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Factory Performance Optimization

Methods and tools for continuous significant improvement of production and operations

SIMANDO is a global management and technology consulting firm with a high focus on decision support systems and operational excellence. We partner with client organizations in all industrial sectors to address their most important challenges and develop complete solutions that will enable them to achieve their objectives and make significant improvements in their performance. Our customized approach combines innovative technology, systems thinking and passion for operational excellence. This ensures that our solutions enable our clients to achieve sustainable competitive advantage by optimized operations and responsiveness to the current dynamic business environment. Founded in 2009, SIMANDO is a private company with its headquarters in Timisoara, Romania. For more information, please visit:


About SIMANDO Services and Products

Factory Performance Optimization Framework

Analytical Methods for Performance Analysis & Improvement Simulation in Manufacturing

Lean Six Sigma for Manufacturing

2011 3/35

Company founded in 2009 Privately owned, LLC Headquarters: Timisoara, ROMANIA Mission
At SIMANDO, our primary mission is to help our clients make substantial, continuous improvement in their performance. We accomplish this by providing them with outstanding technology solutions and consulting services to increase their excellence degree at all levels.

We strive to be the company that understands perfectly its clients' objectives, always delivers quantifiable results and maximizes the financial and trust investments made by its clients.

Our Certifications
Certified Six Sigma Black Belt (American Society for Quality)
Certificate in Finance (New York Institute of Finance)

Project Management Professional (Project Management Institute)

Oracle Certified Professional Java Programmer (Oracle Corporation)
2011 4/35

Modeling and Simulation

Operational Excellence

Systems modeling, simulation and optimization All simulation paradigms - discrete events, agentbased and system dynamics Statistics

Lean Six Sigma Transformation Design for Six Sigma Toyota Production System Theory of Constraints Product Development

Software Applications Development


Advanced algorithms and design patterns Software architecture Software development lifecycle methodologies

Project and product development management

Computer Integrated Manufacturing

Industrial engineering and factory planning Manufacturing, logistics, supply chain design

Functional and object oriented programming

Database Management Systems MRP/ERP Systems


Transport and distribution systems


Services and Products


Production, logistics, supply chain, healthcare engineering , modelling and simulation Operations optimization Lean Six Sigma/Design For Six Sigma training and implementation Training and assistance in simulation models development Product development and project management Computer Integrated Manufacturing


Modeling and simulation component libraries MANSIM - general manufacturing SOLSIM - photovoltaics manufacturing equipment LOGSIM - warehousing and logistics Specialized software applications for Lean Six Sigma, planning and scheduling



Factory Performance Optimization

Industrial Engineering Information Technology Factory Performance

Six Sigma



Theory of Constraints

Synergistic framework for continuous significant improvement of production and operations

2011 7/35

Factory Performance Leverage Points

1st Dimension
1st Dimension
Products and processes selection Factory location, size and layout

2nd Dimension Factory workstations and machines Factory personnel Material handling systems Supplies and spare parts inventory Degree of automation

2nd Dimension

3nd Dimension
Jobs starts protocol Preventive maintenance protocols Personnel allocation protocols Batching protocols Dispatching rules and scheduling Waste reduction programs

The 3 Dimensions of Manufacturing


3rd Dimension

Manufacturing Performance
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Factory Performance Indicators

Littles Law

Performance Curves
Cycle Time vs. Loading LACTE Profit vs. Loading 2(+1)1 (1 ) 1 1 +

P-K Equation
2 2 + 2

Propagation of Variability
2 2 = 1 + 1 2 1 +

2 1

Capacity Effectiveness
0 1 = 1
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Why Simulation ?

What? Where? Who?

When? How? Why?

