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Industrial EngineerEngineering and management systems at work

VOLUME 47 : NUMBER 12: $16.50DECEMBER 2015

How simulation leadsto organizational insight

Make better decisionsin batch processing

Books an enduring sourceof continuous improvement

Taking lean Six Sigma toolsinto retirement

HELPING

THE HELPERSAdaptive trai i g combats silo behavior a d

comm icatio reakdow s that bedevil

hum itari supply chai s
http://-/?-


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3/41

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4/414 Industrial Engineer | www.iienet.org/IEmagazine

the Front line

12|All I want for Christmas? A drone delivery13|Take fewer knocks to the head13|Sustainability, island style14|3-Ds nothing; lets go 4-D14|Meeting demand15|How to make crazy talk not15|Teach entrepreneurship early

the institute

52|Electioneering and hope

in every issue

6|Editors Desk10|Trending at IIE15|Dilbert44|Case Study46|Research50|Tools & Technologies56|Careers

66|Final Five

Features

24 | Improving humanitarian logisticsTaking supply chain training to the front line taught

the teachers as well as the students

By Bublu Thakur-Weigold, Jonas Stumpf and Stephan Wagner

30|Simulating improvementTips from decades of modeling can benefit your

manufacturing operation

By Edward J. Williams

36 | Baking in better batch processingStandardized capacity analysis can produce results

throughout the organization

By John Preston

41|These pages transfer knowledgeYour favorite improvement type person could

use a good book for the holidays

Compiled by Michael Hughes

perspectives16 | PerformanceNine magic numbers

18 | ManagementHow are you doing?

20 | Health SystemsThe prediction predicament

22 | InnovationDMDII tackles digital industrial innovation

30

36

12

44

Table of ContentsDecember 2015 | Volume 47 | Number 12 | www.iienet.org/IEmagazine

24Cover Story

41
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5/41December 2015 | Industrial Engineer 5

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editor

s

desk

To reach me,

email [email protected]

or call (770) 349-1110.

Teaching the teachershumanitarian logisticsTransmitting specialized operational knowledge to the front lines can

be a difficult task in any organization.

The hurdles increase in sectors such as humanitarian logistics,

which often deals with personnel who dont have access to structured

learning or advanced education. Face it, in far-flung undeveloped

areas ravaged by repeated wars or natural disasters, most people wont

be earning their masters in supply chain operations anytime soon.

In such cases, lessons from the front lines or teaching the teach-

ers, if you will can be invaluable. The Swiss Federal Institute of

Technology Zurich (ETH Zurich) and the Khne Foundation found

that out over the past several years as they adapted their humanitarian

logistics training program.

Bublu Thakur-Weigold, Jonas Stumpf and Stephan Wagner detail

the lessons in this months cover story, which starts on Page 24. Al-

though the title is Helping the Helpers, its clear that the teachers

learned plenty. In many instances, they discovered that the problem

wasnt the gap in skil ls, it was poor information flow. Action learning,using simulations of the participants own system and making sure

the class has personnel from multiple functions, not just the logistics

department, were also important.

The teachers have incorporated the lessons into the program, a

move that truly could benefit those in need. Far from being miserly

and sparse, humanitarian givings accumulated donations have grown

eightyfold since 2000.

The catch, of course, is that many billions of those dollars are wast-

ed. Instead of corruption and incompetence, the wastes in humani-

tarian operations come from the same bad actors that bedevil com-

mercial supply chains: process dysfunction, silo behavior, redundantwork and communication breakdown.

Humanitarian relief agencies worldwide are looking to improve

their operations so that more help gets to victims of disasters, both

natural and manmade. Examining Helping the Helpers is a good

place to start.
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Promote Achievement throughSociety and Division AwardsNominate a colleague for a society or division award to help recognize

INDUSTRY AWARDS

Engineering Economy Wellington Award

Manufacturing & Design (M&D) Outstanding Service Award

Quality Control & Reliability Engineering (QCRE) Golomski Award

TEACHING AWARDS

Engineering Economy (EE) Teaching Award

Lean Teaching Award

Sustainable Development Teaching Award

STUDENT AWARDS

Engineering Economy (EE) Undergraduate Senior Design Award

Lean Student Paper Award

Manufacturing and Design (M&D) Division Student Paper Award

Process Industries (PID) Student Paper Award

Society for Engineering & Management Systems (SEMS) Student Paper Award

Society for Health Systems (SHS) Student Paper Award

Student Chapters IAB YouTube Contest

Sustainable Development Student Paper Award

Check website for deadlines. Visit www.iienet.org/SDAwards.
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(ISSN 1542-894X) is published monthly. Copyright 2015 Institute of Industrial Engineers. Established 1969. Subscriptions for members included in annual dues, not deductible. Single copy $16.50. USA

subscriptions: per year $194; two years $342; three years $437. Outside U.S.: one year $241; two years $411; three years $558. Airmail $99 additional. Institutions and agencies, call for rates: (770) 449-0460.Editors Note:

We treat all communications as letters to the editor unless otherwise instructed. This publication is designed to provide accurate information in regard to the subject matter covered. It is provided and disseminated with the

understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.Content:

Publication does not constitute endorsement of any product or material, nor does IIE necessarily agree with the statements or opinions advanced at its meetings or printed in its publications.This magazine acts as a

moderator, without approving, disapproving, or guaranteeing the validity or accuracy of any data, claim, or opinion appearing under a byline or obtained or quoted from an acknowledged source.All issues of

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PresidentJames E. Moore II, Ph.D.,

University of Southern California

President-Elect and CFOMichael D. Foss,

Cameron International

Immediate Past PresidentDennis Oates, Amazon

Senior VP-at-Large, AcademicRanda Shehab, Ph.D.,

University of Oklahoma

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AeroSystems Inc.

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Universal Orlando Resort

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SecretaryAriela Sofer,

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Chief Executive OfficerDon Greene,

Institute of Industrial Engineers

INSTITUTE OF INDUSTRIAL ENGINEERS

BOARD OF TRUSTEES

Executive EditorMonica Elliott

[email protected]

(770) 449-0461, ext. 116

Managing EditorMichael Hughes

[email protected]

(770) 349-1110

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can use to enhance their professional capabilities, improve their organizationsperformance and advance the development of their profession.

In furtherance of this mission, we adhere to the following objectives:

To present accurate reporting and analysis of the most prevalent industrial

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Early-bird registration ends January 10. Register now!

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Trending @iieThroughout the year, we have covered the upcoming vote on whether to add the word systems to

IIEs name, culminating in the article Name Recognition in the November issue. Below is a letter

from a 37-year member of the institute sharing his thoughts on the name change recommendation.

And be sure to review other election details and officer candidates in The Institute on Page 52.

Mail

Name change is not the same as rebrandingI carefully read the Name Recognition comments of former

President Al Soyster and current President Jim Moore (No-vember). With regard to the question of IIE or IISE, I am not

sure how much of a difference it will make. I am concerned,

however, that the membership not think that a name change

wil l address what in my opinion are much deeper issues for our

profession and our association.

