Process Simulation


Process Simulation, also known as Discrete Event Simulation, was first formulated in the late fifties and has since become the most widely used operations research methodology. The focus is on the simulation and optimization of complex-dynamic material flow systems and business processes together with analysis of system structure and behaviour, in order to obtain guidance for decision-making and strategy that is effective in the long-term. The preferred application area was, and remains, factory simulation. But other logistics systems such as distribution networks, storage facilities and supply chain systems can be modeled with Process Simulation. Nowadays, there is hardly a topic or an issue with material-handling systems where this modeling technique has not been successfully applied. In particular, management flight simulators for Executive Management have been established.

karosseriebau
Illustration of a model for car body production


Methodology

Process Simulation of a complex-dynamic system is characterized by modeling process logic and the flow sequences that are followed by units (entities) according to the decision logic. Through these logics and sequences, the entities carry out activities and operations, for example, access to resources. Process Simulation is based on a procedural view of the world. Process systems are characterized by a range of key performance indicators that are to be optimized, for example throughput time, resource utilization, queue size, buffer sizing, bottleneck analysis, and system throughput.


customer service
Illustration of a model for customer service


Classic questions of Executive Management

Typical questions of Executive Management that are addressed with the methodology of Process Simulation in real world entrepreneurial context are, for example:

  • Scenario analysis
  • Sustainability considerations
  • Validation of the design of a factory or warehouse
  • Validation of the design of a supply chain or distribution network
  • Support for planning processes in strategic and operational management, illustration and optimization of processes
  • Risk assessment for material flow systems
  • Robustness analysis of business processes


3D Model Factory-Simulation, Source: Thesys Group, www.arenasimulation.hu


Typical application areas of Process Simulation

Today, typical application areas for Process Simulation are, for example:

  • Factories and production of all kinds
  • Supply Chain
  • Warehouses and distribution networks
  • Airport design, cargo, rail, transportation
  • Hospital
  • Military
  • Call centers and business processes

Advantages of Management Flight Simulators

Simulation models that are based on the methodology of Process Simulation have the following advantages for Executive Management in increasingly dynamic future markets:

  • Holistic capturing and transparent presentation of highly complex decision situations in the strategy area
  • Avoidance of tacit misunderstandings by disclosing the different perceptions of different decision-makers
  • Development and simulation of business scenarios, customers and competitors to make uncertainty about the future tangible
  • Identification of the levers for value-enhancing corporate governance in the face of high uncertainty and risks
  • Modeling of alternative strategies and testing by simulation before implemention in the business
  • Evaluation of sustainable business strategies in the context of innovation (such as RFID, Logistics Green or alternative energy) and in competitive situations
  • Implementation of early-warning systems to indicate market changes, market position, to monitor strategic decisions and operational actions in real time
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