1. © 2001 Six Sigma Academy© 2003 Six Sigma Academy1 Bank Exercise Champion Workshop

2. © 2001-2003 Six Sigma Academy2 Why use simulation? In very general and abstract terms, simulation is used to Describe behavior of physical and business systems Construct hypotheses or theories to explain behaviors Predict behavior of future systems Perform what-if scenarios for existing and proposed designs

3. © 2001-2003 Six Sigma Academy3 Why use simulation in DFSS? Specifically, in DFSS and business context, simulation is used to Study designs before piloting or modification Manage risk by preventing defects and reducing costs Eliminate unforeseen barriers, bottlenecks and design flaws Allocate necessary resources to assure stakeholder satisfaction Build predictable, controllable and optimal designs Facilitate communication among multifunctional team

4. © 2001-2003 Six Sigma Academy4 What is simulation? A useful definition: Simulation is a disciplined process of building a model of an existing or proposed real system and performing experiments with this model to analyze and understand behavior of selected characteristics of real system so as to evaluate various operational strategies to manage real system We will dissect this long sentence to make sense.

5. © 2001-2003 Six Sigma Academy5 Simulation as a Disciplined Process Simulation is a disciplined process of building a model of an existing or proposed real system…. Simulation has to be designed and performed in a systematic fashion A model is an approximation of part of a real system. Model building is an important step. Necessary but not sufficient A model is not simulation in itself. We simulate a model. Model Rev 1 Real System Existing or Proposed Product or Process

6. © 2001-2003 Six Sigma Academy6 Simulation as a Means to an End Simulation is a disciplined process of building a model of an existing or proposed real system and performing experiments with this model to analyze and understand behavior of selected characteristics of real system …... Model Rev 1 ExperimentAnalyze Understand Real System Existing or Proposed Product or Process It is impossible to replicate all of reality in simulation. Only a handful of selected characteristics can be adequately modeled and analyzed to provide meaningful results.

7. © 2001-2003 Six Sigma Academy7 What is simulation? Simulation is a disciplined process of building a model of an existing or proposed real system and performing experiments with this model to analyze and understand behavior of selected characteristics of real system so as to evaluate various operational strategies to manage real system Model Rev 1 ExperimentAnalyze Understand Real System Existing or Proposed Product or Process Real System Managed or Modified

8. © 2001-2003 Six Sigma Academy8 Simulation as an Iteration Simulation process is not a one time deal. Simulation is revised and enhanced as our understanding of the system increases with each iteration Model Rev 1 ExperimentAnalyze Understand Model Rev 2 ExperimentAnalyze Understand Model Rev n ExperimentAnalyze Understand Real System Existing or Proposed Product or Process Real System Managed or Modified

9. © 2001-2003 Six Sigma Academy9 How Simulation is Used in DFSS Estimate behavior and performance of existing or proposed designs Combine sub-designs logically to study complex systems Quantify risk of proposed design changes Locate areas of leverage, costs and values systematically Compare behavior and performance of alternate designs Redesign system to meet design intent Identify Validate DesignOptimize Cust & Biz Requirements Definition Gate 1 Gate 2Gate 3 Gate 4 Gate 5 Gate 6 Conceptual Design and Feasibility Preliminary Design Detail Design Product & Process Validation Transition Gate 7Gate 0 Prototype/ Pilot

10. © 2001-2003 Six Sigma Academy10 When is Simulation used in DFSS? Simulation is used throughout DFSS process, but especially in Preliminary design – to select effective designs Detail design – to optimize selected design ExamplePreliminary DesignDetailed Design BusinessSelect way to mergeScheduling work force Applicationmultiple service centersLayout of calling station Select type and locationMenu of food items for a new restaurantKitchen layout ProductSelection of EngineDesign of fuel lines ApplicationDiesel, fuel injection etcDimensions of cylinders Bridge type: steel, concreteDesign of connections Location, number of lanesFoundation dimensions

11. © 2001-2003 Six Sigma Academy11 Use of Simulation in Preliminary Design Determine if proposed preliminary design meets functional requirements Evaluate how high level design (structure) and inputs will impact overall system output and performance Compare performance of high level design alternatives Assemble behavior of sub-elements to predict overall performance Perform sensitivity analysis to study importance of sub-elements Redesign product and service as needed Simulation shows if preliminary design model can potentially meet functional requirements

12. © 2001-2003 Six Sigma Academy12 Use of Simulation in Detailed Design Determine if proposed detailed designs support overall design Assess risk of failure of sub-elements in providing system integrity Evaluate how sub-elements impact overall design performance Compare performance of detailed design alternatives Perform sensitivity analysis to study critical system attributes Redesign sub-systems as needed Simulation enables optimization of detailed design model

13. © 2001-2003 Six Sigma Academy13 General Areas of Applications Operations management of complex process systems Design of production and queuing systems Capacity planning and inventory control Resource and project scheduling Physical sciences, pharmaceuticals, engineering and manufacturing Social sciences, economics and policy making Ecological, biological, epidemic and environmental studies Financial applications: fiscal products and management Bank operations, transactional processes, loan management Where does it not apply? It Applies to All Situations.

14. © 2001-2003 Six Sigma Academy14 Simulation Exercise and Example 1 SigmaBank prides itself for giving personable service to its customers. Currently there is only one teller, Pat. There is a belief that customers have to wait too long. Customers arrive every 7 minutes and teller services take 3.5 minutes. SigmaBank wants to know the following: What percentage of customers have to wait? What is average wait time? Maximum? Minimum? What is duration of an average customer visit? Max? Min? How busy is our teller, Pat? (% utilization) How do you plan to proceed? Take 5 minutes to answer these questions. Discuss. Do answers appear real? Explain.

15. © 2001-2003 Six Sigma Academy15 Simulation Example 2 SigmaBank prides itself for giving personable service to its customers. Currently there is only one teller, Pat. There is a belief that customers have to wait too long. Customers seem to arrive anywhere between 2 to 12 minutes and teller services take anywhere from 1 to 6 minutes. SigmaBank wants to know the following: What are average arrival and service times now? What percentage of our customers have to wait in this scenario? What is average wait time? Max? Min? What is duration of an average customer visit now? How busy is our teller, Pat? First, take a few minutes to jot down your answers to the above questions. How will you check your answers?

16. © 2001-2003 Six Sigma Academy16 Simulation Steps Project Definition1Assemble multifunction team 2Define simulation objective 3Define system boundaries and scope 4Establish project plan Problem Definition5Identify and formulate problem 6Formulate conceptual model Data Definition7Establish DOE scheme 8Collect system data 9Prepare and process data Model Definition10Model translation 11Verification and Validation Experimentation12Set experimental conditions 13Perform simulation runs Output Analysis14Analyze output 15Interpret and present results Implementation16Document results and actions 17Outline next steps