In the introduction to the piece, the name change was de-

scribed as an investment in rebranding, and in Mr. Moores

response he points out both that a more quantitative assess-

ment would come at a nontrivial cost of its own and that

the institute is doing well financially.

We must be clear that a company or organizations brand isnot its name, its logo or its tag line. These are tools to reinforce

and communicate the brand. The brand itself is reputation am-

plified by visibility.

Hours of discussions at conferences and meetings show that

as a profession we have a hard time reaching consensus on

the value proposition we provide to clients, and we have not

invested in finding out what clients think the profession has

to offer them which may be very different from what we

assume they think.

The same holds true for the association in terms of the value

proposition to an enormous pool of potential members. Bot-

tom line, we do not have an effective strategy for enhancing

our reputation and increasing our visibility, and this will not

be solved simply by changing our name.

Looking at U.S. Department of Labor Statistics and asso-

ciation membership statistics reported on Wikipedia, our suc-cesses and challenges are clear. As shown in Figure 1, industrial

engineering is one of the four largest engineering professions

in the United States.

Although I do not show them, none of the other engineer-

ing professions have even one-third the number of practitio-

ners we have.

Our profession is important, ubiquitous and largely invis-

ible. We improve products, processes, systems and organiza-

tions that other professions claim (and the public sees) as the

result of their efforts, not ours. Figure 1 also shows that the

professional organizations of the other three large engineer-ing disciplines have almost 10 times or more the number of

members relative to IIE. This may be because of the splin-

tering of industrial engineering organizations into specialty

associations.

I would suggest that at a time when the institute is do-

ing well financially, it would be a better investment to spend

some or all of the reported $100,000 on hiring branding pro-

fessionals who can apply best practices to perform independent

research regarding what others value in our work, to better de-

fine the value of the profession and IIE, to benchmark against

our sister professional associations, and to then develop a long-
http://www.iienet.org/IEmagazinehttp://www.iienet.org/iemagazine



term strategy to improve the reputation and visibility of our

profession and our association.

This strategy may include collaboration with (or perhaps

consolidation with) other industrial engineering-oriented

associations, and it may even include a recommendation,

grounded in research, to change our name, logo and tag line.

John M. Corliss Jr.

IIE fellow and founder of the IIE Sustainability Division

Andover, Massachusetts

Wed love to hear from you. Send letters to the editor to Michael Hughesat [email protected] or be retro and mail them to his attention at

3577 Parkway Lane, Suite 200, Norcross, GA 30092. And join the

discussion on IIEs social media sites by sharing your professional

insights, questions, multimedia, kudos and more. Go to www.iienet.org/

networkingto get into the conversation.

Share and discuss

FIGURE 1FIGURE 1

By the numbersAccording to the U.S. Department of Labor, industrial engineering is one of the countrys top four largest engineering professions.

U.S. Departmentof Labor employment

by title

Employment numbers(2012)

Professionalassociation

Associationglobal membership

Electrical and electronicsengineers

306,100 IEEE 430,000

Civil engineers 272,900 ASCE 140,000

Mechanical engineers 258,100 ASME 140,000

Industrial engineers,including health and safety

247,400 IIE 14,000
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If Steve Burns gets his way, youll get your holiday order

via the first FAA-approved drone delivery just in time

for Christmas.

Of course, your house must be in the 5-square-mile

area surrounding Wilmington Air Park in Ohio. Burns

company, Workhorse Group, has Federal Aviation Ad-

ministration approval to test and do live deliveries with

his companys drone-equipped electric trucks. The

company and the University of Cincinnati have been

working on the HorseFly octocopters for two years.

The goal is to make the first FAA-approved drone

package delivery.

The drones attach to the roof of the companys

trucks. Drivers load a package into the drones basket. A

flat-screen panel in the truck shows the satellite image

of the delivery address, and the driver touches the screen

to place the drone in the exact delivery spot.

While Amazon famously wants drones to deliverdirectly from a central warehouse, adding the human

factor of a courier who knows the neighborhood is ben-

eficial, Burns noted. It gives the FAA comfort to have

a person nearby in case something goes wrong, and the

driver can recall the drone by pressing a button.

Eventually, Burns said, the FAA will move beyond

line of sight, and thats where the real economic benefits

of a driver plus a truck plus a drone take off. Delivery

companies have optimized current technology and logistics to

where theres not much left to squeeze. But improving tech-

nology has limits after 100 years of refinement, the typicalmedium-duty delivery truck still gets only about 5.5 mpg and

costs about $1 a mile to operate. Electric trucks cost about 30

cents a mile.

But the HorseFlys fuel costs are only 2 cents a mile and

thats a mile as the crow flies, literally.

With those kinds of dynamics, thats how we know this is

going to happen, Burns said.

Its too compelling, and with e-commerce, well the

Achilles heel with e-commerce is in the end a big truck has to

bring it to your house and take it back if you dont like it. And

this is all for a five-dollar book. So theres got to be something

besides dragging a 20,000-pound truck up to your doorstep.

Imagine a driver at a stoplight with one delivery a mile to

her left and three to her right. She gives the delivery to the leftto the HorseFly and completes her three stops to the right. The

drone delivers and returns to the truck.

Drones wont make economic sense for every delivery. In a

residential area with three stops in a row, the drive could be a

quicker option. But for the delivery thats a mile in the oppo-

site direction or a half mile up a farmers driveway, the Horse-

Fly could significantly reduce operational costs, Burns said.

Saving him that 1 mile round trip to the left could have

been the one [the delivery company] lost money on, Burns

said. [Companies] dont make money on every delivery.

Some of them are just a pain.

News from the fieldThe front line

All I want for Christmas? A drone deliveryFAA allows HorseFly octocopter to test flights around Ohio airport

HorseFly octocopters cost only 2 cents a mile to operate compared tothe roughly $1 a mile for a standard delivery truck.

To view the HorseFly octocopter

delivery process in action, visit

http://bit.ly/1LpRqlx.

Watch that drone
http://bit.ly/1LpRqlxhttp://www.iienet.org/IEmagazinehttp://www.iienet.org/iemagazine



Despite all the publicity about sports-

related concussions, many student-ath-

letes dont recognize the symptoms or

wont report them if they do.University of Arizona systems engi-

neering professor Ricardo Valerdi wants

to change that with an app. Having

student-athletes spend 10 minutes on a

virtual athletic field that shows them the

immediate and delayed side effects of

concussions could change their behavior

and attitude toward head injuries.

Valerdi, also I dustrial E gi eers sys-

tems engineering columnist, and his

colleagues at the University of ArizonaCollege of Medicine-Phoenix have

made it through the second round of the

NCAA Mind Matters Challenge, secur-

ing $100,000 to build a prototype and

release it to athletes.

They will present their prototype this

winter to NCAA officials, and the win-ning approach will be made available to

some 400,000 NCAA student-athletes.

