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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

March 27, 2013

Given The Complexity Of Today’s DC Systems Companies Need To Be Certain That The Proposed Solutions Will Accomplish The Stated Objectives

Test the Waters with Simulation before Jumping In

Today, new simulation and emulation tools can evaluate alternative scenarios automatically and determine the best options. These tools provide objective, fact-based guidance to making effective manage decisions about a complex range of operational configurations, and can prove that the inevitable design assumptions are realistic.

Holste Says:

The key advantage to simulation is that activity levels can be varied to approximate typical and/or peak conditions.
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The following are (3) benefits most often cited:

  • Gain understanding of complex multiple variables and their impact on operations, starting simply and adding complexity as the model builds.

  • The ability to perform time-phased analysis, seeing, for example, a trend towards gradual but significant increases in inventory levels.

  • The ability to easily perform multiple “what-if” analyses and understand the impact of different operational scenarios.

With a simulation tool, a virtual model of the operation is built (whether it’s a conveyor system in a DC or a supply chain network). Rules are created that describe how the system should work. The key advantage to simulation is that activity levels can be varied to approximate typical and/or peak conditions. Changes to system dynamics, such as labor and order processing rates, can be adjusted and observed on a minute-by-minute basis. It is also possible to have demand or other variables populated more or less randomly over some period.

Running the simulation of a proposed operation, or an emulation of a current operation, then allows the analyst and/or logistics manager to “test” the behavior of the operation over time, as these inputs change. It may allow bottlenecks or other glitches to be identified that may otherwise be missed. The result is better ability to understand the impact of change and volatility on proposed or current operations, what the real bottlenecks and system constraints are, and the advantages or disadvantages of applying various risk mitigation strategies.

Because logistics managers will in many cases be operating in uncharted waters, emulation tools will better enable them to do several real-time analyses:

  • Get a better handle on what is really happening with order volumes by type, customer, seasonality, etc.

  • Understand what the cost and processing times are for different picking scenarios under current and alternative practices.

  • Improve those practices based on analyzing the data output provided.

  • Simulate what the effect of changes in picking practices and policies would be before actual implementation.

  • Give planners better real-time tools/data to understand how orders and materials flow through the DC and to better balance the workforce for optimal results.

Today’s simulation graphics are impressive as many of the visual and functional modeling properties in the last few years have come from leveraging advances in computer gaming technology. As a result there has been dramatic improvement in the realistic behavior of material handling elements within the model. A simulation model can be quickly developed from AutoCAD layouts for most DC material handling systems making it integral and affordable for most companies.

Another important advance in simulation technology is that real-time data can be imported from various sources like the ERP, WMS, WCS, Item Master, and many other independent data banks. This is possible through standard interface protocols and greatly speeds-up the data entry process while improving the quality of the model.

Final Thoughts

Today’s simulation and emulation tools allow companies to test the performance of alternatives in a virtual environment and understand what affect they have on system performance, accuracy, speed and cost. Going forward, simulation of logistics networks and material handling systems may become the quintessential manage tool running in the background and automatically alerting management to potential trouble and suggested remedies.


Recent Feedback

Great article ... can you direct me to any specific software simulation companies and/or examples of what a sample simulation would look like?

Thanks in advance ...   

Chris Cribari
Senior Sales Trainer
Hyster-Yale Material Handling
Mar, 28 2013