What is simulation and why is it used for process improvement?


Simulation is a powerful technique for optimizing processes and making confident, evidence-based decisions.

Learn why organizations around the globe use simulation software like SIMUL8 to increase efficiency and reduce costs.



How does simulation work?


A simulation is an animated model that mimics the operation of an existing or proposed system, like the day-to-day operation of a bank, running an assembly line, or assigning staff in a hospital or call center.

Using intuitive simulation software like SIMUL8, you can build a visual mock-up of your process, similar to creating a flowchart. By adding timings and rules around the tasks, resources and constraints that make up your system, the simulation can accurately represent your real process.

Simulation offers a powerful, evidence-based approach to decision making - by using a virtual representation to test the impact of process changes and 'what if' scenarios, you can find an approach that delivers the best results.

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"Simulation does exactly what it says. It mimics what happens in real processes.

For example, if you take a customer in a store when they reach the checkout and all the likely behaviours - whether a server is available or busy, if there's a queue of five people - by adding more customers to the simulation, you can then see what will happen on a busy Saturday afternoon.


You can then determine how many staff to employ, and quickly you'll even find you can predict the behaviour of a huge supply chain of hundreds of factories, each with thousands of product lines and employees.

By mimicking the behaviour of each part of the process as it interacts with other parts, you can understand how the whole system will perform and try alternative ways to provide resource capacity or innovative ways to improve performance."


Mark Elder, Founder
SIMUL8 Corporation

Key features of simulation


Visual and interactive

Visual and interactive

Simulation is visual and animated, allowing you to easily see what’s happening in a process as time progresses.

It’s also interactive, so you can quickly adapt it in any way that you might consider changing the real process.


Time based

Time based

As simulation can run through time much quicker than real life, you can simulate days, weeks or years of a process in seconds.

This enables you to evaluate the long-term consequences of any changes and decisions you make.


What if scenario testing

'What if' scenario testing

Simulation allows you to compare different configurations under the exact same circumstances.

By testing different ideas, you can choose the approach that will provide the best performance for key metrics in your process.


Matches reality

Matches reality

Unlike other process analysis methods, simulation includes variability to reflect real life and improve accuracy.

For example, contact center calls arrive in peaks and troughs, rather than evenly throughout the day or week.


What can be simulated?


As a general rule, systems that involve a process flow with events can be simulated – so any process you can draw a flowchart of, you can simulate.

The processes you'll gain most benefit from simulating are those that involve change over time, variability and randomness.

For example, at a gas station nobody can guess exactly which time the next car will arrive, whether that customer will decide to purchase gas only, or how long they’ll take to make a purchase. Modeling complex dynamic systems like this effectively by any other method isn't possible.


What challenges can simulation help solve?


Determine the impact of changes on KPIs

See how process changes impact performance metrics such as throughput, cost, utilization, service time and more.


Assess return on investment

Evaluate the return of process changes, new technology or staff, before investing time and money.


Understand variability

Identify the potential impact of real world variability and uncertainty on system performance.


Plan and validate new processes

Plan and design new processes and validate assumptions before implementation.


Identify problems with processes

Highlight where bottlenecks and constraints are occurring to improve process efficiency.


Build project buy-in

Engage stakeholders using a visual and interactive approach to building a business case.

What are the benefits of using simulation?


Simulation is less costly than real life experimentation


Experimenting in the real world carries a range of potential costs. There’s not only the capital expenditure of changing process, hiring new staff or purchasing new equipment, but also costs associated with the consequences of these decisions.

For example, if you reduce staffing, but can't then cope with the workload, you could lose customers, revenue and market share.

By thoroughly testing changes with simulation ahead of implementation, you can avoid costly mistakes. Many of SIMUL8 Corporation’s customers have seen return of investment in millions of dollars.


Test different ideas under the same circumstances


When testing changes in real life, it's difficult to repeat the exact circumstances so you might only get one chance to collect the results of an experiment.

This means you can’t easily test different ideas under the exact same circumstances and as a result, you might not get accurate information to base important decisions on.