The more student-athletes know

about concussion and the risks of hiding

symptoms, the more confident theyll

be in making the right choices, Valerdi

said. And the right choice is simple:

Dont play through a suspected concus-

sion.

The app is designed to be a tool for

athletic training programs and willbe free with any smartphone. It uses

Google Cardboard, a foldout cardboard

mount with lenses, magnet and fasten-

ers that can become an instant virtual-

reality headset when assembled with a

smartphone slipped inside.

Take fewer knocks to the headApp makes athletes think about concussions

Ricardo Valerdi hopes his teams app

will teach student-athletes to avoid

playing through concussions.

The Gorona del Viento hydro-

wind plant eventually could pro-vide all the energy necessary for the

isolated Canary Island El Hierro,

according to an industrial engineer

working on the project.

Juan Pedro Sanchez told the

BBC that the plant covered all of

the islands energy needs for two

hours on Aug. 9.

The next steps will be to try it

for 24 hours and then weeks at a

time, he said.I think that in a year or so, the

plant could supply all the electric-

ity the island needs for about 200,

250 days, Sanchez told the British

news organization.

The island, which relies on supplies of diesel fuels shipped

over unpredictable seas from Tenerife, 124 miles away, saved

300 tons of fossil fuels in July, a number that could increase to

500 tons a month before long. That equals 40,000 barrels of oil

and 19,000 tons of carbon dioxide emissions per year.

The system has five wind turbines and two reservoirs.

When the wind is blowing, excess power pumps water from

the lower reservoir to one that is 2,300 feet above sea level.

When the wind dies down, that water falls through a set of

hydraulic turbines to generate electricity, ameliorating the key

disadvantage of wind power its unreliability.

Engineers say the island will have to expand reservoir ca-

pacity if it wants to eliminate the use of fossil fuels.

Sustainability, island styleHydro-wind combo plant could generate all the electricity El Hierro needs

Photocourtesyhttp://gleanproject.org
http://gleanproject.org/



the

frontline

the

front

line

In the future, the words some assembly re-

quired could mean heating up your new desks

components so they self-assemble.

Researchers at Georgia Tech and SingaporeUniversity of Technology and Design have used

smart shape-memory materia ls with dif ferent re-

sponses to heat to demonstrate four-dimension-

al printing, which creates complex self-folding

structures. The material responds to external

stimuli such as temperature, moisture or light to

change to a programmed shape.

The demonstrations produced a mechanism

that can switch from a flat strip into a locked

configuration as one end bends and threads itself

through a keyhole, along with a flat sheet thatcan fold itself into a box with interlocking flaps.

Each smart-shape memory polymer responds at

a different rate to application of uniform heat.

Possible applications include space structures, de-

ployable medical devices, robots, toys and other

structures.

Earlier work with such materials required ap-

plying different levels of heat, which made the

process complicated. The team turned that ap-

proach around and used a uniform temperature,

which is easier to apply, exploiting the ability ofdifferent materials to control their rate of shape

change through their molecular design, said

Georgia Tech professor Jerry Qi.

The work, Sequential Self-Folding Struc-

tures by 3-D Printed Digital Shape Memory

Polymers, was published in the journal Scie tific

Reports.

3-Ds nothing; lets go 4-DTechnology allows self-folding of complex objects

24thMeeting demandIndustrial engineer ranks 24th on Indianas listof Hot 50 jobs, the dia apolis Busi ess Jour al

reported. The University of Indianapolis will begin

offering bachelors degrees in industrial engineering

in fall 2016 to meet rising demand. IEs earned a

mean salary of $72,170 in Indiana last year, $85,110

nationally, according to the journal.

Prime Number

Starting at the top, this series of photos shows the self-folding process of a

box from beginning to end. This folder box is intended to simulate a postal

mailer.

PhotoscourtesyQiLaboratory,

GeorgiaTech



Teach entrepreneurship earlyPeople become entrepreneurs because they think they are good at it and are going to

be successful, but students dont always feel that way when they graduate. Our findings

show the need for more goal-specific programs that give students the confidence that

founding ones own firm can be a controllable and potentially successful career. Col-

leges and universities can play an important role in convincing students that the noncor-

porate path is a viable option.

Erik Monsen, shown here with the University of Vermonts Entrepreneurship Club, describing his upcoming Journal of Small Business

Managementarticle Founder, Academic, or Employee? A Nuanced Study of Career Choice Intentions. Monsen is the Steven Grossman

Endowed Chair in Entrepreneurship at the University of Vermont.

Quote, unquote

2014 Scott Adams. Used by permission of UNIVERSAL UCLICK. All rights reserved.Dilbert

Industrial engineers try to live in a world of rational-

ity where the numbers lead to conclusions. Unfortunately,

co-workers, associates and CEOs dont always inhabit that

world, which leads to process improvement types dealing

with all sorts of irrationality.

Perhaps Mark Goulston can help with Talki g to Crazy:

How to Deal with the Irratio al a d Impossible People i our

Life. The psychiatrist and crisis counselor offers a six-step

sanity cycle, useful for understanding when a person is

unable to think rationally, not take it personally, offer em-

pathy and gradually guide that person back to a saner way

of thinking.

Chapters detail how to keep your own crazy at bay when

under attack, ways to handle such strife in your personal life

and 14 tactics for talking to crazy.

In particular, The Butter-up: Get-

ting a Know-It-All to Behave could

be quite effective with that recalci-

trant C-level executive.

Through it all, Goulston explains

why people act in unreasonable

ways, giving insight into the brains

natural defense mechanisms and

how to recognize an irrational per-

sons modus operandi.

Talki g to Crazy: How to Deal with the

Irratio al a d Impossible People i our Life is available from

Amacom ($24.95).

How to make crazy talk notHelp arrives for those who have to explain the rational to the irrational

BookoftheMonth



Nine magic numbersBy Kevin McManus

performance

This article fell into place as I was wrap-

ping up another Baldrige Performance

Excellence Award site visit. This year,

my focus was on information analysis

and sharing processes, which suited me

just fine.

As I prepared questions for my visit,

new queries popped into my mind rela-

tive to ideas, best practices and innova-

tions. Specifically, what is the differ-

ence between each one, and does it

make sense to track the frequencies

at which we are generating, evalu-

ating and implementing them?

Most people would struggle to

explain the difference between an

idea, a best practice and an innova-tion. I did at first, but the more I

thought about it, clarity and distinctions

emerged. Ideas come first. Some ideas

are good, some not. Some have been

tried before and worked, while others

have failed time after time. We are after

only the ideas that give us great results.

Best practices are ideas that are prov-

en to work (or at least they should be).

Their results compare well against rel-

evant benchmarks. If you want to be oneof the best hospitals nationally for a giv-

en measure, your results for that measure

should compare favorably with national

top percentiles. Best practices are need-

ed to sustain such results. Be cautious,

though, as best practice claims are made

much more often than they are proven.

