From a Snapshot to a Video
Why a Major Food Manufacturer Moves from Spreadsheets to Simulation
Engineers at a major food manufacturer work through production decisions with spreadsheets, and the answers keep falling short. A dynamic model lets them watch the system behave, test far more alternatives, and get results in as little as 15 minutes. Across the company, its simulation manager estimates $5 million saved from 40 models, most of it by stopping projects that would have backfired.
- The business
- A major food manufacturer
- The question
- Which production changes are worth making, from plant capital out to the network?
- The model
- The production system run as a video, not a snapshot
- What it is worth
- Results in as little as 15 minutes; $5M saved across 40 models company-wide
- Source
- IIE Solutions · Food Engineering · project record
How the work starts
The project most people remember is the supply chain one, but it begins on the plant floor. At one site, the company uses the same simulation approach to decide how many packaging lines to buy for a particular product line.
What the tool needs to do
The next goal is to take cost out of a major product line by improving the production system. The engineers have been working through scenarios at an aggregate level with spreadsheets. As the director of engineering puts it, the company needs a tool that can model complex relationships across the full production system and draw “the feasible kind of conclusions that helped whittle down alternatives.”
“Instead of taking a snapshot, this is more like a video. It’s more than just a point solution. Your ability to actually see the activity in action and plot out the results allows you to understand impacts much better while the supply chain is running. We can run six months of supply chain data in a matter of minutes.”— Mike Geddis, Director of Engineering
What building the model teaches them
“What we really found to be very powerful was the actual building of the model. It forced a certain diligence in terms of saying, if we change the system here this happens over here. We had not gone to that level of understanding the interconnections of our systems before.”— Mike Geddis, Director of Engineering
A value stream map is the snapshot; value stream map simulation is the video.
Getting answers quickly
“This definitely saves us time. It gives the ability to let the tools follow our questions and follow them rapidly, so once we have the model constructed, we can get results in as little as 15 minutes. There’s no question we will explore substantially more alternatives than we would have if this were a more laborious process like before. As a result, we end up with much more thorough and novel solutions.”— Mike Geddis, Director of Engineering
What simulation is worth across the company
The company uses simulation well beyond this project. Its manager of advanced control and simulation tells Food Engineering he estimates the company has saved $5 million from 40 simulation models. Of that, $3 million comes from scrapping projects that would have been counterproductive.
“Cost avoidance is a concept accountants hate, but it’s real.”— Malcolm Beaverstock, manager of advanced control and simulation, in Food Engineering
One of those projects is at a cereal plant that moves product from a dryer to packaging on carts. Management assumes conveyors will do the job better. The model shows productivity would drop with the conveyors as first designed, because the carts give the plant flexibility the conveyors take away. Further tests in the model lead to a conveying system that does work better.
Another comes when the company acquires a barbecue business. A simulation of the smokehouse shows it can meet the demand from wider distribution without new equipment.
Where this work comes from
This study is done by the same team using Supply Chain Builder. It starts as a plant capital decision and grows to cover multiple plants, product portfolios and locations. ReliaSim covers the production side of that work, and supply chain modeling for the network side is coming to ReliaSim.
Published as IIE Solutions (PDF), reprinted with permission of the Institute of Industrial Engineers. The company-wide figures are the simulation manager’s, from Kevin T. Higgins, “Virtual Engineering’s New Frontier,” Food Engineering. They cover the company’s simulation work in general, not only this project.
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