Process Simulation Software:

Getting the Most Out of Your Process

by Elizabeth R. Larson

For anyone planning to use process simulation software, the end results can be very rewarding in terms of process improvement, shortened cycle times and cost reductions.

o longer the domain of specialized consultants and experts, process improvement has evolved into a business practice mainstay and day-to-day necessity. It covers many areas, including quality, productivity and improvement measurement, and businesspeople in all industries are finding it useful for total process and performance improvement.

Perhaps process improvement’s most important and powerful tool is process simulation software. It offers users a method for understanding and monitoring current process performance as well as the ability to test improvement solutions before implementation. With a number of software packages currently available, potential buyers should know how to select the software that best suits their needs.

Process simulation packages notably include “what if” analysis, a unique feature that allows users to explore the potential impacts that process changes could cause. By evaluating potential improvements before implementation, organizations can avoid pitfalls and anticipate real-world problems to get the most from revamped processes.

For organizations planning to use process simulation software, the end results can be very rewarding in terms of process improvement, shortened cycle times and cost reductions. However, though their user-friendly designs make them more or less understandable to nontechnical staff, these packages offer different capability levels. Before choosing a package, make sure it fits your organizational needs. Request information from process simulation software companies, visit Web sites and query current and former users. These can all provide excellent information and offer insight not only about using the software but determining what they offer for different processes.

     This article looks at two software packages currently in use at two very different companies. Thiokol Corp., located on the northern shore of Utah’s Great Salt Lake, develops and produces high-technology solid rocket motors for aerospace, defense and commercial launch applications. It uses ProModel Corp.’s ProcessModel to tackle the question of where its process bottlenecks are occurring. Eli Lilly and Co., a pharmaceutical manufacturer based in Indianapolis, chose the Optima! process simulation software package from Micrografx to test various situations for which it wanted to be prepared.

Thiokol Corp. rejuvenates its patent process

Thiokol Corp. turned to simulation software to improve processes in its intellectual-property law department, which oversees trademarks, copyrights and trade secrets for the company’s propulsion division. The company sought to shorten the long delay that existed in processing inventions and acquiring patents from the U.S. Patent and Trademark Office.

“It can take months,” explains James Ekstrom, manager of Thiokol’s intellectual property department. “If you’re trying to get a technology to the marketplace, you want to get it protected as quickly as possible.”

For Thiokol, the trademark process begins when an inventor submits an invention record to the intellectual property department. A patent application is then given to the division heads for approval. Outside attorneys write the patent and prosecute it before patent office authorities. Patent office examiners then review the application and return it to the company for rebuttals. The company replies and, if all goes well, the application returns as a patent. This entire process can be quite expensive: Ekstrom estimates fees range between $25,000 and $30,000.

“The software allows you to do activity-based costing, where you can put costs in for each of the activities and then keep a running tab as to what those costs reach in the entities that are processed,” says Ekstrom. “A nice feature is that it runs behind Micrografx’s ABC FlowCharter. When you draw out a flowchart, the simulation engine runs behind it, allowing you to animate and simulate the flowchart    element.”

To help users capture activity-based costing, the software asks them to plug in certain resource variables -- number and types of people involved, their hourly rates, cycle time required for each of the operations, travel times between operations and other expenses that a patent application would incur. When users fill in this information, small process simulation model boxes pop up; the boxes include blanks, which users fill in with the required information. Once a model has been run, a user will see documents flowing across the screen.

 For correcting or improving a current process, a user generates a model of the process in question, makes whatever changes are necessary for improvement and then runs the new process. When both current and improved processes are modeled, the two are compared. “The nice thing about a simulation process is you can generate a whole process just inside your computer without hiring any more people, changing the flow of paper, constructing buildings or buying machines,” observes Ekstrom.

With the help of the process simulation software, Thiokol has succeeded in improving its patent process, adds Ekstrom. However, because the company is still redesigning several of its processes, it doesn’t know the extent of the improvements yet. Ekstrom continues to use the software, relying on its strong visual animation element to communicate the company’s improved process models to its employees.

