Balancing Process

Capacity
 Simulation Reflective Report- Balancing
Process Capacity

1. What strategy did you use in Challenge 1? Please discuss and refer to your
results.
2. What strategy did you use in Challenge 2? Please discuss and refer to your
results.
3. How challenge 2 is different to Challenge 1? Please discuss by referring to
your results.
4. How have the two challenges of simulation confirmed or changed your ideas
on capacity management? Think of real life situation – long lines/queuing –
easy, difficult?
5. What really determines process capacity? Please discuss by referring your
results and all relevant concepts. Research on capacity – cycle time
 Example
Simplified Car Wash
Assume this is the situation during most of the day

2 cars in queue

Drive In Car Wash Drive Out

Capacity: Average 20 cars/hr.

What is the “cycle time – increase?” [Average time between completion of successive unit
Eg: a vehicle exists the car wash every 5 min.
What is the “throughput rate - less?” [Average number of units processed per time unit]
Eg: the vacuum station can process 20 cars/hour.
What is the “throughput time - less?” [Average time a unit spends in the system]

Eg: Every car spends 15 minutes inside the car wash.

What is “work-in-process - decrease?” [Number of units in the system]
Eg: at any given time , five cars are being serviced
What is the “capacity utilization” for each station - increase?
Challenge 1: No variation
1. Constant demand
2. Fixed performance at the service stations

Capacity at the Stations only changes with Investment and is Fixed

 Throughput rate is determined
by the bottleneck(s) – how many
cars per hour can you complete

C D

A B

E
What is the “real” BOTTLENECK?
 “The Goal” - Herbie
– “A troop of Boy Scouts all walk in a line and
cannot pass each other.
– This is the notion of dependent events.
– The boys also walk at different rates. This is
variation.
– The leader of the Scouts tries several strategies to
keep them together, walk quickly, and not waste
energy”
 Strategies
– The first strategy is to just walk in random order.
The problem becomes that some boys go faster
than others and the line gets gaps between boys
in certain places and bunches of boys in other
places.
– The second strategy is to let the fastest boys go
first. The problem with this strategy is that they
spread out too much and the slow boys go even
slower because they have less incentive to move
faster”
Optimum Strategy: Put Herbie at the front
• Finally, they try putting the slowest boy at the front
of the line; this boy’s name is Herbie. In
manufacturing language, Herbie is a bottleneck.
• The line of boys now can only move as fast as Herbie
goes. This strategy starts working. All the boys give
Herbie encouragement to go faster. Herbie works
harder, but then he starts to tire.
• The boys realize that they need to relieve Herbie of
some of the things he is carrying so that he doesn’t
have to work so hard. They take his backpack and the
whole line starts moving faster “
 Capacity is
balanced across the
three stations at
37.5 cars/hr
 Little’s Law Performance

Optimal Investment Even Investment (Same at

all stations)

WIP = LT / CT = 19 min / 1.6 = 11 – 12 cars in the system

Class Results in Challenge 1…

les
xa mp
E

PROFIT – INVESTMENT TRADE OFF

 Challenge 1: Profit for Different Combinations of
Investment in $
$3,000,000 $830
$825

$820
$2,500,000
Car Wash Investment Spending

$810

$2,000,000
$800

Profit
$1,500,000 $790

$780
$1,000,000

$770

$500,000
$760

$0 $750
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Spending on Vacuum Spending on Machine Wash

Spending on Hand Dry Profit
Challenge 2: Variation
1. Variable Demand
2. Variable Performance at the Service Stations

Capacity at the Stations changes with Investment but is NOT Fixed

(e.g., more investment brings better machines with less variability)
 Arrival Rates in the Simulation
M in u te s B e tw e e n A r r iv a ls

1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
9 10 11 12 1 2 3 4 5
Time of Day

Challenge 2 (mins) Challenge 1 (mins)

Don’t be surprised if throughput rate is less
than the “capacity” of the bottleneck!

C D

A B

There
There isis aa difference
difference between
between
“Rated
“Rated Capacity”
Capacity” and and “Usable
“Usable Capacity”
Capacity”
 Why the Difference?
“Rated
“Rated The Curse of Variability
Capacity”
Capacity”
In manufacturing it is due to:
• Breakdowns and repairs
• Operator skill and experience
• Product and material variations
• Availability (arrival) of inputs
• Changes in schedule (setups)
• Rate of rejects and off-specs
• Etc.

“Usable
“Usable Similar reasons reduce effective capacities
Capacity”
Capacity” of service operations, too.
Will the strategy from Challenge 1
work in Challenge 2?
What is the Impact of variability on cycle time,
leadtime, profit?  What to do?
 What Strategy to Use?

The BOTTLENECK WILL START «MOVING AROUND»

DUE TO VARIABILITY…. LET´S VISUALIZE IT…….

This means different combinations of investment strategy

can lead to the same results… even more confusing!
 Challenge 2: Different investment options for the same profit
($675.00 and 270 Cars)
$3,000,000 1.750

$2,500,000
1.700

$2,000,000
Car Wash Investment Spending

1.650

Cycle Time (Minutes)

$1,500,000
1.600
$1,000,000

1.550
$500,000

$0 1.500
1 2 3 4 5 6 7 8 9 10 11

Spending on Vacuum Spending on Machine Wash

Spending on Hand Dry CycTime

Different combinations of investment strategy

leading to same results…!
Class Results in Challenge 2…

ples
m
Exa
 The OM Triangle
Slow High Inventory
(or long lead time)
Speed of response

M
or
eV
ar
ia b
ilit
“Extra” y Low
Fast
Capacity Variability

0.0 0.2 0.4 0.6 0.8 1.0

Capacity Utilization
There is a trade-off between Capacity, Inventory and Information of
Demand (Variability).