Reducing Uncertainty in Production System Design through Discrete Event Simulation : A case study at Volvo Construction Equipment

Abstract: In a market environment that is subject to continuous changes, companies need to adapttheir production systems in order to maintain the competitive edge. Current literatureshows that with a successful production system design, higher levels of output, eciencyand quality can be achieved.However, designing a production system is done infrequently and therefore tends tolack experience. As a result, design decisions have to be made under uncertainty due toa lack of information, structure and knowledge. In fact, the success of a design process isdirectly linked to the level of uncertainty.The purpose of this thesis is to reduce uncertainty in production system design throughDiscrete Event Simulation before an assembly system is implemented. Therefore, a theoreticalstudy was carried out dening types and sources of uncertainty in productionsystem design. Parallel to the theoretical study, a case study in Volvo ConstructionEquipment Operations Hallsberg was conducted. Discrete Event Simulation was testedas a tool to reduce uncertainty in production system design.The analysis illustrates the observed sources of uncertainty in production systemdesign cover a process, organizational, corporate, market and cultural context.The relevant uncertainty types identied in the case study in Volvo ConstructionEquipment Operations Hallsberg were environmental, system, technical, structural,temporal, lack of knowledge and lack of information. The information providedby the Discrete Event Simulation in order to reduce uncertainty are in form ofKPIs, process structure and visualization. The provided information had a positiveimpact on the degree of technical uncertainties, the lack of knowledge and thelack of information. As a result, the level of uncertainty in the Volvo ConstructionEquipment Operations Hallsberg future line designing process was reduced.