Fifteenth Annual IIE/Rockwell Automation Simulation Contest

Manufacturing Madness: Simulation Experts Needed to Improve

Highly Variable System

Company Background
This year’s contest is particularly exciting. Instead of challenging you with a fictitious
problem, we have partnered with a Fortune 500 manufacturing company to bring you real
issues with the hopes of delivering the plant management team your real solutions! We
apologize for the generality of the details, but for confidentiality reasons, data, products
and processes have been changed and masked. We can tell you that your favorite
products from snacks to cell phones are brought to market with much help from this
company.

The objective for your team is to use Arena simulation software, coupled with Industrial
Engineering methodology to suggest improvements that will reduce manufacturing costs
and meet customer demand. Note that the facility under study is located only a couple
hours from the company headquarters. You are officially consultants on the job and plant
managers are excited to hear and implement your recommendations!

Product Description: Sections

The facility you are evaluating produces sections with units that are inserted into the
sections. Figure 1 is a picture of what an assembled section might look like. The section
depicted has 2 units. Section configurations can vary. A single unit may occupy the
entire section. At most 12 unique units can occupy a single section. Each unit contains
custom parts configured for different functions. Maybe think of the sections as
refrigerator freezers. Some customers want 1 giant refrigerator custom to hold 1,000
beverages. Other customers want 12 freezers equipped to hold 500 gallons of ice cream.

Figure 1: Section with 2 units

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Current System Overview
Sections are assembled in one of two areas; Cell A and Cell G. Both cells have the
capabilities to produce any section. When an order is released into Cell A or Cell G,
everything for that order is produced in Cell A or Cell G, respectively. Cells currently do
not share worker, tasks, equipment, etc. Figure 2 provides a layout of Cell G. Figure 3
provides a layout of Cell A.

Final
Assembly

Section Shell
Assembly

Line for Unit

Build

Figure 2: Cell G layout

Section Shell Lines for Unit Final

Assembly Build Assembly

Figure 3: Cell A layout

Cell G and Cell A each contain a section assembly area where the section shells are
constructed. The assembled section shells are empty and built to hold their
corresponding units depending on the customer specifications. Section shells are set

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aside until all units are ready. On separate assembly lines, the unit inserts are built and
tested. Section shells and units come together at the final assembly area. So, when a
section shell is ready, and all the unit inserts are available, final assembly, wiring and an
inspection takes place.

At a high-level, the overall process flow is depicted in Figure 4. The assembly of the
section shells and the unit assembly are taking place at the same time. All parts come
together at final assembly. Read on for more about the details of each area.
Section Shell
Assembly Final Assembly
(Section Shells +
Units)
Unit Assembly

Figure 4: Assembly flow

Cell A receives custom engineered orders. Cell A contains 1 section assembly area, 4
unit production lines as well as a final assembly area for final assembly, wiring and
inspection. Cell G only receives pre-engineered orders. These orders contain standard
section configurations and units. They typically have a faster production cycle time than
Cell A sections. Cell G contains 1 section assembly area, 1 unit production line as well
as a final assembly area for final assembly, wiring and inspection.

The facility operates 252 days per year with 15 working hours per day (not including
overtime, lunch and other breaks). Since operations are highly manual, labor expense is a
big concern to the plant. Currently, about 20% of the total hours worked is overtime. All
workers earn a base pay of $30 per hour. Workers get paid 150% their base pay when
working overtime.

The plant managers primarily track the completion of sections. As long as sections are
being completed the order will also be completed. Sections are not cheap either. The
average sale price per section is $8,250.

The total forecasted demand per year is 20,000 sections. Demand could swing 20%
above of below this figure. 15% of the demand are what the plant calls “structural” and
are not of concern for the model. The sections that are not considered structural are
produced in Cell A or Cell G. It is expected that 70% of the remaining demand will be
for Cell A. The rest will be produced in Cell G.

