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SIMULATIONMETHODSANDEDUCATIONALGAMES:APPLICATIONAREASFORLEARNINGANDSTRATEGICDECISION-MAKINGINMANUFACTURINGOPERATIONSMARCOSEMINI(1,HAKONFAUSKE(2,OLASTRANDHAGEN(21)NorwegianUniversityofScience,DepartmentofProduction&QualityEngineeringNTNUValgrinda,N-7491Trondheim,NorwayMarco.semini@ntnu.no2)SINTEFTechnologyandSociety,LogisticsS.P.Andersensvei5,N-7465Trondheim,NorwayHakon.fauske@sintef.no;jan.strandhagen@sintef.noABSTRACTAwidespectreofdifferenttypesofquantitativemodelsisavailabletoaddressstrategicoperationsmanagementdecisionproblems.Thispaperarguesthatbusinessgamesareanalternativeto“traditional”discrete-eventandcontinuoussimulationmethodsforanalysingcomplexsupplychainproblems.Businessgamescapturetheorganizationalandhumanaspectsinsupplychainproblemsthataredifficulttomodelwithtraditionalsimulationmethods.ThecomputerizedversionoftheBeerGameisanexampleoftheuseofbusinessgamesinsupplychaindecisionmaking.TherecommendationofbusinessgamesisbasedonasimulationapplicationsurveycarriedoutbytheauthorsandthetheoreticalapproachofFloodandJackson(1991).INTRODUCTIONInthefieldofproductionandoperationsmanagement,quantitativemodellinghaslongbeenanormalandwell-acceptedacademicwayofdealingwithcomplexissues(Meredithetal,1989).Thereisawidespectreofdifferenttypesofquantitativemodelsavailabletoaddressoperationsmanagementdecisionproblems,rangingfromsimplestaticspreadsheetmodelstoadvancedmathematicaloptimisationandsimulationmodels.Inthispaper,theapplicabilityofsimulationtoproductionandoperationslearninganddecision-makingisdiscussed.Inparticular,itslimitationstotherepresentationofbehaviouralfactorsarediscussedandbusinessgamessuggestedasanalternative.Computerizedversionsofbusinessgamescanbeconsideredasanextensionofsimulation,wherethemanagersthemselvesoperateinteractivelywithinthesimulatedsystem.Thepurposeofthispaperisto•presentapplicationareasoftraditionalsimulationforlearningandstrategicdecision-makinginmanufacturingoperationsbymeansofanapplicationssurvey,•explain,bymeansofexistingtheory,thelimiteduseofsimulationsformacroscopicsupplychainissues,amajorfindingfromthesurvey,and•suggestbusinessgamesasamoreappropriatemethodforlearningandstrategicdecision-makinginthemacroscopicsupplychainsetting.Thepaperisstructuredinthefollowingway.First,manufacturingoperationsdecisionsarecategorizedbytheirscope.Next,simulationandbusinessgamesarepresentedasmethodsforlearninganddecision-supportinmanufacturingoperations.Findingsfromarecentapplicationssurveyarethenusedtoassesstheappropriatenessofsimulationforlearninganddecision-supportfordifferentdecisioncategories.AtheoreticalframeworkfromTotalSystemsIntervention(FloodandJackson,1991)isusedsubsequentlytoexplainthesurveyresults.Finally,businessgamesaresuggestedasanalternativewhensimulationdoesnotappeartobeanappropriatelearninganddecision-supportmethod.CLASSIFYINGMANUFACTURINGOPERATIONSDECISIONSALONGTHEIRSCOPEManufacturingoperationsdecisionscanbeclassifiedbytheirscope,rangingfromamicroscopicorientation(suchasamachineorpieceofequipment)toamacroscopicorientationconcerningentiresupplychainsormanufacturingnetworks.McLeanandLeong(2002)providesuchaclassification,withthecategoriespresentedinfigure1.Aswillbeseen,classifyingadecisionproblemalongitsscopeisusefultoidentifywhensimulationisappropriateforlearninganddecision-making.Table1:Classifyingthescopeofdecisionsfrommicroscopictomacroscopic.DeviceEquipmentStationLine/cellDepartmentFacilityEnterpriseSupplyChainDecisionstotheleftofthecontinuousscaleshowninfigure1aremicroscopic,concerningaverylimitedpartofamanufacturingsystem,suchasmachinetools,robots,automaticallyguidedvehicles,cranes,conveyorsetc.Examplesofsuchdecisionsarecapacities,sizes,functionalitiesandtechnologiesofsuchdevicesandequipment.Asonemovestothemiddleofthescale,thescopecoversincreasinglylargerpartsofthemanufacturingsystem,suchaslines,departmentsandfacilities.Decisionsincludeplanningandscheduling,number,tasksandphysicalarrangementofresources(suchasworkstations,operatorsandWIPbuffers).Asoneapproachestherightofthescale,decisionsconcernseveralplantsinanorganizationandsupplynetworksconsistingofindependentactors.Suchdecisionsincludelocationandcapacitiesofplants,aggregatematerialandinformationflows,collaborationandcustomerrelationshipmanagement,jointplanningandforecasting,profitsharing,inventoryownership,outsourcingetc.SIMULATIONANDBUSINESSGAMESTOSUPPORTLEARNINGANDSTRATEGICDECISION-MAKINGSimulationisanumericaltechniqueforconductingexperimentsonadigitalcomputer,whichinvolvescertaintypesofmathematicalandlogicalrelationshipsnecessarytodescribethebehaviourandstructureofacomplexworldsystemoverextendedperiodsoftime(Nayloretal,1966).Thereareseveralreasonswhyasimulationstudycansupportoperationsmanagersindecisionmaking,including:•Asimulationmodelfacilitatesunderstandingoftherealsystemanditsbehaviour.•Theactualexerciseofbuildingasimulationmodelrevealspreviouslyunapparentrelationshipsandprovidesasystematicwaytoanalyzingthesituation•Asimulationmodelcanfacilitatecommunicationandprovideabasisfordiscussions.•“What-if”analysescanbecar