The future is of greater interest to me than the past, since that is where I intend to spend the rest of my life. ~ Albert Einstein



2011 10/35

Simulation Study Types

Simulation Studies
System Design
New processes New facilities New concepts
Structural Design Elements Layout Logic Logical Design Flow logic Operations sequences Priority rules Parametric Design Cycle times Reliability requirements Velocities, rates Solution Validation Sensitivity analysis Plan Validation Sensitivity analysis Testing Schemes What-if scenarios analysis Test Plans Feasibility check

Problem Solving
Diagnosis Problem definition Solution finding
Diagnosis Problem definition

Continuous Improvement
Opportunity definition Performance measurement Performance improvement
Opportunity Definition Benchmarking



Simulation Benefits

Make prompt and correct decisions

Experiment and get fast feedback

Analyze the behavior of complex systems

Convince clients of your operational capabilities

Communicate ideas efficiently and credibly

Teach new concepts easily

Test fast, fail fast, adjust fast.

~ Tom Peters
Discover alternatives to unexpected roadblocks

Save money in short and medium term

Safely analyze dangerous scenarios

Implement your decisions with confidence

2011 12/35

Applicability Areas

Lean Six Sigma

Logistics and Supply Chain

Key Performance Indicators FMEA Production flow design Planning and scheduling Resource estimation Capacity planning Total cost of ownership

Stochastic process simulation Statistical analysis Variability elimination Pull mechanism design QOS metrics Dynamic VSM Benchmarking

Transport networks design Fleet planning & maintenance Warehouse design Operations optimization Supply chain planning


IT & Telecom

Urban Development

Resource estimation QOS Epidemics dynamics Operations optimization

Wireless networks topology Protocols design Agent-based emergent behaviour analysis QOS

Public utilities planning Evacuation plans creation Disaster recovery Anti-terrorist measures



How We Do It ?
Continuous improvement is better than delayed perfection. ~ Mark Twain
Problem formulation Objectives and plan definition Control Model conceptualization

Data collection

Your trajectory to success with simulation

Implementation Reporting

Model development Experiments run and analysis Code verification Model validation Design of experiments



Reusable models and components encourage continuous improvement!
Specialized component libraries

2D/3D customizable animation

Domain specific library components Fast and easy drag-and-drop layout modeling
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Simulation Models Input/Output Data


Run-time Charts






Simulation Model
Input Output Data Data








Simulation in Manufacturing

Creativity is thinking up new things. Innovation is doing new things.

Assembly line simulation model ( )

~ Ted Levitt

Simulation in Manufacturing
Optimal plant layout

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Simulation in Manufacturing
Detection and management of bottlenecks

120 sec 60 sec 120 sec

Rework Loop


120 sec 30 sec 120 sec

Rework Loop

60 sec 120 sec 60 sec 120 sec

Rework Loop



Simulation in Manufacturing
Equipment ROI Calculation
Golden Equipment
Cycle Time ....... 30 sec MTBF_1 .. 5000 hrs MTTR_1 ........ 1 hrs MTBF_2 7500 hrs MTTR_2 0.5 hrs Yield . 99.6% Energy . 10 kWh Price . $1,500,000

Silver Equipment
Cycle Time ....... 60 sec MTBF_1 .. 4000 hrs MTTR_1 ........ 2 hrs MTBF_2 8500 hrs MTTR_2 3 hrs Yield . 98.9% Energy . 8 kWh Price . $850,000

Bronze Equipment
Cycle Time ....... 80 sec MTBF_1 .. 5000 hrs MTTR_1 ........ 1 hrs MTBF_2 8000 hrs MTTR_2 2 hrs Yield . 97.2% Energy . 14 kWh Price . $450,000



Simulation in Manufacturing
Total Cost of Ownership
= ($)

($) = ($) + ($) + ($) + ($)

Where: F ($) = fixed costs for purchasing the system L ($) = fully burdened labor cost R ($) = recurring costs (consumables, maintenance, specialized support etc.) Y ($) = yield loss cost

($) = ($)
Where: N = number of defective product entities P ($) = value of the product entities in the specific production stage
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Simulation in Manufacturing
Total Cost of Ownership
Where: L = lifetime of the production system T = throughput rate Y = composite yield U = equipment utilization Where: SM = USM = A = S = Q = H =

scheduled maintenance unscheduled maintenance assist time standby time qualification time total number of scheduled production hours per week

+ + + + =

Simulation in Manufacturing
Total Cost of Ownership
= $ + $ + $ + ($)

All variable/probabilistic elements in the formula can be tracked and calculated by simulating realistically the system under study.

