Evaluating the impact of design decisions on the financial performance of manufacturing companies

Abstract

Product design decisions can have a significant impact on the financial and operation performance of manufacturing companies. Therefore good analysis of the financial impact of design decisions is required if the profitability of the business is to be maximised. The product design process can be viewed as a chain of decisions which links decisions about the concept to decisions about the detail. The idea of decision chains can be extended to include the design and operation of the 'downstream' business processes which manufacture and support the product. These chains of decisions are not independent but are interrelated in a complex manner. To deal with the interdependencies requires a modelling approach which represents all the chains of decisions, to a level of detail not normally considered in the analysis of product design. The operational, control and financial elements of a manufacturing business constitute a dynamic system. These elements interact with each other and with external elements (i.e. customers and suppliers). Analysing the chain of decisions for such an environment requires the application of simulation techniques, not just to any one area of interest, but to the whole business i.e. an enterprise simulation. To investigate the capability and viability of enterprise simulation an experimental 'Whole Business Simulation' system has been developed. This system combines specialist simulation elements and standard operational applications software packages, to create a model that incorporates all the key elements of a manufacturing business, including its customers and suppliers. By means of a series of experiments, the performance of this system was compared with a range of existing analysis tools (i.e. DFX, capacity calculation, shop floor simulator, and business planner driven by a shop floor simulator).