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
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