Industries / Manufacturing
Model plant capacity, Six Sigma quality and supply chains under uncertainty.
ModelRisk
ModelChoice
PelicanFive-year cost of keeping four presses
10,000 futures
The plan's $426k holds in 42.2% of futures. Simulated, the mean is $920k, and one new press saves $156k on average.
Clients in manufacturing
The lifecycle
From the drawing to the warranty claim, each stage has its own question. Pick one to jump to it.
Questions we answer
Charts marked with a model code come from a free example model you can open in Excel. The others are marked illustrative.
ModelRiskWorst-case tolerancing says the gap can close completely; root-sum-square says 1,545 parts per million out of specification. Simulating the parts as they are really made gives 8,799, and shows which two changes bring it to 1,400.
ModelRiskEvery part costs $40 to make and every part short costs $250. A run of 5,000 has the lowest expected cost. If the 3% defect rate were known exactly it would always meet the order; known only from 400 inspected parts, it meets it in 80.8% of futures.
Meets the order 80.8% · expected cost $201.5k
ModelRiskFour machines run in series, so a stop anywhere stops the line. The capper causes 41% of the downtime; a standby capper cuts it from 103.7 to 66.1 hours a year on average and pays for itself in 83.8% of years.
Mean 103.7 h · availability 98.27%
ModelRiskTreat each supplier's outages as random events of random length, including a regional disaster that stops two suppliers at once. Thirty days of stock gives the lowest average cost; insurance gives the smallest 1-in-100 year.
ModelChoiceA consumer electronics maker weighs its sourcing after recent global disruptions. Staying with the offshore supplier, with better audits and buffer stock, has the best expected value, $12.1M; building its own factory comes out at $2.3M.
ModelRiskNobody knows yet whether the redesigned drill fails less than the old one. The year's warranty cost is $69.3k on average and $88.9k in a 1-in-20 year, and the year-end reserve needs $38.8k on average.
PelicanOne shared register for every plant, with owners and actions. It takes in results from your ModelRisk models, so the register and the numbers stay in step.
| Site | Risk | Owner | Before | After | Status |
|---|---|---|---|---|---|
| Plant A, castings | Single foundry in a typhoon region | Supply chain lead | 20 | 9 | Mitigating |
| Plant B, assembly | Capper failures stop the line | Maintenance manager | 16 | 6 | Mitigating |
| Plant C, moulding | Demand outgrows four presses | Operations director | 15 | 8 | Open |
| Group | Warranty claims on the new drill | Quality manager | 12 | 6 | Open |
| Plant A, castings | Energy price spike | Finance controller | 12 | 4 | Mitigating |
How it fits together
The same risks feed the models and the decisions, and the results go back to the register.
PelicanCapture the risksSupplier, plant and product risks with owners and actions, site by site.ModelRiskQuantify themYield, downtime, disruption and warranty ranges give the cost at each confidence level.ModelChoiceChoose the responseLay out the protections with their risks and roll the tree back.PelicanReport backResults return to the register for plant reviews and the group view.Free example models
Yield, tolerance, reliability, inventory, warranty, disruption and capacity models, and a sourcing decision tree. Each one opens in Excel.
Production Yield and ScrapHow many parts must we make to deliver 4,800 good ones?Tolerance Stack-Up and Process CapabilityWill the assembly's gap stay within specification?Reliability and Availability of a Production LineHow often will the line stop, what does it cost, and is a standby machine worth it?Inventory Policy under Uncertain Demand and Lead TimeWhen should we reorder?Warranty Cost ForecastWhat will this year's sales cost in warranty claims, and when?Supply-Chain DisruptionWhat do supplier disruptions cost us, and which protection pays?Capacity Expansion DecisionHow many presses should we add?Supply Chain Resilience DecisionA consumer electronics manufacturer sources critical components from a single offshore supplier.Training
Risk analysis modelling courses can focus on your industry and on the problems you model, online or face-to-face.
See the coursesConsulting
Our consultants review one of your own models before a critical decision or a public review.
See consultingFAQ
Because it assumes every part is centred and normally distributed. In the free tolerance example, root-sum-square says 1,545 parts per million out of specification; simulating the parts as they are really made gives 8,799.
Enough for the demand during the lead time as it really is, including the delayed orders. In the free inventory example the Normal formula, aiming for 95% of cycles without a stock-out, delivers 91.5%.
No. ModelRisk and ModelChoice are Excel add-ins: you add ranges, risk events and decisions to the workbooks you already have.
Yes. ModelRisk and ModelChoice each have a free 15-day trial, and our team can go through one of your own models with you. For Pelican, we will show it to you on risks like yours.
Free 15-day trials of ModelRisk, ModelChoice and Tamara. For Pelican, we'll show it to you on risks like yours.
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