Model Building Saves Companies Time and Money, Increases Safety

Many in management with a business intelligence degree make some big mistakes about technology. They often assume that it’s someone else’s responsibility and that they have more important things to consider.

How wrong such people are on both counts. A look at a recent story from Chrysler Group shows just how much having a managerial grasp of technology can benefit a company. Chrysler is rolling out 3-D modeling at its transmission plant in Indiana. This is a lot more than three dimensional CAD software for designing parts:

The 3-D pre-production modeling system helps visualize all aspects of a plant, including people, parts and equipment, and then virtually test how they will work together. It was developed by Strategic Manufacturing Solutions, which like Chrysler, is based in Auburn Hills, Michigan.
[Head of Chrysler’s powertrain operations in North America and of global engineering globally Brian] Harlow said waste and worker injuries due to repetitive motion will be cut once production begins later this year as a result of pre-production 3-D modeling. Cost savings will be “significant,” he said without being specific.

Modeling isn’t a new concept. Actually, Chrysler has used it before on its factories. However, it did so with 2-D software. It is the move to 3-D, with the greater amount of information available, that will reportedly cut one percent of costs out of production. Many companies have used the technology in a variety of ways, including the following:

  • Examining the operations of supply chains to find inefficiencies.
  • Performing what-if analyses of operations before actually making a change in how a company does business.
  • Undertaking risk management on profitability and other factors as part of scenario planning.
  • Analyzing previous data and outcomes to predict future performance.
  • Visualizing and animating processes as part of business process reengineering.

To be clear, modeling and simulation technologies don’t exist in a vacuum and simply buying software will do next to nothing. Such efforts can depend on complex and sophisticated mathematics that might require some outside expertise to help create the necessary models. However, as software incorporates more intelligence, the amount of progress someone with an advanced business degree can make similarly increases. Whether in strategy, operations, data analysis, or risk management, modeling and simulation can prove invaluable tools to management. It helps uncover the quantitative aspects of business that can make effective decision making more robust and help companies obtain new degrees of efficiency and effectiveness.