True innovations are even harder to

find. Innovations lead to breakthrough

results what some call step changes

in performance. As with best practices,

claims of innovation tend to be overstat-

ed. People often think things are inno-

vative simply because they have not seen

them before. In other cases, a change is

new to a given business sector, but com-

monplace in others.

As I thought about ideas, innovations

and best practices, the notion of the nine

magic numbers came into my mind.

The three improvement types would

make up one side of this matrix. Three

rate types would make up the other side

of the table the generation, evaluation

and implementation rates for each type

of improvement. High performance or-

ganizations should know the nine magic

numbers that are driving performance

improvement across their work systems.

Test yourself can you describe the

difference between an idea, a best prac-tice and an innovation? If so, do you

know the rates at which each type of

improvement is being generated across

your work groups? Do you also know

your respective evaluation and imple-

mentation rates?

Most organizations fail to provide ev-

idence for their three idea rates: the rates

at which ideas of any type good or

bad are being generated, evaluated and

implemented over time. Ask for similar

rates for higher order improvements like

best practices and innovations, and the

result tends to be the deer in the head-

lights look. How many great ideas are in

the bank for future use?

Can people claim to be, let alone

prove they are, high performers if they

cant produce the nine magic numbers?

Are we willing to focus on outcomes

alone to tell us if our work systems are

sustainable and agile enough for the

future? As with most measures, the

nine rates tell us different things

about our idea generation and stake-

holder engagement processes both

the rate at which we are currently

improving and what our improve-ment potential might be.

The nine magic improvement num-

bers are needed to give us insight into

who we are involving and how we are

involving them in our formal process

improvement efforts. Ad hoc, poorly

aligned improvement efforts produce

inconsistent results coordinated idea

capture, evaluation and implementa-

tion efforts contribute significantly to

accelerated progress on the road to op-erational excellence. Sadly, best practices

and true innovations are tough to find

for this process area. Y

Kevi cMa us is a per forma ce improve-

me t coach based i ai ier, Orego , a d

a 33-year member of IIE. He has writte

workbooks about perso al a d team effective-

ess. McMa us is a lum i exami er for the

Malcolm Baldrige Natio al Quality Award.

Reach him at kevi @greatsystems.com.

Sadly, best practices and true

innovations are tough to find

for this process area.
http://greatsystems.com/http://www.iienet.org/IEmagazinehttp://www.iienet.org/iemagazine


http://iienet.org/studentcenterhttp://www.iienet.org/



management

How are you doing?By Paul Engle

Pla s ar othi g; pla i g is everythi g.

Dwight Eise hower, U.S. Army Chief of

Staff a d 34th preside t of the U ited States

Many readers spend a lot of their time

developing and implementing plans to

achieve strategic goals, measuring per-

formance against these plans. Annual

budgets, projects and strategic business

plans represent our attempt to direct

company resources effectively and ef-

ficiently.

Most performance goals and metrics

are financially driven. Sales revenue,

gross margins, expenses and profits rank

high on the list of company objec-

tives. Bob Kaplan and David Nor-ton revolutionized this process by

introducing the balanced scorecard,

described in their 1996 book The

Bala ced Scorecard: Tra slati g Strat-

egy i to Actio . For the first time, man-

agement monitored key performance

indicators as well as financial metrics

when tracking an organizations prog-

ress against strategic plans.

Key performance indicators typi-

cally come in two flavors: lagging andleading. Lagging indicators such as last

months revenue and expenses are com-

pared to the previous period or year.

This information may indicate a trend

that, when extrapolated into the future,

can guide decisions. Lagging indicators

represent historical facts.

However, leading indicators may

be even more important because they

might allow management to take direct

action to improve future performance.

Sales revenue is an excellent example.

Most organizations understand their

revenue cycle and assign significant re-

sources toward meeting annual goals.

Sales and marketing costs take a large

chunk. Many executives struggle to un-

derstand how effectively these resources

are deployed. Leading indicators may

provide the answer.

Advertising campaigns can sway con-

sumer behaviors and grow sales. The

amount and effectiveness of advertising

may be a leading indicator of future rev-

enue increases. Metrics associated with

brand awareness and addressing con-

sumers' needs give management a basis

for forecasting future demand.

Since companies control their adver-

tising spend and determine the most ef-

fective media campaigns, management

decisions affect these companies future

revenue growth. Advertising spendingand effectiveness are important leading

indicators of revenue and should be con-

sidered when developing sales forecasts.

Other leading indicators include em-

ployee productivity metrics. Employee

training and incentive plans can improve

financial results. Resources allocated to

training and bonuses may provide man-

agement with an important leading in-

dicator for employee productivity.

Executives monitor external lead-

ing indicators because they might affect

company results. An example might in-

clude foreign currency exchange rates.

Todays strong U.S. dollar enhances our

global competitors ability to reduce

prices and grow their market share. Do-

mestic producers may experience lower

revenue, pricing, margins and profits

as a result. Because interest rates influ-

ence exchange rates, tracking short- and

long-term rates may provide manage-

ment with a powerful leading indicator

of future revenues.

Selecting lagging and leading in-

dicators may require management to

take a fresh look at their processes

and the external factors that affecttheir business. Analyzing histori-

cal data may provide clues. Use of

big data, defined as vast amounts of

unstructured data points related to

all aspects of a companys business, also

can supply management with important

decision-making tools.

Can a company accurately forecast

future performance using lagging and

leading indicators? In many cases, the

answer is yes, provided managementselects the most important metrics that

impact performance and takes timely

actions to maximize improvement.Y

Paul E gle is a ma ageme t co sulta t

with a BA i a ce. He has more

tha 0 years of experie ce i a ageme t,

operatio s, product developme t, sales a d

marketi g, strategic pl i g d busi ess

process improveme t. You may co tact him at

paulfe [email protected].

Leading indicators may be

even more important.
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healthsystems

The prediction predicamentBy William Ike Eisenhauer

Forecasting is an ungrateful profession.

Many times engineers working in

the healthcare sector are called upon to

provide models that forecast or predict

activity to optimize resources. As engi-

neers we tend to want to use those tech-

niques and methods that will provide

the best and most accurate predictions.

The problem is we also are treated

like the weyward sisters of William

Shakespeares tragedy Macbeth.

As you might recall, the first time

the witches enter Macbeths life and

give answers, Macbeth, while ap-

prehensive, tends to be happy be-

cause they give him good news. His

doubts about their abilities fade, andhe plans his ascension to the throne.

However, the second time, the

news is not so good, and he brushes

them aside and takes a more optimistic

view of things than the actualities the

witches provide.

This is the folly of forecasting things

that no one really wants to know.

In a similar vein, health systems en-

gineers use methods that are a bit more

scientific than the nonsense chanting ofDouble, double, toil and trouble ...

and the whole eye of newt and toe of

frog business, but to most nontechnical

executives it sounds about the same.