Section Assembly
Producing the section shell is the first step in the assembly process. Section assembly is a
manual process. Assembly workers receive the section orders that need to be produced
and the corresponding configuration. Section assembly is a progressive build through 5
workstations. The first two stations each have one operator and work on one section at a
time. When the operator at station 1 has completed its task the section is passed on to
station 2. The operator at station 2 works on the section and passes the section on to
station 3. The assembly at station 3 is a little more complicated. Here two workers might

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work on 1 section or start assembling multiple sections together. Sections can be in
groups of 2, 3, 4 or 6. A group of sections is referred to as an item. Table 1 provides a
breakdown of the number of sections in each item. Figure 5 depicts 2 items. Item 1 has
3 sections and Item 2 has 2 sections. Each time a section arrives to station 3 there is
some work to be done on the section. When the next section in the item arrives, the
workers do additional work on the new section and part of that work is combining the
sections. This process continues at station 3 until all sections in the item are secured
together. Then the item moves on to station 4 and 5. Station 4 and station 5 each have 1
operator and process the item as a whole. The entire section assembly area has the
capacity for 9 workers, but is currently not at capacity.

Percent Likely
Items with 1 Section 10%
Items with 2 Sections 30%
Items with 3 Sections 30%
Items with 4 Sections 20%
Items with 6 Sections 10%
Table 1: Breakdown of item configurations

Section Section Section Section Section

Unit

Unit Unit Unit

Unit

Unit Unit Unit Unit Unit

Item Item
Figure 5: Items

Prior to the section build, parts needed for the assembly are gathered and delivered to the
assembly area. Most of the time parts are available and ready prior to the build. About
4% of the time, parts are missing to complete the build in Cell G and Cell A. If all the
parts are not available, the assembly workers will begin the build of the next order in the
queue. When parts are missing, it typically takes 5 days until the issue is resolved and all
the right parts are ready. Sometimes it only takes a day as the plant might have the right
parts on-hand. At the most it will take 30 days until all the missing parts are ready. Once
all parts are available the section order is put at the front of the queue. There is also an

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issue with the wrong parts arriving for assembly. 3% of section builds have the wrong
parts in Cell A and Cell G. This is discovered during the build. When a wrong part is
noticed, the assembly worker sets the section aside and sends for the correct part. The
time for the right part to arrive is typically 2.5 days. At the most it will take 30 days for
the correct parts to arrive. At the least it will take 1 hour. Once the correct part arrives,
workers will finish the assembly.

Table 2 contains the estimated processing times for each station.

Processing Time (min)

Station 1 (per section) Tria(5,10,13)
Station 2 (per section) Tria(5,7,13)
Station 3 (per section) Tria(8,10,13)
Station 4 (per item) Tria(8,15,20)
Station 5 (per item) Tria(5,20,120)
Table 2: Processing times at each section assembly station

Once the section is complete, the sections are moved to the final assembly area. The
section work in process (WIP) is of concern to the plant. There is limited space to hold
sections before final assembly. If there is no space, the section assembly workers will
hold off on making additional sections. Cell A has buffer space for 20 sections. Cell G
has buffer space for 5 sections.

Figure 6 depicts assembled empty sections. You can see there are 3 sections in the item.
From left to right, the first section has room for 5 unit inserts, the second section has
room for 6 inserts and the third section can house 5 unit inserts.

Figure 6: 3 assembled sections shells

Unit Assembly and Unit Test

For each section there are a specific number of units that need to be built. Sections will
contain anywhere from 1 to 12 units. Usually, there are 4 units per section. When a
section order is released to the plant floor, the corresponding unit orders are released as
well. Similar to the section build, the parts for the units are pre-kitted, ready and
available at the build station. Unfortunately, 100% of the parts are not always in the kits.

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Plant management has been tracking the percentage of unit insert kits that have all their
parts (also referred to as clean kits). Graph 1 contains this data for Cell A and Cell G.

