Improve plant operations with simulation and find more factory inside your factory

Ecommerce bringing in more business is a good thing, until it isn’t. To prevent your production lines going down from too little maintenance or your employees burning out from too much overtime, you need a plan to bring capacity online without breaking the budget.

Recently, a client approached us to review their manufacturing operations and find the bottlenecks holding back their production capacity. The client, a domestic manufacturer in the home décor sector, struggled to keep up with growing retail demand. Stockouts were high, and labor was approaching burnout due to six straight months of mandatory overtime. The client engaged NTT DATA to perform an onsite assessment of production operations to increase plant throughput. Current demand required an immediate increase in production volume if the company had any hope of keeping up. Further increases were needed to ramp up for future growth and cut overtime.

When seeing it in your mind’s eye isn’t enough

Along the way, the client asked about “envisioning” the future state of operations. We assessed their operations, defined the gaps, identified the solutions and developed a roadmap to the future. While it’s typical to build custom models to quantify changes, validate results and develop a business case, the company wanted something more concrete and visual. So, we reached into our tool bag and pulled out something we’d employed before — simulation.

Our team walked through the plant, interviewed key individuals and observed each line individually. This discovery phase yielded important information on operations, which we documented, diagrammed and resourced. It helped us understand the flow of materials, the technology driving the lines, and the mechanical and manual production resources. After that, we began preliminary construction of a line- and work-center-level simulation model. We reviewed all steps in the manufacturing and materials processes, from suppliers’ goods hitting the back of the plant through finished goods moving out the front door. Some of the critical operational factors we analyzed included:

• Line speed, SKU and packaging variations
• Manual vs. automated processes or steps
• Labor requirements
• Timing of all steps in the process
• Batching logic

How to create a simulation in three steps

1. Build a baseline simulation model. For this client, we examined nine of the plant’s manufacturing lines. Then, we incorporated Microsoft Visio diagrams and time studies. We used Simio modeling software to build baseline simulation models. Next, we verified the models by running current production scenarios, achieving similar throughputs and costs as shown in plant operation financials.
2. Change model parameters to represent possible business conditions. After building and validating the baseline, challenge your team to come up with as many variations as your timeline allows. For example, should you:
   • Speed up production lines? 
   • Add labor per line or entire additional shifts? 
   • Add a different flow path? 
   • Expand sections of the line to increase throughput in the same footprint? 
   • Change line layouts? 
   • Flow materials to the lines differently? 
   • Employ accumulation areas? 
   • Alter schedule sequences and changeover routines? 
3. Rate and compare different scenarios and define the desired outcome. Assess your business needs and develop a roadmap to take your organization to that sought-after future state.

Is it possible to increase plant capacity by 30%–40%? 

After reviewing the results, the answer to that question was staring right at us. Instead of a substantial investment in another plant to achieve their growth objectives, the client developed a multi-year phased plan for improvement that would meet their goals. The first phase captured benefits that required little capital but provided a 20% improvement in capacity. Eventually, with an additional couple of years and a reasonable amount of capital investment, the client had a clear path to a 100% capacity increase within the confines of its existing facility.

— By Patrick Boyle