This, again, does not really seem to

matter, at least until you are wrong or

more correctly, the method produces an

inaccurate forecast.

Was it three toes and one eye? Or

one toe and two eyes? Ah, yes, it was

the loaded overhead estimate that was

fed incorrectly to the AMARA time

series prediction BIC model selection

criterion module that was the source of

the problem.

Upon uttering this during your visit

to the boardroom, of course, you receive

a wall of blank stares.

This is the folly of using methods that

are too complex for the end user to di-

agnose. If you are forecasting things that

no one really wants to know (folly No.

1) and the end user cant figure things

out (folly No. 2), you will not succeed.

You typically can avoid the first woe

by asking a hard question ahead of time.

Do you have an action plan in place that

depends on the results of this forecast?

If there is not one, then there is no need

for the forecast because no one wants tohear it anyway.

In the case of the second, it is a reality

of forecasting in healthcare operations

(as opposed to the dealings of kings) that

one who is responsible for the actuals

not adhering to a forecast must be able

to explain why. If your audience cannot

comprehend the methodology, limita-

tions and causal chains in a forecast in

order to match them up with actual per-

formance parameters, they are left in the

precarious positions of stating either I

have no idea or I do not understand

how the forecast is made. They need to

know why it has to be an owlets wing

in the cauldron and not just any old bird

appendage.

This is a risky position to be placed in.

It is not a lack of awareness or availabil-

ity of the latest techniques and predictive

methodologies; it is purely a r isk mitiga-

tion strategy. Knowing where and how

the forecast missed its mark is just

as important as heeding its good

and bad news, with just enough

blind-worms sting to take ac-

tion if the prediction is not what

you expected.As engineers we need to be cog-

nizant of these follies and realities

when we introduce our models,

techniques and forecasts to provide the

most valuable, useful information in an

understandable manner.Y

William Ike Eise hauer is a gi eeri g

professor at Portla d State U iversity a d

atio al director of the Vetera s E gi eeri g

Resource Ce ters for the Vetera s HealthAdmi istratio . His i terests are i tegrati g

e gi eeri g a d healthcare professio als to

i crease the value of health systems a d ad-

va ci g e gi eeri g sc ie ce to address health-

care delivery challe ges. He ca e reached at

[email protected].

Knowing where and how

the forecast missed its mark

is just as important asheeding its news.
mailto:[email protected]://www.iienet.org/IEmagazinehttp://www.iienet.org/iemagazine



Inspiring Ideas, Connectionsand Professional Development

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Get excited for the largest industrial and systems engineering

event of the year. Workshops, case studies, thought leadership,

research and connections are all reasons to attend.

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innovation

DMDII tackles digital industrial innovationBy Nabil Nasr

The federal government hopes invest-

ing in digital manufacturing can drive

prosperity and help rekindle American

industrys competitiveness.

Washington hopes to stimulate the

same kind of creative synergies found

in much of Europe and several Asian

countries, where industry and govern-

ment often join forces to motivate

industrial growth. A case in point is

the Fraunhofer Society, an applied

research organization with 67 dedi-

cated institutes in Germany inves-

tigating in fields as diverse as optics

and nanotechnology to industrial

mathematics and process engineer-

ing.In 2012, the U.S. government found-

ed the National Network of Manufac-

turing Innovation (NNMI) as a joint

federal initiative by the Department

of Defense, the Department of En-

ergy, the National Science Foundation

and the National Institute of Standards

and Technology. Modeled after the

Fraunhofer Society, NNMI will build a

network of regional research and devel-

opment institutes for manufacturing in-novation (IMIs). Each IMI wil l focus on

a unique research area and serve as a hub

for manufacturing innovation. Research

and development by the hubs and their

partners will boost U.S. technologies

and products, hopefully spurring more

domestic high-tech manufacturing and

employment.

One of the first and among the

most promising from the perspective of

sustainability is the Digital Manufac-

turing and Design Innovation Institute

(DMDII). It is a consortium of more

than 100 companies, universities, non-

profits and government agencies that

support digital design and manufactur-

ing. DMDII is based in Chicago.

More than 40 companies have signed

on to DMDII. Some partners are small

businesses noted for creativity and inno-

vation, but others are notable high-tech

manufacturers like Autodesk, Boeing,

Caterpillar, Cray, Lockheed Martin,

Microsoft, Rockwell Collins, Rolls-

Royce and Siemens. Likewise, the list of

universities and labs includes many with

strong manufacturing research and edu-

cation credentials. For full disclosure, I

am serving on DMDIIs executive com-

mittee.DMDII intends to help harness new

technology to address declines in manu-

facturing employment, lack of digital

manufacturing capability, breakdowns

in the manufacturing life cycle, and

communication barriers that inhibit the

exchange of data. Therefore, it is focus-

ing on three crucial opportunities to

empower change: research and develop-

ment by participant project teams, out-

reach to manufacturers to help compa-

nies assess and benchmark their digital

competencies, and workforce develop-

ment to better prepare and align workers

for success in the digital manufacturing

arena. The results will apply to nearly

every manufacturing industry sector

and could decrease costs by roughly 10

percent across the entire manufacturing

enterprise.

To make this happen, DMDII is

committed to advanced manufac-

turing enterprise, an area that has

real sustainability enhancing im-

plications. With advanced manu-

facturing enterprise, DMDII will

develop and implement modeling

and simulation tools to allow fastertime to market and efficient production

of complex systems. It also includes a fo-

cus on tools and practices to minimize

multiple designs, prototypes and test it-

erations typically required for product or

process qualification, all connected via

the digital thread to enable designer,

analyst, manufacturer and maintainer

collaboration.

Visit http://dmdii.uilabs.orgto see what

DMDII has accomplished and what itplans to do next. I think you wil l be im-

pressed. Y

Nabil Nasr is director of the Golisa o I sti-

tute for Sustai ability (GIS) at the Rochester

I stitute of Tech ology (RIT) a d director

of the Ce ter for I tegrated Ma ufacturi g

Studies, a tech logy developm t d tr s-

fer arm of GIS. He fou ded the Natio al

Ce ter for Rema ufacturi g a d Resource

Recovery (NC3R) at RIT.

Each IMI will focus on

a unique research area and

serve as a hub for regional

manufacturing innovation.
http://dmdii.uilabs.org/http://www.iienet.org/IEmagazinehttp://www.iienet.org/iemagazine



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HELPING

THE HELPERSAdaptive tr

comm

y c

By Bublu Thakur-Weigold, Jonas Stumpf and Stephan Wagner



Hardly a month goes by without us witnessing scenes of disaster somewhere on

our planet. The images of Haiti, Syria and Nepal linger in our minds, only to be

displaced by the next reports of humanitar ian need. In fact, historical data con-

firm that disasters, be they natural (earthquakes or storms) or man-made (war

and its aftermath), are increasing in frequency.

