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Tools By Jamie Hartford
Simulating Success
Simulation software encourages “try before you buy.”
B uying a car is essentially making an investment, and anyone in the market for an automobile knows the importance of taking it for a test drive. Some problems just can’t be seen from the dealership parking lot or the manufacturer’s manual. It’s only when you put the pedal to the metal and hear the engine scream for mercy that you know something is wrong.
You wouldn’t buy a car without taking it for a spin, so why invest time and money in a new product or process for your business without first giving it a test run?
Take, for example, the case of W&H Systems, Inc., a company that specializes in building highly automated distribution centers. The company was hired by Oxford University Press to automate one of the publisher’s distribution centers in Cary, North Carolina—a deal worth approximately $3 million. With that kind of money hanging in the balance, it was important to get everything right.
W&H Systems developed a design plan that brought together all the computer hardware, software, and mechanical pieces needed to meet its client’s needs, but there was still some uncertainty. “We had doubts that [the design] would meet all the customer service demands in an eight-hour workday,” says Jack Lehr, then-vice president of W&H Systems.
In order to be sure its design would perform up to speed, W&H enlisted the help of Automation Associates, Inc., a simulation engineering and analysis firm based in San Diego. Automation Associates developed a computer model of the proposed design, plugged in all the variables, then set the simulation in motion to see how it would work. What they found was that it would take a 22-hour workday to meet all the client’s demands if the facility were built according to the original design.
“What this technology did was give us a working blueprint of the distribution center when there was no investment yet in any systems,” Lehr says. “And I’d say it saved Oxford University Press $3 million in pure investment and six months of agony due to avoidance in building a failed system. It probably saved a few jobs at the executive level, too.”
W&H Systems went back to the drawing board and, with the assistance of Automation Associates’ simulation software, eventually developed a model that met the client’s demands.
“Automation Associates’ model, or at least a physical representation of that model, is now running in Cary, North Carolina, in eight hours,” Lehr says proudly.
“What we’ve done is created a virtual environment where they can play around.”
Lehr’s company used a model developed specifically for use in the distribution industry, but Automation Associates also offers solutions for clients with transportation, healthcare, postal, and restaurant operations needs. In fact, the company has worked with three major quick-service clients—Yum! Brands, Starbucks, and Jack in the Box.
In the past, when quick-serves wanted to make a change in terms of store design, equipment, or operations, the process often involved developing complex mathematical models and sometimes even the building of a mock-up restaurant location where the proposed changes could be tested. The problem with that method is that mathematical models don’t always account for all the variables—like the fact that workers can’t plow through obstacles in the kitchen on their way to the fryer—and mock-up locations are costly to build. To make the testing process easier, Automation Associates developed its Restaurant Modeling Studio™ simulation software.
“What we’ve done is created a virtual environment where they can play around with this sort of thing,” says David Brann, senior simulation analyst for Automation Associates. “If they want to add a new type of equipment, this looks at the process chain that type of equipment creates.”
To do that, a computer-aided design (cad) drawing of the restaurant’s layout is imported into the model, and a process flow is created by plugging in equipment and human capability variables (i.e. it takes 30 seconds for the fountain machine to fill a cup with soda and 10 seconds for an employee to bag a burger). Real data from the point-of-sale system is then pulled to simulate the conditions of an average workday, such as lunch-hour rush and the calm before the dinnertime storm. Finally, after everything is entered into the system, an entire day in the restaurant’s life can be played out on a computer screen in about 15–20 minutes, thus exposing any bottlenecks the proposed change might create.
“It gets down to a fine granularity of detail if you want it to,” explains Randall Gibson, president and CEO of Automation Associates, and indeed the Restaurant Modeling Studio can account for everything from the time it takes an employee to walk from one point to another in the kitchen to the maximum amount of time a customer will wait in line before balking, or leaving without placing an order.
But perhaps more important than providing answers, simulation software helps bring up new questions that otherwise might only have surfaced once it’s too late. “It exposes new things that need to be investigated further,” Lehr says. “It’s an incredible thought-provoking tool.”
At $75,000 for the software and support, though, this tool is no small investment. Gibson says most of the larger chains have at least experimented with simulation technology, which has been around for about 10 years, but few smaller chains have. “It’s a question of financial justification,” he says.
Though the company hasn’t nailed down any concrete return on investment statistics, Gibson says purchasing the software outright is an option best suited for chains with 100 or more locations. “That’s the minimum entry point,” he says. “From there it only gets better.”
For smaller chains that can’t afford to own the Restaurant Modeling Studio™ themselves, Automation Associates offers consulting on an individual basis—a service that costs around $20,000. Consulting is also a good option for chains that don’t have an internal engineering department to provide the information needed to run the model or the expertise required to analyze the outcome. In such cases, Automation Associates helps clients compile the required statistics and decipher the data.
In the end, though, the decision to buy the simulation software or take advantage of an individual consulting session could come down to this: Do you want to test drive the test drive?
This column originally appeared in the November 2005 issue of QSR. Subscribe and get QSR delivered to your door twelve times per year.