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The changing role of simulation modeling:
from a manufacturing re-engineering-project
towards the Corporate Model
A real case study from the aircraft manufacturing company
Vaidotas Sruogis Alessandro Lino
Department of Information Science Business Planning and Management Control
University of Bergen (Norway) Piaggio Aero Industries S.p.A.
A.P.Kavoliuko 19-193, LT-2050 Vilnius, Via Cibrario 4 -16154 Genova, Italy
Lithuania Tel:(+39) 010 6481 842
Tel:(+39) 349 44 2 88 72 Fax:(+39) 010 6481 016
Abstract
The study presented in this paper concerns a case study conducted in a medium size aircraft
manufacturing company. The paper discusses a changing role of a simulation model throughout
the lifecycle of manufacturing re-engineering project. The original goal of the study was to gain
a deeper understanding of how the existing production line of an executive class turboprop
aircraft would respond to an increase in the production rate and use the acquired knowledge to
improve the existing manufacturing process. As the final result of the study an interactive
learning environment has been produced to stimulate new ideas and improvement initiatives. The
modeling study also served as a small-scale prototype project before engaging into a large-scope
modeling activity, developing a corporate model that relates all the main functions of the
company, such as procurement, production, logistics, human and capital resource acquisition and
allocation, marketing, sales, financing, research and development, and is aimed at the design of
robust policies for improving the company’s performance and reinforcing the organizational
learning process. The paper further discusses the lessons learned from the prototype project and
sets the framework for the future work.
Keywords: — simulation, manufacturing, re-engineering, interactive learning environment.
' The authors wish to thank Jose Di Mase, the CEO of Piaggio Aero Industries S.p.A., for providing active support
to the System Dynamics project and Professor Pal Davidsen (University of Bergen, Norway) for generous assistance
and encouragement throughout the process. We also want to thank E. Maffei, B. Brill, S. Gamalero, R. Masala, D.
Picone and P. Petrini for their valuable contribution to the project.
Extended Abstract
The study presented in this paper concerns a real case study conducted in a medium size aircraft
manufacturing company. The original goal of the study was to gain a deeper understanding of
how the existing production line of an executive class turboprop aircraft would respond to an
increase in the production rate and use the knowledge acquired to improve the existing
manufacturing process. In order to be more focused and reduce the project to a manageable
scope, the most critical segment of the production line was identified and studied in detail. A
simulation model was developed to capture the structure and the dynamics of the production
processes that take place in this segment of the production line. The preliminary results
demonstrated that the segment under study could not support the required production rate. At a
later stage, an internal inter-functional team of specialists, involving the manager of the area
under study, an industrial engineer, a person responsible for the parts supply, a person
responsible for planning and control, was established to address the problem at hand. They
suggested a list of alternative plans to re-engineer the production process. At this point the
simulation model was developed further to support evaluation of alternative re-engineering
plans. Thus the model was used as a decision support tool, which led to the identification of the
best way to produce the critical sub-assembly of an aircraft fuselage. The re-engineering
approach chosen required a substantial investment in the design and building of a new piece of
industrial machinery. Throughout the entire process, the involvement and support of the top
management was invaluable and a precondition for success.
Graphical user interface
A common language was required to make the pres See
with visualization tools
communication effective among diverse members
of the project group. The simulation model served
as a unifying link to make the group work
coherent and focused. Given the diversity of the m"
expertise of the project group members and r
knowing that most of them could not spend a Simulation model
sufficient time on the details of the modeling
language, it was decided to develop a user
friendly simulator with the intuitive graphical user
interface on top of the simulation model (fig. 1). ra
This allowed for the introduction of modeling DB |
—
concepts without alienating the members of the
project group and enabled them to converge
quickly towards the core of problem domain. Fig. I Simulator architecture
Corporate database
This paper discusses a changing role of a simulation model throughout the lifecycle of the given
re-engineering project. First of all, an aggregate model of the production line was developed.
This model, based on the expert knowledge of the production, helped to identify the critical
segment of the production line. Later a completely new model was developed. The new model
was used to focus on the details of a critical segment of the production line. Using this simulation
model, it was realized that the production process in use at that time had to be changed, because
it was not able to support the required production rate. Later, the simulation model was modified
to represent the alternative production method proposed by the project team members. Then the
simulation model was transformed into a visual simulation tool and used to present the project
results to the top management. At this stage the model served as a main discussion platform.
Simulating various scenarios helped analyze the pros and cons of alternative modifications of the
manufacturing process. As the result of these discussions, the best alternative was identified and
the required implementation initiative was activated. During these discussions, it was recognized,
that the simulation tool could be used to disseminate the new knowledge about the critical
segment of the production line throughout the organization. Namely it could be used to train the
current staff and new workers directly employed in the production segment under investigation.
Fig. 2 Screen-shots of the simulator
To construct the simulation models involved, we used a combined approach. We grounded our
study in a system dynamics methodology, but given the discreet nature of some of the production
process we were obliged to include some discreet event mechanisms into our models. The model
was developed using the Powersim Constructor modeling environment. Borland Delphi 4.0 was
used to develop the graphical user interface (fig.2), which served as a user-friendly front-end on
top of the simulation model.
The model-based study discussed in this paper served as a small-scale prototype project before
embarking on a large-scope modeling activity, which concerned the development of a corporate
model (fig.3) that relates all the main functions of the company, such as procurement,
production, logistics, human and capital resource acquisition and allocation, marketing, sales,
financing, research and development.
__| Piaggio Aero industries S.p.A.
Procurement |¢———-——______ Suppliers
‘
procucton Industrial Market
+
Investments
Human > [ Broduc’3 ] »| Marketing
Resource = | & Sales
product n
Services
po Financing
External Financial Sources
Discounting/Securitisation "4 a R&D
of Receivables ae
Gov. Subsidies a=
+4
Fig. 3 The Corporate Model structure
The Corporate Model (fig.3) and actually the development process itself should bring a number
of benefits for the company. The potential benefits could be grouped into two broad categories:
the knowledge sharing and the simulation support to the policy development and decision-
making.
The knowledge sharing
e Bring to the surface mental models of different company stakeholders in
a clear and objective way
e¢ Develop a common language to address company’s issues
e Geta broad view of the existing interrelationships between the variables
e Reinforce interactive learning process
The simulation to support policy development and decision-making
Develop a better insight to the system
Provide a safe place to test policies and decisions
Give possibility to compress time and space
Stimulate new ideas and opportunities for action
Help to identify new business opportunities.
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