How Discrete Event Simulations Can Help Reduce Manufacturing Costs 

Posted by Asha Shekaran

To compete in an increasingly digitalized industry where Industry 4.0 drives massive data collection, manufacturers must quickly adopt techniques to harness the value hidden in their data lakes. Adding to this pressure, the COVID-19 pandemic dramatically affected manufacturing companies. When dampened demand skyrocketed post lock-down, raw material procurement difficulties and erratic customer demand followed. As manufacturers face intense pressure to reduce costs and increase productivity with minimal investments, discrete event simulation (DES) has proven to be a powerful and effective method to understand, improve, and help automate the complex processes on the manufacturing floor and beyond.   

What are Discrete Event Simulations & Why Do They Matter?  

A discrete event simulation represents a process as a series of instantaneous events. These simulations also consider uncertainties and interactions between events, making discrete event simulation an ideal tool for understanding complex business processes and making effective decisions to save costs and innovate.  

Take, for example, steel production: Numerous heats (product precursors) from hundreds of grades of steel (product types) are scheduled for daily production. All the while, raw material passes through ironmaking, steelmaking, refinement, and casting steps. Each step has sub-steps, relies on different machine types, and has multiple machines of each type (instances). The production process has limited capacity and multiple inefficiencies to be solved – but how can we find and solve them?  

Five Ways Discrete Event Simulations Reduce Manufacturing Costs

  • Virtual experimentation – Test the effectiveness of process changes more quickly, safely, and affordably. Instead of building expensive test plants or creating costly disruptions, perform thousands of “What-if” virtual experiments at the click of a button.  
  • Insights for the most efficient use of limited resources.  
    • Improve manufacturing throughput by optimizing scheduling and routing.  
    • Find and remove bottlenecks.  
    • Produce the right amount of the right products by aligning production planning with demand and the supply chain.  
    • Optimize multi-objective measures such as profit per hour or yield, energy, and throughput (YET), to reduce unit and energy costs while balancing cost savings with other considerations. 
  • Proactive long-term planning – Build and grow efficient, resilient business operations that can withstand massive shocks to reduce long-term costs. Discrete event simulation empowers enterprise resource planning teams to adaptively plan and increase production capacity.  
  • Flexible automation – Increase the speed and standardization of decision-making to inform automation of complex and non-intuitive tasks. Discrete event simulation combined with real-time data supports automated process control of manufacturing, including intelligent recommendations for corrective changes after an upset condition or a surge in demand.  
  • Visualization – Gain a bird’s-eye view of the business processes to pinpoint inefficiencies and make better decisions to drive down costs. 2D and 3D visualizations of the simulations create dynamic, intuitive experiences for decision-makers.  

How to Get Started with Discrete Event Simulations  

  1. Define the problem – Assess existing problems to create clear problem statements and scopes for each. For pilot implementations, it may help to prioritize more viable yet scalable projects.  
  2. Model the process – Create a model of the manufacturing process, including all activities and resources (equipment, machinery, personnel) relevant to the problem statement. Use simulations to evaluate process changes and optimize processes.  
  3. Create business impact – Leverage your findings and implement process changes or optimization solutions with greater confidence in the outcome.  
  4. Iterate through the above steps – As you reprioritize cost-reduction and innovation opportunities, discrete event simulation can support the continuous improvement of your business.  

Implement and scale discrete event simulations to continually reap the rewards of digital manufacturing – increasingly intelligent manufacturing with improved decision-making and decreased costs.  

How Aimpoint Digital Can Help With Your DES Journey

At Aimpoint Digital, we bring extensive experience in using discrete event simulations to generate business value. With one example of using discrete event simulation, we helped a client model a plant with accuracy and productivity improvements of up to 25%. If you want to understand your process, reduce costs, and improve your productivity using your data, contact us today for a free consultation on discrete event simulation with experts at Aimpoint Digital.  

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