Eli Lilly saves millions through process simulation

Pharmaceutical manufacturer Eli Lilly employs more than 29,000 people and markets products in 156 companies worldwide. Such a vast enterprise can develop very long and intricate fulfillment procedures; realizing this, the company decided to reengineer its manufacturing supply chains.

“One of the outcomes of that reengineering process was a desire for a tool to help us look at inventory placement and assess the impact of process cycle time variability on the overall supply chain,” says Forrest Mellott, an advisor in Lilly’s applied computational modeling group.

The software offers standard templates as well as training examples to help users get started, says Mellott. The program steps them through the process, allowing them to consider what activities and resources are involved before flowcharting that process. “You must fundamentally understand your process first,” emphasizes Mellott. “There’s value in creating the model because that helps people come together, particularly those from different parts of the supply chain who understand what the process is and how it’s all interconnected.”

Lilly’s applied computational modeling group used the software to map the company’s supply chain across 15 different departments. Each activity symbol was assigned data such as cost, duration, resources and capacities. Having entered the data, the ACM group ran multiple simulations, including daily and annual “snapshots.” The results -- available in both graphical and tabular format -- validated overall cycle times, shipping, inventory and resource utilization levels.

One of the company’s major successes came in simulating what it calls “unplanned events.” These include pharmaceutical shortages, in-house problems or competitors’ shortages. In order to view unplanned events such as plant shutdowns, the ACM group changed a given transaction’s generator’s formula, schedules and cycle times, and reran the simulation.

“We did a risk analysis to determine where an unplanned event would most likely occur,” reveals Mellott. “For instance, if we had an upset in one part of the process, how would the supply chain respond? Would we have enough inventory placed at strategic points in the chain? Could our processes resupply fast enough so we wouldn’t miss any sales in the chain?”

Using the software, Lilly’s ACM group built a supply-chain model to determine whether its vast inventory was correctly positioned to accommodate variability in manufacturing cycle times and whether inventory levels could safely be reduced. The software enabled the company to quickly complete a cost-effective analysis without affecting or interrupting human resources or physical plants.

As a result of that analysis, Eli Lilly removed $8 million in contingency inventory from its supply chain. This inventory is retained to meet customer demands in case of unplanned events. “The key is, where do you hold it?” queries Mellott. “It’s a fairly complex manufacturing process we go through. The idea is to optimize where we hold that inventory and to balance it against potential risks. The software showed us where we could hold our inventory and still meet market demand.”

Let the buyer be aware

Process simulation software comes in a variety of forms, styles and prices. It’s an especially valuable tool for process owners concerned with process effectiveness and overall improvement. Simulation takes flowcharting to a new level; with the help of such features as what-if analysis and live animation, simulation software allows companies to actually see the interactions between various elements such as resources and cycle times, thereby recognizing bottlenecks and other process inefficiencies.

However, potential users must be familiar enough with the processes under review to make educated choices about which software to use. Before spending money on an expensive package, ask yourself several important questions: What processes require examination? Does the company need flowcharting capabilities or a simulation tool? In this particular project, will you need to find bottlenecks, examine cycle times and see how all the process elements interact? Is the flowcharting program understandable for technical and nontechnical personnel alike? What is the budget for simulation software?

Before making that final software choice, do your homework. Call simulation software companies and ask them how their software will best serve your organization. Be specific; know your problems well enough to explain them to a company representative and discuss them in-depth. Ask for software demonstration packages before making a purchase. Also inquire about money-back guarantees, user technical support and other accommodations to ensure the package will serve your needs. If you’re not sure which package to pick, ask the companies for names of current software users who can give you insight into how they put the packages to use and what improvements they achieved.

A variety of software companies and packages now exist, and the market is growing. Buyers are now offered more choices than ever before. Careful research and planning will ensure not only that a company’s processes improve but also that its employees understand and apply those improvements to the fullest degree.

About the author

Elizabeth R. Larson is Quality Digest’s news editor.

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