Weekly % of Clean Unit Inserts

120%
100%
100%
86%

80% 75%
71%
65% 67%
% Clean

63% 64%
60% 51% 50% 52%
44% 47% 46%
41% 41% 40%
40% 35% 35%
31% 31%
26% 25%
19% 19% 20%
20% 10%
6% 5%
0%
0%

5
k1

k2

k3

k4

k5

k6

k7

k8

k9

k1

k1

k1

k1

k1

k1
ee

ee

ee

ee

ee

ee

ee

ee

ee

ee

ee

ee

ee

ee

ee
W

W
Cell G Cell A Linear (Goal)

Graph 1: Percentage of clean unit inserts

If a unit is not clean and parts are missing, they will not assemble the unit and select the
next unit in the queue. It will take anywhere from 1 day to 30 days for the missing parts
to arrive. Usually it takes 5 days. There is also an issue with the wrong parts arriving
for unit assembly. 3% of unit builds have the wrong parts. We will assume this is
discovered prior to the build. The time for the right part to arrive is typically 2.5 days. It
can take as much as 30 days and as little as 1 day. Once the correct part arrives, the unit
moves to the front of the queue and is assembled. Another disruption to the unit build is
engineering changes. As mentioned, the units are highly custom and engineered. In a
perfect world, the design of each unit is complete come production start; however, 10%
of units built will have engineering changes. It typically takes, 24 hours until the
engineering change is complete and all the right parts are ready to complete the build.
This is the least amount of time it will take to resolve the engineering change. At the
most it will take 3 days to complete. The engineering change is usually identified before
the build. It is important to note that if a unit has missing parts, the wrong parts or an
engineering change, the order that the unit belongs to will not begin the assembly process.
A major issue for the plant is pacing the sections and the units that feed the final
assembly area.

Cell G contains one line for unit assembly. Cell A contains 4 lines for unit assembly.
Units are typically assembled on a first come first serve basis. In Cell A, each line has a
dedicated group of workers. It is important to note that all unit inserts for a particular
section are assembled on the same line. Racks containing kits for each unit are located at
the front of the assembly lines. When a worker is available, they select a kit from the

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rack. Prior to actual assembly, they do a quick set-up to ensure the appropriate tooling is
ready. Next, they assemble all components and complete all wiring for the unit.
Completed units are then tested. 90% of units pass testing. A separate rework bench
exists at the end of each line. When a unit fails inspection, it will be sent to the rework
bench and worked on by a dedicated re-worker. Each line has a dedicated re-worker.

Units have varying levels of complexity. Consequently, the build times have a high
degree of variability. There are 4 levels of units based on their processing times. Table 3
provides the breakdown of each of the levels through the cells as well as the
corresponding processing times. The build times are pretty evenly distributed in the
ranges provided.

Cell A % Cell G % Build Time Test Time Rework

Unit Type Breakdown Breakdown (hrs) (hrs) Time (min)
Level 1 30% 45% .75 -1.5 0.15 - 0.3 5 – 30
Level 2 53% 55% 1.6 - 4 0.15 - 0.3 5 – 30
Level 3 14% 0% 4.1 - 7 0.15 - 0.3 5 – 30
Level 4 3% 0% 7.1 - 13 0.15 - 0.3 5 – 30
Table 3: Cell A and Cell G unit build, test and rework delays

Once every 2-3 weeks, Cell A gets a batch of Level 4 units that need to be built. These
events significantly impact the production for Cell A. Section WIP increases
significantly because unit production has decreased. Managers want to evaluate options
to handle these events. The possibility of a fast track assembly line for shorter unit builds
has been suggested.

Workers in Cell A are organized into 4 teams, one team for each line. The capacity of
each line is dependent on the number of work stations with the appropriate tooling for
assembly. Currently each line is at capacity with 12 workers per team. The Cell G unit
insert line has the capacity for 22 workers per shift and is currently at capacity.

The testing stations at Cell A and Cell G also have dedicated test persons. The current
scheduled testers and corresponding capacity is provided in Table 4. Testers are shared
between lines in each cell.