With every report, the urgent appeals resume. The media coverage implies

that the biggest challenge of aid is the financing itself. However, as we enter the holidayseason for many parts of the world, a glimpse into what happens with the many players

who spring to action and to the funds once they have been collected suggest another story.

In the years that we have been working with humanitarian operations, we have become

familiar with a hidden need behind the well-publicized emergencies the need behind

the need, so to speak. Contrary to the impression created by urgent campaigns like Give

now for Nepal! the accumulated donations are prodigious, having grown eightyfold from

under $2 billion in 2000 to reach $156 billion in 2014. Evidently, both private and pub-

lic donors are giving generously, leaving many organizations, especially those run by the

United Nations, cash-rich.

Rather, the challenge is how well these budgets are deployed to meet beneficiary need.

Research indicates that 80 percent of all funds are spent by logistics teams, mostly because

they are procuring the goods. Unfortunately, a staggering 40 percent of it does not fulfill

its purpose and goes to waste.

Contrary to another common perception, the reason for this loss is not corruption, in-

competence or disproportionately high overheads. The waste can be traced to the same

kinds of inefficiencies that bedevil commercial supply chains: process dysfunction, silo be-

havior, redundant work and, especially, communication breakdown.

But unlike the most successful for-profit firms, humanitarian organizations do not usu-

ally attract top managers and supply chain experts, which puts the best practices of industry

out of their reach. This is an avoidable tragedy since, with every penny put to proper use in

getting the right goods to the right place at the right time, human suffering will be reduced.

At a 2012 workshop, the logistics director of the International Federation of Red Cross

and Red Crescent Societies urged her peers to professionalize and to do more with less,

reminding them that the needy beneficiary cannot ask you to become more efficient so

you can reach his uncle in the next village. This was our call to action.

Pragmatic solutions from the ivory towerThe Swiss Federal Institute of Technology (ETH) and the Khne Foundations HELP

Logistics AG have been working together for the past four years to increase the efficiency

of humanitarian logistics.

The Khne Foundation does not fund relief operations directly. However, it does pro-

vide grants for training and consulting through its HELP Logistics AG program. On the

other hand, despite its supply chain training prowess, the ETH is not one of the many uni-

versities that offer degree programs in humanitarian logistics. Nevertheless, the combinedcapabilities of the two organizations seemed to be a dream team: academic prowess and

best practices, together with an extensive worldwide network and real-life experience in

humanitarian work.

Early on, however, it became clear that ETHs commercial research findings did not

quite fit the logic of nonprofit work. In many cases, the teaching material required a thor-

ough translation before it could be delivered in the field.

To enable agile delivery and impact, team-based action learning combined with a ver-

sion of MIT professor Jay Forresters beer game proved to be a powerful way to drive the

necessary improvements. Communication breakdown is arguably the No. 1 cause of inef-

ficiency in humanitarian operations, and our own assessments confirmed that poor infor-

mation flow, not knowledge gaps, compromised effectiveness.

H



Helpingthe

helpers

Comparable to the commercial sector, education does not

automatically trigger solution implementation. No single

boss can command a global network of decision-makers to

collaborate. There would have to be alignment and buy-in by

the individual functions. Our workshops would also have to

engage teams that were more heterogeneous than those who

attend universities and prepare these trainees to implementchange.

Although it is often misunderstood as a rehearsal of supply

chain management, the beer game is a simulation of a dysfunc-

tional distribution system, and (if not passively witnessed on a

computer screen), one of the most compelling ways to experi-

ence how the distortion, delay and amplification of informa-

tion causes systems to fail.

Humanitarian logistics have unique characteristics, like the

built-in handoffs between headquarters (in quiet places like

Switzerland) and the field, which is by definition in a disas-

ter area with poor bandwidth and infrastructure. Firefight-

ing, with its tendency to overreact and under-plan, is the very

nature of most aid work. It is not surprising that reporting

material count or beneficiary estimates in the heat of battle is

perceived as irritating bureaucracy that distracts staff from the

real work at hand.

It was our challenge to convince learners from a daunting

range of professional and educational backgrounds that passing

on information was as critical to the success of their projects

as distributing the goods themselves. In this report from the

field, we look back on what both our instructors and partici-

pants experienced over several years at several stations around

the globe.

Station 1, Geneva: The instructors were on our home

turf and felt confident that we had all the answers. How dif-

ficult could this be?

We played the original version of the beer game with a

small, faith-based nongovernmental organization (NGO) that

provides healthcare and sanitation to hot spots in the world.

The game worked just as it had with our MBA students and

commercial managers. The stock-outs and breakdown of trust

were appalling.

But in this case, the players were unconvinced by the incen-

tive to minimize cost. Why, they asked, should a high score(high costs) really lose? They were under pressure to spend all

their budgets or risk losing them in the next round of funding.

This time, the point of this organizations operations wasnt

about cost-cutting this was about saving lives.

Slightly chastened, the instructors went back to the drawing

board to redesign plans for the future.

Station 2, Rome:A visit to the U.N. offices does not

equate to a visit to your typical NGO. Instead, the instruc-

tors were dealing with a team of highly trained professionals

accustomed to all the infrastructure that international politics

can provide. This site is the nerve center of food distribution

to the worlds needy. The staff members carried blue passports

and came, proverbially, from all corners of the earth.

By now, we had redesigned MITs original beer game to

become the high energy biscuit or HEB distribution game,

relabeling the nodes to reflect humanitarian nomenclature and

reworking the debrief to address their practices. In this session,

there was no argument about the need to control cost.

However, a silence briefly descended on the players at the

one round in play when every single one of the four ware-

houses was empty. Stockpiles of biscuits were on the road be-

tween them. Without a word from the instructors, the conse-

quences of the delays and demand distortion were all too clear

to the participants. The cost of a stock-out would be hunger or

worse. The lesson was learned.Station 3, Juba, South Sudan:This time, training was

happening in a war zone. This capital city had only two per-

pendicular paved roads, and some parking lots were guarded

by small boys with large rifles. Our host NGO was to pro-

vide healthcare and water sanitation because epidemics spread

when food is distributed to camps without latrines.

The international staff members were mostly university-

educated, and one turned out to be a mathematician. In con-

trast, the national staff members in the classroom were those

who had survived the conflict that had destroyed settlements

and prevented them from completing primary school. Dur-

Empty warehouses across the board mean hunger or worse for

the beneficiaries of humanitarian assistance.



ASEAN government officials play the high energy biscuit (HEB) game, a version of MITs beer game modified to fit the needs of

humanitarian operations.

As stories of refugees from Syria and other war-torn and impoverished Middle Eastern countries dominate the news, humanitarian relief

agencies are examining their supply chain networks to improve their response.

CHEP, which provides pallets and container pooling, is performing an in-depth study of the United Nations Commission on Human

Rights global supply chain network, according to the 21st Century Supply Chain Blog run by Kinaxis, which provides cloud-basedsupply chain software. In addition, according to Kinaxis, the UPS Foundation has worked with UNCHR and the World Food Programme

to deliver relief shipments to thousands of refugees in Greece and along the Macedonian border. On September 5, 163 metric tons of

relief supplies arrived via air shipments, including 86 tons of high energy biscuits, 30,000 blankets, 25,000 sleeping mats and 1,000

solar lanterns.

