theenvelope" calculations in terms of the size of the factory that was needed, how many work stations, how many machines, and so on. Then the factory is actually built and they run it for six months; and unfortunately, sometimes people might find that, "Gee, we really don't have enough

capacity at this particular work station to produce the parts we really need." Well, that's no problem, all we have to do is retrofit the systemknock out a few walls, dig up some concrete, bring in some new machines Obviously this sort of procedure is going to be very expensive once the system is built. Or we could actually have the opposite problem, where we might have excess capacity sitting around on the factory floor wasting a lot of money. So what's a better way to do things? Build the simulation model before any concrete is poured, before any capital expenditures are made. Try out your ideas, and assuming that your model is reasonably valid-is a good representation of the system-then the ideas that seemed good in the simulation model are likely to come very close to being true when in fact the plant is actually built. Finally, in many cases experimentation with the system itself will be impossible. We can see clearly that when we're building a new plant, there isn't any factory to do experiments with. The only way we can learn about this new factory in general is to build a model on the computer of various proposed alternatives for the factory.

There are essentially two overall objectives or uses of simulation in the manufacturing environment. One is when we're designing a new system

Oftentimes, we don't have much information about exactly what the plant is going to look like. We don't have any data that we can collect, because there is no factory. Simulation models, at this point in the game, tend to be fairly coarse- not highly detailed. A typical objective when designing a new factory might be to determine how many machines we need, or how many pieces of material handling equipment we need to meet a certain objective-like producing five hundred parts in a week.

Another sort of situation that we are sometimes faced with is this: We have an existing system, it's actually sitting there and we want to improve its perforn1ance. We want to fine tune, or "optimize" it. We know exactly how the system operates; we can collect data from the system and build a detailed model. An example of this sort of analysis might be where we have a complicated conveyor system in our existing factory and we want to improve its performance-fine-tune its control logic, for example.

I would like to give you a few specific benefits-financial in particular-of the use of simulation in the manufacturing environment. The first of these was at Alcoa, at one of their aluminum products plants in Alcoa, Tennessee. They were producing aluminum products, but they decided they needed to increase their capacity. They had a certain number of mills that they were using right at that time, and by back-of-the-envelope calculations they decided that they were going to need to increase the number of mills to thirty to get the desired capacity. But, fortunately, before they went out and actually bought these additional mills they performed a simulation study. And 10 and behold, what the simulation study showed them is that instead of the thirty mills that they thought they needed, they only needed to go up to twenty-six mills. So they were saving buying four mills-and these mills turned out to cost $3,000,000 each. That was a capital avoidance of $12,000,000 that was saved as a result of this particular simulation study. The second example is one that we did at Simulation Modeling & Analysis Company. It was a Fortune 500 manufacturing company, which produced household products. What happened in this particular study is, subassemblies or components are being produced, but before they are made into final products they are put into large containers that are actually about five feet square. The containers are then stored in a warehouse until enough components are available to make a run of the final assembly machines. The fundamental issue in this simulation study was, How many containers were needed to store work in process? These containers were not only large, but they were quite expensive. The company was ready to go out and just buy three thousand containers-that's what they thought they needed. Our simulation study in fact showed that they only needed 2,250 containers and not 3,000 as they thought. This was a savings of 750 containers. When you consider the cost of going out and buying the

containers, and also the money they saved by not having to go out and rent additional factory floor space for this work in process, the total savings during the first year alone for this company was more that $500,000-a very good return on their investment.

Now, I mentioned that we really have seen a big increase in the use of simulation during roughly the last five years. What are some of the reasons for this increased popularity of simulation in manufacturing? Many American industries are faced with greater foreign competition. For example: automobile manufacturing, steel, electronics, rubber products, and so forth. As a result, American manufacturers have turned to automation as a way of getting increased productivity, increased quality and also-hopefully at the same time-cost reduction. The problem is that that these automated systems tend to be very complicated. They have many different components that are tied together by material handling, by computers, and so forth. And there's really no way that one can simply, with back-of-the-envelope calculations, analyze these complicated systems in concert to find out how to get the best performance from them. The manufacturers have turned to simulation, which is generally the only approach to really deal with the complexities of automated systems. Reduced computer costs: People were simulating manufacturing systems in the 1970s, but the problem was at that time they had to typically use a large mainframe computer. You may submit a job one day and have to

