Using simulation in risk management analysis.

Funar, Stefan Petru ; Osiceanu, Sanda ; Costache, Bogdan Mihai 等

1. INTRODUCTION

We consider here that one of the greatest challenges of a virtual enterprise is to organize and get a global prospective of projects in progress. The international business unfolding confronts the managers of the multinational companies with a series of problems regarding their business opportunities, their position on different markets and the selection of the best markets for a future successful activity (Berkowitz & Rudelius, 1999). The analysis of the manufacturing risk management is very important for the management of the company because it helps the managers to decide on the risk strategy that they could adopt and it warns the managers in time about the deterioration of the business climate and has an important role in fundament some strategies that could be adopted in critical situations (Thomson & Strikland, 1997).

Manufacturing risk management, as a component of the international management, represents the total amount of the measures taken by the companies which become international in view of diminishing this one from their operations.

In the elaboration of a multinational manufacturing risk strategy the companies should take into account the fact that:

the income they obtain doesn't belong exclusively to the foreign company; it must be a profit for the employees and for the economy of the host country as well;

the risk of the investment reduces substantially by running some initial programmes of qualification for the managers in view of a good knowledge of the foreign environment;

they could penetrate the market easier if they would become involved in a series of economical or cultural projects of public interest;

it is less risky to manage the foreign investment with the help of a mixed managerial team with local managers as well, than to let it be managed exclusively by the mother country.

they are "guests" in a completely foreign environment and they must act accordingly;

The international investment of a company can be seen as a portfolio of financial and real assets that it must administrate efficiently (Carrison, 1988).

The first element of the total risk of the international portfolio represents the systematic risk of the international portfolio, a risk that depends on the international market evolution and that cannot be eliminated. The international market has got, in this case, more descriptions: the world market, the international market or a regional market. The second risk element has got a dual character:

On the one hand, from the point of view of the international portfolio, it is about an unsystematic risk which is determined by elements that are specific to every national portfolio. On the other hand, from the point of view of the national portfolio, it is about a systematic risk which is determined by the evolution of every national market. The last element of the total risk has got an unsystematic character which is influenced by elements specific to every national portfolio, and respectively by the total risk of each title.

2. SIMULATION ROLE IN RISK MANAGEMENT

For a better management of the project in order to provide the means that make program and project success a reality and helping to create horizontal and vertical project communities in a virtual workspace we need a validation tool for project planning. Simulation is a highly effective analytical tool for assessing the quality of design of a production system relative to its ability to meet production goals of quantity and quality within constraints of operational complexity and cost. In view of the complexity of typical manufacturing systems and the high level of stochastic variability among their operations, analysis of manufacturing systems is among the most venerable and frequent of simulation application areas. This simulation project was undertaken with the goals of identifying ways of improving the risk management. We had applied our risk improvement algorithm on a case study for a pump cover manufactured at SC Mazak Group SA on a concentrate flexible cell (Cotet & al., 2007). The lab provides project planning and controlling using Primavera (a Primavera Systems software product) and also a discrete material flow simulation for the parts that are machined in the flexible cell system. In order to improve the process, one can perform a project simulation using WITNESS, which provided a realistic model of the manufacturing process and allowed to quickly and inexpensively evaluate a wide range of alternatives.

The PRIMAVERA software assures for the Project the activities flow management in the manufacturing system that we want to manage and optimize the risk management (figure 1). PRIMAVERA uses the results of Witness simulation and modifies the real flow according to this. Use of a simulation model is a surrogate for experimentation with the actual system (existing or proposed), which is usually disruptive, not cost-effective, or simply impossible. Thus, if the model is not a "close" approximation to the actual system, any conclusions derived from the model are likely to be erroneous and may result in costly decisions being made. Validation should and can be done for all models, regardless of whether the corresponding system exists in some form or whether it will be built in the future.

[FIGURE 1 OMITTED]

Working with the simulation, engineers were able to substantially improve routing logic and test mixtures and make other changes as well that they are able to increase productivity by about 50% without any additional expenditures. We propose here project based on a comparative analysis illustrating the risk improvement using material flow simulation for an industrial case study for a specific manufacturing system. First we consider the initial model of the manufacturing project, and then the material flow simulation results and we focus our conclusions on the risk management based on those simulations. After identifying the risk we will focus on our manufacturing system modification in order to improve this critical point flow transit without generate another concentrator in the flow. After that we will need to perform a new simulation of a manufacturing cycle on our modified system in order to validate this solution and we will quantify the risk improvement. For using our project planner related with the material flow simulator in a Virtual Enterprise Architecture we apply the following steps:

Step 0. In the economic lab module (M1) the project of a part manufacturing is designed and transferred using Intranet as data entry for PRIMAVERA in the simulation lab module (M2).

Step 1. In M2 an activity flow for the part is designed using PRIMAVERA.

Step 2. In M2 the PRIMAVERA project is transferred via Intranet as data entry for Witness.

Step 3. In M2 the Witness simulation of the activity flow is performed.

Step 4. In M2 the Witness activity flow is transferred as data entry for Witness material flow simulation.

The results of this simulation give the possibility to identify the risk generated for example by the human resources assigning in the discrete material flow. It is possible now to recognize the elements from M1 as they are in the model used for simulation in M2.

Step 5. In M1 the results of the Witness simulation are transferred to Primavera who is updating task activities and reviewing resources assigning to activities. The result is a new optimized project.

Step 6. The new project is transferred using Intranet as data entry for Witness activity flow in M2 in order to be validated.

3. CONCLUSION

Companies work in collaborative processes within virtual organization to a large extent which means that information concerning product definition needs to be available, communicated and transferred in a not homogeneous information system environment (Rosu & al., 2007).

In this paper we describe an approach between discrete risk management and project planning using an open platform for training the students and engineers to work in the new VE environment imposed by globalization in competition and manufacturing. We consider necessary that we find the training tools for the human resources that will be involved in this new industrial paradigm. The applications like the one presented here may be such a tool. We can validate the results of project planning on a web based system for use within any project driven, document intensive and quality assured organization.

4. REFERENCES

Berkowitz, K., Rudelius R., (1999): Marketing, Richard D. Irwin Ind., 1999.

Carrison, R., (1988): Managerial Accounting (Concepts for Planning Control Decision Making), Homewood, Illinois, 1988.

Cotet, C. E., Dragoi, G. & Carutasu, G. (2007). Material Flow & Process Synchronous Simulation In Concentrate Manufacturing Systems, Annals of DAAAM for 2007 & Proceedings of The 18th International DAAAM SYMPOSIUM, ,,Intelligent Manufacturing & Automation: Focus on Creativity, Responsibility and Ethics of Engineers", Katalinic, B. (Ed.), pp. 180-181, ISSN 1726-9679, ISBN 3-901509-58-5, Zadar, Croatia, October 2007, Publisher DAAAM International Vienna 2007.

Rosu, S. M.; Draghici, A. & Guran, M. (2007). Knowledge Transfer in the Enterprise Business Intelligence, Annals of DAAAM for 2007 & Proceedings of the 18th International DAAAM Symposium, October 24th - 27th, B. Katalinic (Ed.), published by DAAAM International, Vienna, Austria, pp. 647-648, ISBN 3-901509-58-5.

Thomson, A., Strickland, A., (1997) Strategic Management (Concepts and Cases), Homewood, Illinois, 1997.