Due to variable costs and probabilistic events associated with complex production systems, only simulation-based methods of calculating the TCO can provide correct and accurate estimates therefore.



Simulation in Manufacturing

Detailed modeling of components and manufacturing scenarios Accurate timing and behavior of the modeled systems Manual work, worker-machine and fully automated manufacturing modeling possibilities Any type of production environment: jobbing, intermittent, mass production Resources behavior controlled by highly detailed state machines according to machine specs Any type of Key Performance Indicator can be defined and tracked Ramp-up scenarios analysis

Inbound/outbound logistics and supply chain analysis and integration

Declustering of job starts and maintenance Load management scheme design



Simulation in Manufacturing
Line balancing and materials handling

Dispatching rules:

critical ratio, shortest processing time, FIFO, due date, etc.

Conveyors vs. Automated Guided Vehicles vs. Humans Material flow optimization

Buffers capacities & policies (FIFO, LIFO, FEFO, custom)



Simulation in Manufacturing

Lean manufacturing speed and quantity control and Six Sigma quality Simulation offers support in finding solutions to reduce:

Transport time
Inventory and buffers Employee motion Waiting Overproduction Defects
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Simulation in Manufacturing

Optimization of Key Performance Indicators

Work in process (WIP) Load-adjusted cycle time efficiency Manufacturing lead time Equipment cycle times Queuing, blocking, waiting, transport time Throughput

Equipment and human resources utilization

Energy, consumables, spare parts, waste Spares and supplies inventory levels and variability



Simulation in Manufacturing

Design and optimization of complex equipment

Utilization, throughput, cycle time for cluster tools Equipment with M:N mapping of process resources to handling units Optimization of handling units movement and process resources allocation
Process Chamber Process Chamber Process Chamber Process Chambers

Multiple handling units on the same rail Process Chamber

IO Ports

Process Chamber

Process Chamber
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Simulation in Manufacturing

Production planning and scheduling



Production Planning



Simulation in Lean Implementation

Static Value Stream Map

Nature does constant value stream mapping it's called evolution.

~ Carrie Latet

Dynamic Value Stream Map (Simulation)

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Simulation in Lean Implementation

Single piece flow vs. batch processing analysis Kanban (pull) mechanism design Production leveling (heijunka) Cycle, safety and buffer stocks calculation Just In Time (JIT), Just in Sequence (JIS) inventory strategy design Cellular operations design Overall Equipment Effectiveness (OEE) calculation Relation between demand and takt time analysis
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Simulation in Lean Six Sigma


Define Project Scope

Define Lean Measures

Define Structure and Variables

Analize Improve Control

Develop Current State VSM

Develop Simulation Model

Develop Dynamic VSM

Identify Sources of Variation and Waste

Develop DOE Plan

Run Simulation Experiments

Analyze Process Flow

Optimize Process Parameters

Apply Lean Techniques

Validate Improvement

Develop Future State VSM

Develop Control Strategy

Test Control Plans

Implement Control Plans

Monitor Performance Over Time

Simulation-based Lean Six Sigma Project Roadmap

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Design For Six Sigma

Cost vs. Impact Cost

Potential is positive (Impact > Cost)

Potential is negative (Impact < Cost)


Time Design Produce/Build Deliver Support

Impact of design stages on life cycle

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Simulation in Design For Six Sigma


Simulation-based DFSS Project Roadmap

Model building

Data collection Simulation model


Verified ? Yes

Optimize Validate


Valid ? Model analysis

Conclusions and reporting


Thank you for your attention!

9 Republicii Blvd Timisoara, TM 300159 ROMANIA Tel: +40 356 172 021 Fax: +40 356 172 017 E-mail: Web: