Digital Twin Consulting

5 Benefits of Simulation Modeling for Order Fulfillment Centers

Richard Schrade
President, Co-Founder

Order fulfillment centers are complex systems which require precise orchestration to run efficiently. Simulation modeling can make those complex systems more efficient by enabling us to test and analyze a broad range of key factors within order fulfillment centers, including mechanical designs, algorithms, and human capital.

Simulation includes recreating the behavior of an entire facility. It’s a 3D, digitally-scaled recreation that allows us to collect and analyze data very quickly. We can also run “what if” scenarios to test the system, identify problems, develop fixes, and measure improvement. 

It is useful for new facilities to dial-in designs and ensure the client is getting what they need.  Existing facilities who wish to operate more efficiently, but don’t want to go through an expensive trial-and-error process, can also benefit from simulation modeling.

Here are a few core benefits you can gain by creating a simulation model of your system:

1. Right-size your human capital

Workforce resources are commonly used for forklift, picking, packing, and loading/unloading. As labor costs continue to rise, it’s important to know that your staffing plans are scientifically-driven and rationalize the cost. Simulation recreates human tasks and tracks their utilization. Some peak periods throughout the day may dictate the right amount of staffing. Adding or removing headcount between scenarios also helps you measure cost functions of such changes.

2. Cost-justify new technologies

Is a new piece of technologically advanced equipment worth the investment? For example, replacing or augmenting forklifts with Autonomous Mobile Robots (AMRs) comes with an upfront cost and payback overtime. Similarly, adding new robotic technology follows a similar pattern of improving throughput and reliability. Simulation allows us to test the before and after to measure the net throughput gains and validate (or reject) the cost benefit of new automation before you buy.

3. Predict and remedy future mechanical constraints

Forecasting the long-term behavior of an order fulfillment center through spreadsheets and drawings is a high-risk endeavor. Simulation will uncover how connected systems truly interact, while also identifying bottlenecks and traffic buildup. It also provides future insight into a facility’s ability to grow to meet changing demand. 

4. Improve the efficiency of operational algorithms

One of the more challenging aspects of designing an order fulfillment facility is developing the logic to handle all the “what ifs” of day-to-day use. These algorithms need to be able to handle low volume days and peak days effectively and efficiently. Simulation allows us to recreate the order mixes and behaviors of many different scenarios and test the outcomes. Similarly, we can also create potentially impactful circumstances (like part of a facility going down) to test the robustness of your operational algorithms.

5. Reduce traffic jams

Whether through forklifts or on a material handling system, natural ebbs and flows of operations means some areas will become more saturated than others under certain conditions. Simulation helps uncover the magnitude of such traffic and quantifies the effect to the overall throughput of the system. If necessary, changes to the layout, algorithms, or traffic patterns will enable a safe and efficient flow on a consistent basis.

These are just a few examples of how a simulation model can help you identify key areas for improvement that will directly impact your bottom line. If you’re interested in finding out more about simulation or our other digital twin consulting services, connect with us and we’ll be happy to answer any questions.


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