READY TO PLAY A GAME? SIMULATE YOUR PROFIT GAINS.
Throughout Profit Savvy we talk about several different Workflow and Inventory Models.
The Simulation Dice Game will quickly give you an impression of HOW these models work in practice.
Think that YOUR business doesn't have a Production Line?
That this doesn't apply to YOUR business?
- Restaurant - raw food comes in - meals go out
- Accountant - paper work comes in - financial statements go out
- Retail - goods arrive from a wholesaler - goods exit as sales
- Manufacturing - raw materials come in - finished products go out
All businesses have a Workflow.
Do you need to convince your staff of the pros and cons of various production systems?
Dice Games are a great way to demonstrate them at team meetings.
Now, let's model the movement of Product through your Production Line
Using Dice Games
Computer Simulations achieve the same thing, BUT, they may not be as illuminating to you as actually playing the Dice Games.
- Play with several people representing the stages in the Workflow of your Production Cycle.
- Ideally, aim for six or more stages, this will give you a stronger visualisation of the impact of your Flow Model on your actual Production.
- Each stage (people or location in your Model) should get several counters as a starting point.
- The idea is to move the counters from one stage to the next with the throw of the dice.
- Start with the entry to your Production Line, finishing with the exit from your Production Line.
- Each stage of the production line should have a dice.
The Full Article shows how to use the Dice Games and gives examples for the following:
- Unbalanced Workflow Systems
- A Balanced Line Model
- A Constrained Production System
- A Constrained Model with a Drum Beat
- How To Elevate The Constraint
- Simulation Of Centralised Inventory Management
Unbalanced Workflow Systems
Unless you have spent some time carefully thinking about your Production Flow, you probably have an Unbalanced Production System.
This means the Flow of Work through the system has not been finely tuned to the capacities of either:
- The individuals/machines at each stage
- The type of work that must happen at each stage
Therefore, Product flows through your Production System in a fairly jerky fashion, piling up at some stages and leaving other stages without anything to do.
A Balanced Line Model
One of the goals of some Workflow improvement systems, like Six Sigma and Lean, are to "Balance" the Workflow:
- The systems work in unison
- There is minimum amount of wasted effort involved in the system
Widely touted as the ideal solution, it comes with some notable defects:
- It doesn't handle variability and uncertainty very well
- The one thing that we can be confident of in business is that unexpected things can happen.
Which means that it is going to be quite difficult to achieve.
A Constrained Production System
If you haven't read about the Theory of Constraints (Profit Savvy TOC article) it is advisable to read this prior to playing the game.
TOC argues that somewhere in your Production Line there will be one station that will be a constraint, or bottleneck, which controls the flow of work through your Production System.
No matter how hard a station upstream from the Constraint works, it can only push so much through the constraint.
No matter how hard a station downstream from a Constraint works it can only process whatever is fed to it by the Constraint.
The Constraint is the heart beat of the entire Production Line.
Constrained Model With a Drum Beat
The Drum-Buffer-Rope system (Profit Savvy Drum- Buffer-Rope article) means that the Production Line marches to the beat of a single Drum.
That Drum is the Constraint.
Each time it accepts a load of input, the Drum has one beat and the "Rope" pulls one more set of products through each of the stages preceding the Constraint.
This system is a demand-pull approach where the Constraint sets the demand.
Elevate The Constraint
Introducing a Constraint, and using it as the heart beat of a system, can reduce inventory and likely increase Productivity.
From time to time the constraint is going to have problems:
- Periodic maintenance
- Power failures and so on
- Different products that pass through the Constraint have their own production lines above, and possibly below
- We are introducing uncertainty into how the Constraint can operate.
TOC teaches us that one of the important steps for working with the Constraint is to elevate it so that it gets more and more attention to keep it functioning as productively as possible.
Simulation of Centralised Inventory Management
We can also use Dice Game Simulations to demonstrate improvements that can be obtained from centralised Inventory Control.
Play the Dice Game to show:
- That the effect of variability in demand for Stock out of Regional Warehouses is much higher
- Than the variability of Stock out of a Centralised Warehouse
Consequently, the Regional Warehouses will be over and under stocked much more often than the Central Warehouse.
A simple experiment, with the Dice Game, will prove this key point about Demand variability smoothing as more events are aggregated.
Play The Dice Game
Alex Knight has 2 games that can be played online:
The standard dice game
Managing the System
Access the 2 games
on the link below
More on Profit Savvy
ProfitSavvy.org is a Not-For-Profit that distills the best available profit growth tips from leading authors and presents it to you in an easily digested format. Save the expense of buying books and the huge amount of time required to wade through them with ProfitSavvy.org
Send to a Friend
Sign up now for thought provoking free tips on making your small business perform better and more profitably.
Drill down further on interesting topics at your convenience later.
What Do YOU Want
We want these Tips to address the things you want to know more about.