Proceedings of the 2006 Winter Simulation Conference L. F. Perrone, F. P. Wieland, J. Liu, B. G. Lawson, D. M. Nicol, and R. M. Fujimoto, eds. ABSTRACT Lean methods have become the standard approach to the resolution of design and operational issues in production and other systems. However, the lean approach has defi- ciencies. The deficiencies that simulation can address are presented, discussed and illustrated. These deficiencies in- clude modeling and assessing the effects of variation, mak- ing use of all available data, validating the effects of pro- posed changes before implementation as well identifying other possible improvements, and assessing the interaction effects between system components. Various industrial applications are presented that show that simulation was required to successfully address operational issues that the lean approach failed to identify and could not resolve. 1 INTRODUCTION Lean principles are commonly used in the design and op- eration of production systems. Lean manufacturing has been defined as: "A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection" (NIST/MEP 1998). Alternatively, Spearman (2003) described lean as the efforts to minimize the kind of buffers usually found in a manufacturing system: excess capacity, excess lead time, and inventory. Tapping, Luyster, and Shuker (2003) give an overview of the lean approach. Identifying and specifying the role of simulation within the lean approach seems valuable and even neces- sary in expanding the simulation application base (Dia- mond, et. al 2002). Adams, et al. (1999) give an overview of how simulation could be used within the lean manufac- turing strategy. 1. In identifying problems in manufacturing or other processes. 2. For training operations personnel in the way the process operates. 3. For ranking the various opportunities for process improvement. 4. For documenting the process. 5. For predicting the impact of accepted improve- ments before implementation. Ferrin, Muller, and Muthler (2005) describe the bene- fits of using simulation as part of a lean – 6σ combined process. Simulation provides a more powerful tool (a 6σ capable tool) than those commonly used in a lean – 6σ process. Simulation is uniquely able to support achieving a corporate goal of finding a correct, or at least a very good, solution that meets system design and operation require- ments before implementation. The compelling reasons that simulation should be used to extend the lean process, including the one given by Fer- rin, Muller, and Muthler, are identified, described, and il- lustrated in the next section. These compelling reasons are based on deficiencies in the lean process. Industry-based case examples are given to show the necessity of using simulation in addition to lean techniques. 2 LEAN DEFICIENCIES AND SIMULATION CAPABILITIES The compelling reasons for using simulation to enhance the lean process have been identified based on numerous experiences performing simulation studies in industrial en- vironments. 1. Variation must be addressed, both random and structural. 2. Data must be fully analyzed to help understand the random nature of system behavior. 3. The interaction between system components must be assessed. WHY LEAN NEEDS SIMULATION Charles R. Standridge 301 West Fulton School of Engineering Padnos College of Engineering and Computing Grand Valley State University Grand Rapids, MI 49504 U.S.A. Jon H. Marvel Department of Management 300 North Washington Street Gettysburg College Gettysburg, PA 17325 U.S.A. 1907 1-4244-0501-7/06/$20.00 ©2006 IEEE