wait till the next day to actually get it back. Now, what we see is a trend toward using high- speed microcomputers and also engineering workstations. In many manufacturing simulations, these computers are sufficient; and furthermore the cost of purchasing these is really not very large for a company of any size. The marginal cost of getting data from a simulation model is typically very low, because using one of these computers we can run our simulation overnight, or on the weekend-and the cost is virtually nothing. One should be aware that micros are still not sufficient for every manufacturing operation, and by and large we're talking about relatively fast micros being used, at least in large projects. Another thing that has helped increase the use of simulation is improved simulation software for manufacturing. In the old days it could take a long time to build a model of a complicated manufacturing system, but now with improved simulation software model development, the time has been reduced considerably, and with the tight time constraints in most manufacturing environments it is extremely important to be able to get the project done when it's actually needed. Lastly, but related to these two, the availability of graphical animation has led to a greater understanding and use of simulation by engineering managers. Let me give you a particular example of a success story in that regard. At General Motors of Canada they had used simulation to some extent, but it had not totally caught on. Then they brought in a simulation package with animation, used it for a project, and furthermore used the animation to make a presentation I to a vice president. The vice president was so impressed that he made a mandate that for every new system within G M of Canada, and every system that was going to be improved, simulation must be used before any capital expenditures were actually made. So, animation is in fact a very important technique, particularly in communicating the essence of a simulation model.

We'd now like to try to convey the basic essence of what goes on inside of a simulation. Our vehicle for doing that will be the simplest possible manufacturing system that we have. We have a single machine tool. Jobs or parts arrive. If a part arrives and the machine is idle, the machine will start processing the part immediately. If a job arrives and the machine is busy, the job will join into the queue. When the machine finishes the current job, the machine will take the first job that's in the queue-i n other words the queue is processed first in, first out. The manner in which jobs arrive in general will be random. The processing times of jobs on the machine in general will be random as well. What we want to do here is execute the simulation of this very simple system, and our stopping rule here will be to run the simulation until 1000 jobs have completely gone through the model. Now our thousand jobs I might say, is just for expository purposes. In general one must pay attention to how long they run the simulation to get accurate statistical results.

Now, any time you do a simulation you must have a specific objectivesomething that you want to learn about the system. In our case here what we want to do is estimate the average or mean time that a job spends in a system. When we talk about time in system, we're talking about the instant the part walks in the door until the instant the machine finishes processing the part and the job leaves. That's the total time in system. Here's the way we're going to do it: Let "Ti" be that amount of time that the "ith" job to arrive actually spends in the system. Because we'll run our simulation until 1000 jobs have been completed, we will actually have access to these data. We're going to take the time in system of the first job, the second job...all the way down to the

last job-namely the 1,000th job. We'll add all those times together and divide by 1,000. What do we call that in basic statistics? It's called the sample mean of our observations. We'll denote that by "T-bar . T -bar as the sample mean will be used to estimate the average time a job spends in the system. How is our simulation actually going to work? It turns out that every simulation-whether it be of a manufacturing system, a computer system, a military war game or whatever-has a certain number of common components which we're now going to discuss. These components typically act by a certain set of pretty much standard rules.

Okay, let's see what the common components are in a simulation model. First of all is a system state. This is just a collection of variables that tells you where your system is at a particular point in time. Let's talk about some examples of state variables relative to our simple, single machine tool system that we discussed on the previous page. First of all, one of the things we have to keep track of is the status of the machine at any point in time. When I say status, I mean is it busy or is it idle? Why should we need to know if the machine is busy or idle at any point in time? Let's think of it this way. Let's suppose a new job walks in the door. What decision do we have to make here? Is the job going to be served immediately, or is the job going to join the queue? To answer that question, we need to the status of the machine at the moment when the part arrives. Is it busy or is it idle?