With simulation software, you can test the same system again and again with different inputs, ensuring that any changes to processes have been thoroughly tested.


Determine the long-term impact of process changes


Although process changes may have an immediate impact in the short-term, how can you be sure that changes will also have the desired impact for the long-term?

For example, if you are hiring three more doctors with the aim of reducing patient waiting times over the next two years, you would normally need to wait two years to measure the success against investment.

With simulation, you can run two, 10 or even 100 years into the future in seconds. This provides insight to make confident decisions now, instead of when it could be too late to change the outcome if you have already invested valuable time and resources.


Simulation provides impartial insight to facilitate process improvement


Often the benefit of a simulation project comes not only from the end results of the project, but from the exploration between the start of the project and the point of getting answers to make a decision.

For example, if you ask 20 people at the start of a process improvement project, “what do you think would be the best way to improve the process?”, you could hear 20 different answers!

The value of visual and measurable tools like SIMUL8 is the ability to gain impartial insight that facilitates quality process improvement.


Determine the potential impact of random events


Other tools, such as spreadsheets, can effectively model a static scenario but what happens if you need to determine the potential impact of random occurrences throughout your system, like the effect of a machine breaking down on an assembly line, or staff absence in a hospital?

Without this random element, spreadsheet models can miss issues within the system entirely and appear as if nothing is wrong - even when the real-life system is displaying visible problems like blockages or queues.

Only simulation is capable of incorporating the randomness that occurs in real-world systems, so you can see the consequences of events being delayed by resources not being available when they are needed.


Utilize non-standard distributions


Most other techniques often force you to describe a situation approximately e.g. "it takes an average of five minutes to serve each customer". In real life this isn't the case.

It could take three minutes to serve the customer if they have four items and take seven minutes if they have 20 items. Approximating means that metrics like staff utilization and customer waiting times become inaccurate.

Simulation individually mimics every customer (or other type of transaction) that flows through the process, with the attributes that make them differ from other customers, including attributes that only occur because of how they flow through the process. By taking these into consideration, simulation behaves just like the real world.


Simulation guides thinking around processes


Simulation helps you to think about every aspect of a process. By mapping each part of the process to build a simulation, this can bring any inconsistencies and inefficiencies to the surface, particularly between different parts of a process that work independently.

As there is no limit to the degree that you can try innovative ways to improve processes, you can quickly come up with many more ideas to test and measure as a result.

Sometimes the simulation doesn't even have to be finished, the thinking it encourages can help to reveal the solution!


Improve stakeholder communication and build buy-in


As simulation is visual and animated, it enables you to clearly demonstrate the benefits of process improvement proposals to others.

It's more convincing than just displaying the end results, as stakeholders can see the process behind the results and changes that were made to help achieve them.

As stakeholders can easily understand the process changes, they also become more engaged and involved in the process, further increasing project buy-in.

As a result of this improved communication, simulation can speed up the evolution of thinking and a project can change direction to focus on what your organization or team really needs to know, rather than what they thought they wanted to know at the start of the project.

Simulation is so effective at communicating ideas that many companies, such as manufacturers and pharmaceutical suppliers, also use it as a sales tool to showcase the benefits of their products.

Why use simulation over spreadsheets for process modeling?


For process improvement analysis, simulation software offers an extensive range of benefits.

Learn more about the specific benefits of using simulation in comparison to spreadsheet-based methods.


View the guide

Simulation case studies


Simulation can be used in any industry to improve processes, reduce costs and increase efficiency. Read about the organizations already seeing the benefits of simulation with SIMUL8.


Chrysler

Fiat Chrysler improved manufacturing throughput by 39 units and increased revenue by $1,000,000 per day at its Brampton plant.


Read case study

Memorial Health System

Memorial Health System improved patient waiting times and ensured the feasibility of a $31 million operating room expansion.


Read case study

Virginia DMV

Virginia DMV identified a staffing model to reduce customer waiting times to 20 minutes or less across 74 customer service centres statewide.


Read case study

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