Mobile technology is having its

own effect on humanitarian supply

chains. Refugees Welcome, a German

website, has connected 222 refugees

with accommodations from people

who have opened their homes to

displaced people. And Refugeemaps.

org is an independent project that uses

geospatial and technical knowledge to

help support the humanitarian network

for the refugee crisis in Europe.

According to its website, the crowd-

sourced online application addresses

the need for the visual display of

grassroots activity.

Revising ways to help refugees



Helpingthe

helpers

ing the class, not all of them could compute

the simple sums to tal ly inventory, nor fill out

the graphs. Our teaching skil ls were tuned to

the needs of professional managers and had

reached their practical limits.

Astonishingly, we saw that innumeracy

doesnt have to be a barrier to ingenuityand improvisation. The teams understood

the wild fluctuations of the graphs and wel-

comed the recommendation that they set up

their game to win rather than to lose. The

gaming behavior triggered by poor visibility

and communication was all too familiar to

them. It was a relief to learn that hostile and

distrustful reactions could be the outcome of

system structure (which could be fixed) and

not always malice (which could not be fixed).

One of the local buyers made a neat diag-

nosis: They always suspect that I am corrupt, and they un-

fairly correct my cash budgets, which, in turn causes me to

over-request so I can buy the food we need. And then every

number is wrong no matter what! Again, lesson learned.

Station 4, Jakarta, Indonesia:Indonesia is in the heart

of the typhoon and earthquake region. The news of our HEB

simulation has spread, and the Future Leaders of Disaster

Management of the ASEAN governments wanted to try it.

To increase preparedness, the government officials are plan-

ning centralized warehouses in a region where tropical storms

hit with near predictable regularity. The game electrified the

room, and indignant cries of corruption rose to a chorus.

The delays and handoffs were wreaking their usual havoc:

Players were struggling with a system that took 12 weeks for

information to flow end-to-end, from beneficiary to factory

and back. Where is the material I ordered weeks ago, and

what have you done with it?

Although there were only four nodes to manage, supplies

were running out at one node and piling up at another.

In this group, however, we had decision-makers who could

influence how the international network was to be config-

ured. We discussed how long their own supply chains were set

up to be, how many handoffs were built in from the beginningand how demand information was being passed through the

system.

They asked themselves how better collaboration between

countries could be set up to avoid misunderstandings and mu-

tual distrust. Dont communicate by passing only reports, lists

or orders back and forth without explanation and context. The

misinterpretation of upstream performance and the gaming

that ensued (again, over-ordering because they did not believe

that their supplier would deliver as requested) would have to

stop. They left determined to put their pooled resources to

better use.

Station 5, Brussels:This time, the training team was at a

worldwide meeting of logistics officers of the same small faith-

based NGO we began our program with. After playing the

HEB game so many times, they now understand the value

of managing the system and not just the sum of its functions.

One of our students, a former child soldier from South Su-

dan, offered to assist with the game because he had learned so

much from it. He wanted to make sure the learning was passed

on to his colleagues in Afghanistan, the Middle East and Asia.

This was the last person we had expected to train the trainer,

but he got the job done. And so, apparently, had we.

Looking back, looking forwardThe special challenges of humanitarian logistics clearly are

being taken seriously by educators and researchers alike. The

growing array of training options for humanitarian workers is

creative and diverse, ranging from e-learning from the Fritz

Institute to applied academic programs like those at Georgia

Tech and the University of Lugano. The ETH/HELP Logis-

tics AG program completes its portfolio of training with ag-

ile workshops designed to improve continuously to support

team-based action.

Our experiences often counter the assumption that the keysto a successful class lay with the quality of instructor or train-

ing content. Instead, we make several observations on instruc-

tional design. Action learning has proven useful, especially to

mixed audiences, because it makes the educational qualifica-

tion of individual participants irrelevant. Furthermore, we

found that subjecting the group to well-orchestrated simula-

tions of their own system (and not just rehearsals of individual

transactions or scenarios) builds both judgment and shared

incentives.

To create a common understanding of a complicated global

system, the selection of class participants must be prioritized as

The graphs show that one well-performing calm manager (at node 1) cant prevent

the interlocking system from going out of whack.



highly as training content. It was often a struggle to convince

finance or programs staff to attend what is announced as a

logistics class.

Yet if the learning group consists of only one function, the

training might reinforce the silo thinking that is natural in

specialized organizations, while implying that a single func-

tion (like logistics, which has the last touch) is in control and

alone accountable for delivery performance.

As practitioners and academics, we have worked with the

U.N. and tiny NGOs, government representatives, well-

meaning and diligent people from all walks of life and privi-

lege. What surprised us most was the fact that skill gaps are not

the most pressing problem they faced. Without well-managed

information flows, their organization, natural turnover and

process architecture can set up humanitarian logistics to fail.

Collaboration is not a natural impulse in a high stress situ-

ation, be it commercial or humanitarian. Communicating

with order slips or reports is, however, natural and routine

behavior. Changing this one habit has a disproportionate im-pact on system performance by reducing handoffs and delays.

After almost two decades of playing the beer, and now the

HEB, game, one of the most frequent comments we hear is

how amazing it is that the bullwhip effect always kicks in

with every single group of players, independent of individ-

ual talent, disposition, education, experience or managerial

expertise.

Underlying this wonder is one of the most persistent false

assumptions about systems performance: that a charismatic

leader will make it work, neutralizing uncertainty. The shock-

ing experience of the game, in which professors and CEOs

alike fail, makes clear that no one decision-maker, however

gifted, well-educated or strong-willed, can be held responsible

for or maintain control of what is going on across the board.

Uncertainty, if allowed to propagate unchecked, will always

exist and wreak havoc. Humanitarian supply chains, like their

commercial cousins, are, as shown in Figure 1, a complex, in-

terconnected system involving flows of goods, funds and data.

Conversely, even the smallest link in the supply chain can

help to remove bottlenecks and expedite critical information

so others can plan realistically and in t ime. This single insight

can motivate all kinds of relief workers to reach out to a prolif-

erating array of stakeholders: military and government repre-

sentatives, local authorities, national and international suppli-

ers, donors, partner organizations, clusters, transport partners

and, of course, their own headquarters.

Improved collaboration can leverage the multibillion-

dollar budgets in what some are calling the humanitarian

economy. No reduction of overhead or even corruption can

compare. Its about unlocking the potential that was in theirsystems all along.Y

Bublu Thakur-Weigold is associate director, programs at the Swiss

Federal I stitute of Tech ology Zurich (ETH Zurich) a d is a part er

at e3 Associates ter atio al.

Jo as Stumpf is regio al program director for the Kh e Fou datio s

HELP Logistics AG, based i i gapore.