Another thing we have to keep track of is the number of jobs waiting in the queue to be processed by the machine. Why do we need to know that? Well, what happens when a machine finishes processing its current job? It needs to know if there is any more work to do. Is there anybody in the queue that can be taken from the queue and processed? Well, one way to answer that question is by looking at the variable number in queue. If the number in queue is positive then we know in fact there's a queue. The first job from the queue will be moved and the machine will start processing that job. Now, officially what we're talking about here is a particular type of simulation that is called discrete event simulation. And as such, you might think that word "event" is important since it's a part of the official title, so we'd like to define what we mean when we say event. An event is an instantaneous occurrence, which changes the state of a system. In our single machine tool example, there are two fundamental types of events: the arrival event and the departure event. Remember now, we're talking about something that happens at a particular instant and changes the state of the system. Why is an arrival an event? Well, let's analyze the two possible cases that can happen. Let's suppose that a part arrives and the machine is currently idle. In that case what happens? The status of the machine goes from idle to busy. So the state of the system is in fact changed by the arrival. And what is the other situation that can occur? The part arrives, finds the machine busy and so in that case the part must join the queue. The state variable, number in queue, is in that case increased by one. So in either case when an arrival occurs we have seen that the state of the system does in fact change. Now, let's also convince ourselves that a departure is in fact an event-it does change the system. Once again there are two cases to look at. We have the machine finishing processing a current part. First situation, let's suppose there's no one in the queue at that time. What happens? The state variable, status of the machine, will at that instant go from busy to idle because there's no work in the queue to be done. What about the other case? The machine finishes the current part and there is a queue of parts waiting to be processed. What happens then? The first job in the queue leaves the queue, comes up and begins being processed, and everybody else in the queue moves up one position. In particular, what happens? The variable, number in queue, is decreased by one to account for the fact that a job has left the queue. So, in summary when a departure occurs there are two situations and in both cases the state of the system does in fact change. Let me mention before moving on, a few more examples of events to give you a better perspective. The instant a machine goes down-that would be an event. The instant that a machine goes back up-that would be an event. Let's suppose that in the morning and perhaps the afternoon the workers take a coffee break. The instant that the coffee break begins

would be an event. And for that matter, the instant that the coffee break is over would also be an event. So let's suppose we have this really complicated manufacturing system and there could conceivable be fifty different fundamental types of events in this system. A question in modeling or simulating this system over time is, How do we guarantee that all these events occur in their proper time sequence?" Here's an arrival and here's a departure, and the arrival is supposed to occur before the departure; how do we guarantee that that in fact happens in the simulation? We have what's called an "event list." An event list is an array in which we will store the most imminent time of occurrence for each of the fundamental types of events that we've identified for our simulation model. For example, in our simple case where we have a single machine, our Event List is going to be an array with two elements. When will the next arrival occur, and when will the next departure occur? Next, the simulation clock: Every simulation model must know where it is in simulated time. For example, if we're simulating a factory for a forty-hour week, the simulation clock might say 13 hours and 5 minutes. That's currently 13 hours and 5 minutes into the desired simulation run of forty hours. The simulation clock tells you how far you are into your planning horizon. And finally we have statistical counters: Statistical counters are pieces of information that we collect during the course of the simulation so that in our particular case, we can get an estimate, T-Bar," of the mean time that a part spends in the system. Now, what are the two statistical counters for this particular situation? First of all we need to keep track of how many jobs have currently gone through the system? And, by the way, our stopping rule is when that number or that counter reaches 1,000 jobs having gone through the system, then the simulation will terminate. The other statistical counter we need is a running sum of the times in system of every job that has gone through the system. Why do we need these two statistical counters? At the end of the simulation, our one statistical counter will be the sum of all these times in system; that will be the numerator. Our other statistical counter will, in fact, be 1,000 -the total number of jobs that have gone through the system. We'll take this statistical counter, the numerator, divide by this statistical counter, the denominator, and that will give us T -bar-the sample mean of our data and our estimate of the mean time that a job stays in the system.

Before we actually use a numerical example to see what is happening inside of a simulation, I would like to give you a little bit of perspective as to how a simulation is operating, in general. In a typical simulation, we start out at time zero. We look into the future, and we determine when each of the different types of events will occur first: When will the first arrival be? When will the first departure be? Then we take the minimum of all of those future event times, and that represents the very first point in time where anything will really be happening in the simulation. So we advance our simulation clock, which was initially zero, to the time of the first event of any type. Once we get to the time of that first event of any type, then we update the state of the system in accordance with the fact that that particular event took place.