Monte Carlo Simulations to Teach the Effect of Lean Methods to Improve Business Processes

This paper presents two Monte Carlo simulations that we use in our Operations Management course to support the teaching of Lean concepts. Students are experienced and inexperienced, international and domestic, and technically savvy and technically challenged, and the course is taught both online and on campus. The educational aims of the simulations are to teach our students: (1) the concept of variation and its impact on service system throughput; (2) how capacity buffers work and that they can add significant cost; and (3) how Lean approaches that remove non-value-added activities can result in customer experience improvements without adding significant cost. We achieve these aims through the use of two service system simulations – one that can be done manually and the other that uses Excel.