Inventory Optimization in a Machine Shop Using Discrete Event Simulation

Discrete Event Simulation (DES) is one of many different tools and methods used in the analysis and optimization of manufacturing process. However, complexity in the process and rather large-scale data creates the need of a multi-disciplinary optimization tool for effective results. This study showcases optimization coupled with simulation for a machine shop. The machine shop in question manufactures shafts, gears and housing parts for several products catering to multiple assembly units.

A virtual model of the machine shop is created in Tecnomatix Plant Simulation using Discrete Event simulation methodology. The inventory reordering logic and value followed by the shop is mapped on a per part basis for supermarket area. The system is linked to an external optimization tool for inventory optimisation.

The optimization workflow is set up in modeFRONTIER to reduce the inventory in the system by minimising the individual reorder values. Constraints are also mapped to prevent any loss of throughput during optimization. Further, multiple optimization strategies are tried for fastest convergence. The fastest optimisation strategy is selected for inventory optimization as per varying demand. The optimizations are run with changed sets of inputs at intervals and the results used periodically to make the system more efficient and in control.