Cell A Capacity Cell G Capacity

Unit Testers 3 4 2 2
Table 4: Cell A and Cell G unit testers

Final Assembly (includes final assembly, wiring and inspection)

Section shells and their corresponding units come together and are assembled in the final
assembly area. When all units for a section are completed and tested, they are ready to be
inserted into the section. Final assembly is completed on a first come first serve basis
when all parts are available. Section doors and additional components are also needed
for the final assembly. You can assume these materials are present and available. Once
the units are assembled, a wiring expert completes final wiring tasks. A final inspection
of the entire section takes place following the wiring process. There is a 10% chance that

CONFIDENTIAL 7
a system fails the final inspection. 80% of the failures are due to wiring. The rest are
general final assembly errors. Depending on the failure type, the appropriate worker will
rework the section as soon as they are available. Raw data for rework time is provided in
data.xls. The processing time for sections through the final assembly area is also
provided in data.xls. Table 5 contains the percentage of the total final assembly process
(final assembly, wiring and inspection) time spent on each task.

Cell A Cell G
Final Assembly 60% 85%
Wiring 30% 5%
Inspection 10% 10%
Table 5: Percent of total final assembly time spent on each task

A single person from a team of final assembly workers completes the final assembly task.
The wiring work requires a highly skilled expert from a team of wiring professionals.
Final inspection is completed by a worker from a pool of final inspectors. The current
number of final assembly, wiring and inspection workers is provided in the Table 6.

Cell A Capacity Cell G Capacity

Final Assembly 5 infinite 5 infinite
Wiring 8 infinite 8 infinite
Inspection 2 infinite 2 infinite
Table 6: Cell A and Cell G final assembly, wiring and inspection workers and capacity

Outputs
There are several key performance measures that management tracks. The file, data.xls
contains a dashboard about 40 days of key metrics for Cell A and Cell G.

Adjusted Total Hours- Total hours for assembly processes including section builds and
unit builds.
Section Shells Completed- Total section shells that were built for the day.
Sections Completed Through Inspection- Total sections complete with unit inserts and
through final assembly, wiring and inspection for the day.
Total Units Completed- Total units completed.
Units Waiting 4 Testing- Total units completed and waiting for testing.
Total Units Tested- Total units built and tested.
Adjusted Total Hrs/Sect- Assembly hours per section.
Section Hours- Total direct labor in section department.
Unit Hours- Total direct labor in the unit assembly department.
Unit Test Hours- Total hours spent on board testing.
Total Final Assembly Hours- Total final assembly hours. Includes installing doors,
labeling, wiring and inspection.

Producing sections to meet demand, while maintaining manufacturing costs, is the

primary goal of the plant. Evaluating section and unit work in process (WIP) is also
critical. The plant is challenged everyday with pacing the plant. Making sure the
sections and units are ready for final assembly is critical to meeting production goals.

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The plant must also monitor time spent on system failures; waiting for missing parts,
waiting for wrong parts as well as engineering changes. These non-value added delays
have a significant impact on the system.

Scenarios
What should the capacity be to meet the demand? Sounds like an easy question, right?
The plant management is constantly addressing this issue. Variability in demand, system
failures, labor variations and order complexity, among other things, makes this question
extremely difficult. Simulation is really the only tool that can capture all the dynamic
and variable pieces of the system to understand how changes will affect performance.
Several “what if” scenarios have been proposed:
• The plant has often considered combining Cell G and Cell A production areas.
After all, each area has the capability of producing any section. There are a
couple combination configurations that the plant would like to evaluate.
o First, they would like to understand if they can operate all Cell A and Cell
G production with the existing capacity of Cell A. In this scenario, there
would be 4 unit production lines. One would be dedicated to Cell G
production and 3 would be for Cell A production.
o A second scenario the plant would like to model is a single queue for
orders on one of 4 lines. All units for a particular section are still handled
by the same line, however, the allocation Cell G units are not dedicated to
a single line. Your team must pay special attention to the selection of
units out of the queue. Is the best selection rule first in first out from the
queue?
• Resource labor is a major expense for the plant as the processes are highly manual.
Management is always concerned with overtime. The plant would like to
understand the optimal labor at each process to meet demand while maintaining
costs.
• Are there other scenarios that your team thinks might benefit the operations?
Plant management is open and encourages additional plant improvement
suggestions. Creative and realistic solutions might result in a real-world
implementation!

The plant managers will be carefully reviewing the final reports and recommendations.
Have fun and everyone is looking forward to your feedback.

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