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Cutting Costs

Cost avoidance is an important function of simulation in strategic planning. One of GM's cereal plants wanted to replace some low-speed packaging lines with multiple-head, higher-speed lines. Simulation showed that a bottleneck downstream would hold the new, high-speed lines to only a three percent improvement in productivity -- not enough to justify new equipment. Instead, it led plant operations to restructure the packing lines that ultimately increased plant capacity.

Witness software also saved GM $500,000 by not building an unneeded loading bay. The plant was planning a new loading facility with three bays for automatic transfer of product from silos to trucks and rail cars. This combined continuous-discrete process simulation was the first time the interaction and balance between production and truck schedules/loading duration were clearly understood, according to Beaverstock. Simulation showed that two bays would adequately handle the load, saving the company the cost of building the third bay.

Lanner Group, 11000 Richmond Ave, Suite 680, Houston, TX 77042. Tel.: (713) 532-8008; Fax: (713) 532-3732. Website:

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