Professor Stepha ag er holds the Chair of Logistics Ma ageme t

at the Swiss Federal I stitute of Tech ology Zurich (ETH Zurich).

FIGURE 1FIGURE 1

Complexity in actionA humanitarian supply chain is an interconnected system involving flows of goods, funds and data.



IE methods,

is a powerful tool for

improv

By Edward J. Williams

A primer forsimulation inmanufacturing



As the world becomes con-

ceptually smaller and more

tightly integrated economi-

cally, the challenges of de-

signing, staffing, equipping

and operating a manufac-

turing process or plant intensify. Thesechallenges include, but are not limited

to, process design and configuration,

selection of personnel (staffing levels

and skill levels), selection of machines,

sizing and placement of buffers, pro-

duction scheduling, capacity planning,

implementation of material handling

and choices for ongoing process revision

and improvement.

During its 50-year history of appli-

cation to manufacturing operations,

simulation has successfully addressed

all of these and more. Correctly used,

simulation is a powerful force for orga-

nizational learning. Typical motivations

for initiating a manufacturing-context

simulation project include:

0. A system design is already anoint-

ed, but upper management wont

OK spending the money until a

simulation provides good news about

that design.

1. A design (or several) is (are) sketched

on a cocktail napkin, and simula-

tion might give insight about the

designs potential capability and

indicate points amenable to improve-

ment.

2. The system is already operational,

but not satisfactorily; several im-

provements have been suggested

and even hotly debated. Their merits

need investigation.3. The system is already operational,

and contingency plans are needed in

case of increased product demand,

increased economic pressures, wider

variety of product mix or other plau-

sible changes.

Note how a zero prefaces the first

motivation. Beginning a simulation

project with this motivation is setting

foot on the road to ruin as the results

A



Aprimerforsimulationinmanufacturing

will be irretrievably contaminated by bias. The second mo-

tivation (or No. 1 in our nomenclature) is the one with the

greatest potential return on investment (ROI). In these cases,

many examples exist of a 10-to-1 ROI, occasionally reaching

100-to-1 ROI.

In this situation, estimating all needed input data required

for the simulation will be a challenge. After all, the systemdoes not yet exist. The power of sensitivity analysis (explained

below) is then extremely valuable.

In the last two situations, the existing systems input data,

which will be modeled as a baseline, will be more readily

available, although the numbers might not be easy to find. Its

quite possible that suggested improvements A and B will be of

little value when implemented separately, but implementing

both could yield great value. Statistical analysis of the output

can expose such valuable insights.

When undertaking a simulation project in manufacturing,

remember that unsatisfactory operation may refer to any or

all of low throughput, low utilization of expensive resources,

excessive in-process inventory or long makespan (likely in-

cluding long waits in queues).

Where are we going?First, when a simulation project is to be started, vital questions

must be asked and answered.

1. Exactly what is to be modeled?For the first ques-

tion, and especially for an initial or early foray into simulation

usage (which management may be approaching charily), the

preferred answer is a small one. Extensive experience suggests

that an answer such as the mil ling department or the XYZ

line augurs much better for eventual success than an answer

such as the whole factory, or, worse, the whole factory plus

inbound and outbound shipments.

2. What questions shall the model and output analy-

sis answer, and what decisions will be guided by those

answers? For the second question, example answers (these

answers are themselves questions) might be:

Of the three proposed alternatives for production line ex-

pansion, which one will produce the greatest throughput

per hour? Will a specific proposal for line design be able to produce

at least 55 jobs per hour?

What level of staffing of machine repairmen/repairwomen

will ensure that the total value of inline inventory will not

exceed $40,000 at any time during one month of sched-

uled production?

Will the utilization of a particular critical and expensive

piece of equipment be between 80 percent and 90 percent?

Which of several proposed designs, if any, will ensure that

no part waits more than eight minutes to enter the brazing

oven?

Raising and documenting these questions accomplishes sev-

eral vital tasks. First, these questions will provide an unequivo-

cal basis for answering the final question, Has the simulation

project successfully met its objectives? Second, the questions

guide decisions concerning the scope and the level of detail to

be incorporated into the model, guide data collection efforts

and help guide the choice of simulation software. Note thatthe scope and level of detail should be as low as possible consis-

tent with answering the chosen questions.

3. When are results needed? There are two typical an-

swers to this third question. The first answer is that results

must be available by a specified drop-dead date to influence

a key decision. If late, the results will be useless and ignored.

The second answer is that the sooner results are available, the

sooner the company can start earning greater profits via an

improved system. The second case favors quality over speed.

In cases with a drop-dead date, the project plan surely will

require modification. Possible modifications include canceling

the project, reducing its scope and adding headcount to the

project at its inception. Adding headcount is quite dangerous,

being akin to the notion that if we need the baby in three

months, not nine, we will assign three women to produce it.

And adding headcount after the project is underway is even

more dangerous. Such a move likely will crash into the figura-

tive iceberg so aptly described by Frederick Brooks famous

article The Mythical Man-Month. He wrote, Adding

headcount to a late project makes it later.

4. Who will do the work if it is to be done at all?

The manufacturing enterprise also will have to address the is-

sue of who will do the work. Reasonable alternatives include

doing simulation modeling and analysis in-house or contract-

ing with a service vendor for this and all future simulation

projects. Companies also can hire service vendors to complete

this project while also training your staff to do future projects.

Now, if the project is to proceed, its time for data collec-

tion.

Data collection and analysisData collection is notoriously the hardest and most tedious,

time-consuming and pitfall-prone phase of a simulation proj-

ect. First, consider the wide variety of data typically needed fora manufacturing simulation:

Cycle times of automatic or semiautomatic machines; pro-

cess times on manually operated machines

Changeover times of machines, whether occasioned by

product change (Next one is green, not red.), cycle count

(After making 55th part, sharpen the drill bit.), working

time (After polishing for 210 minutes, replenish the abra-

sive.), or elapsed time (Its been three hours since we last

recharged the battery.)

Frequency and durations of downtimes; whether down-



times are predicted by operating time, total elapsed time

or number of operations undertaken; whether a downtime

ruins or damages a work item in process

Travel time, load time, unload time, routes and availabil-

ity of material handling equipment (conveyors, tug trains,

automatic guided vehicles, forklifts); whether travel time

differs for loaded vs. unloaded vehicles; accelerations anddecelerations also may be significant and important

Frequency of defective product; whether the defective

product is scrapped or repaired

Operating schedule number of shifts run, their durations

Workers their schedule, number and type of workers

available (operators, repair staff, material handlers), duties,

travel time between duties, absenteeism statistics

Buffer locations and capacities

Availability and frequency of delivery of raw materials

I have yet to undertake a manufacturing-simulation project

in which the client added nothing to the above generic list.

Next, be careful of misunderstandings that can undermine

data collection. Perhaps the client spokesperson said, Cycle

time of this machine is six minutes. Its quite possi

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