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Simulation modeling solves practical, real-life problems in a safe and efficient manner. It facilitates analysis which is presented simply and is also verifiable and intelligible. It finds application across various industries and processes. It creates value by providing comprehensible insights into complex systems. Simulation modeling is helpful when conducting experiments on actual systems may be risky, costly, impractical, time-consuming or altogether impossible.

Modeling and simulation software is widely used by scientists, mathematicians, engineers and even designers to replicate an actual process or product during the prototype phase. Using this software, they observe and analyse a product or a process, while subjecting it to various experiments based on a set of parameters. In other words, using a set of formulas and models, users are able to observe various operations through simulation. They do not need to perform the operation on an actual product, system or process.

When you think of simulation modeling, you may also relate it to physical modeling like architectural models. Simulation modeling, however, is computer-based. It uses algorithms and equations. It creates a dynamic environment that enables you to analyse and conduct experiments on valid computerised models of systems created using 2D or 3D design simulators, while those systems are running.

Unlike Excel or linear programming, simulation modeling empowers you by allowing you to analyse the model as it runs. This does not only make a system easy to understand and but also builds confidence.

  • Mathematical Modeling: This entails using simulation tools to design simulation workflows and then executing them using mathematical formulas.
  • Dynamic Modeling: Simulation tools can also be used as design simulators that display time-varying behaviour.
  • Direct Manipulation: They can facilitate human-machine interactions and use physical, reversible, and incremental actions to represent objects of interest.
  • 3D Modeling: Highly capable design simulators allow you to create three-dimensional mathematical representations of objects.
  • Graphical Modeling: Using design simulators, illustrate the conditional dependencies between two variables.
  • Reporting and Analytics: Analyse data and create reports following the simulation process.
  1. Creates a Risk-Free Environment: Various scenarios can be tested in a safe manner. They can help businesses explore different possibilities without putting systems and processes at risk. The correct decisions can be taken before actually implementing them.

  2. Saves Time and Money: Conducting experiments on simulation models is far less expensive than experimenting on actual assets. The outcome of these tests may prevent organizations from investing time and money on doing things that appear feasible on paper but may not work in reality.

  3. Enables Visualization: 2D and 3D simulation models aid visualisation. Seeing things in action builds more confidence. Animated simulation models make it much easier to verify and understand concepts and ideas and even communicate them.

  4. Provides Insight into Dynamics: The behaviour of a system can be observed over time, right down to the minutest detail.  

  5. Increases Accuracy: Simulation models are very detailed compared to analytical ones. This returns more accurate results.

  6. Minimizes Uncertainty: Any uncertainties and their outcomes can be easily represented in simulation models. Owing to this, risks can be identified and solutions can be created to contain those risks.

1. Discrete Event Simulation Modeling:

It is mostly used at operational and tactical levels. Most business processes are typically a sequence of discrete events. This is a more transaction-flow based approach. This model takes into account entities, resources and control elements.

This form of simulation is meant to animate the movement of material or information in discrete steps. For example, a truck reaches a warehouse and goes to the unloading gate where it unloads the goods and then departs. It is not ideal for modeling continuous material represented by differential equations.

For example, the flow of water through reservoirs and pipes. This method is widely used in factories, healthcare, call centres and logistics.

2. System Dynamics Modeling

This simulation tool is highly abstract. It is not a very detailed but a more generalised representation of a complex system. Unlike the discrete event simulation tool, this method is more appropriate to model material or information that is moving continuously.

This tool may be used for long-term, strategic modeling and simulation. For example, an organization may simulate and analyse ideas for a marketing campaign without having to model individual interactions with customers.

3. Agent-Based Simulation Modeling:

While the discrete event method is process-focussed and the system dynamics tool is more abstract, agent-based modeling is focused on individual active components of a system. Active entities or agents that may be relevant to the system, such as people, household, vehicles, products, equipment or companies are identified.

Then, their behaviour is defined. To run simulations, connections between them are made and environmental variables are set.

4. Multimethod Simulation Modeling

You may have noticed that each of these simulation tools have their strengths and limitations. Multimethod modeling seamlessly integrates the different methods to overcome the limitations of individual methods and make the most of them.

The goal is to create efficient models that are easy to manage, without having to use any workarounds. Most modeling and simulation software solutions use this method to yield the best results without any compromise.     

1. Supply Chain: Supply chain is made up of a complex network of suppliers, carriers, and freight forwarders. Computer simulation software can be used to solve supply chain challenges, reduce costs and improve customer service. It aids forecasting which in turn leads to good decision making.

Here are some of the areas in which supply-chain process simulation software can help:

  • Planning and optimizing transportation
  • Optimization of the logistics network
  • Designing supply chain
  • Optimizing warehouse setup and operations

2. Manufacturing: In manufacturing, often decisions taken regarding development, optimization and reorganization are based on spreadsheets but mostly on intuition and experience. The outcomes of these decisions are also not easy to define.

They are also costly to implement. Using computer simulation software, organizations can model strategies such as Just-In-Time or Lean and see if they actually add any value.

Here are some of the areas in which simulation tools can help with manufacturing:

  • Production planning, optimization and scheduling
  • Facility design and manufacturing capacity planning, right-sizing
  • Process improvement, bottleneck analysis
  • Production line balancing
  • Resource allocation: staff and equipment
  • Inventory planning (WIP and raw materials)

3. Transportation: Transportation planning and fleet management can be very complex. Right from scheduling and maintenance, to risk management and to human resource management. Simulation modeling can help with resource planning.

It can also be used to maximize the transportation load, minimize costs, and even calculate the probability of traffic costs overrun.

Here are some of the areas in which software simulation tools can help with transportation management:

  • Strategic and tactical logistics plan definition, feasibility and costs evaluation.
  • Transport operations and fleet control that can be based on the real-time data monitoring, accumulated statistics and simulation-based forecasts
  • Fleet Management: Maintenance planning, purchases, renting or leasing of trucks, rail cars, ships, airplanes.
  • Risk assessment and risk management in transportation logistics

4. Warehouse Operations: Simulation modeling can help businesses design, plan, and optimize warehouse operations. It can help them determine the warehouse layout and bring them closer to optimized operations.   

Here are some of the areas in which they can help with warehouse operations:

  • Quantity and type of transportation and material handling equipment
  • Staff level requirements
  • Floor space requirements and layout
  • Warehouse operational expenses
  • Loading and unloading gate requirements
  • Operational timetables
  • Freight traffic flows
  • Performance metrics such as execution time, resource utilization rates, inventory levels, etc.

5. Rail Logistics: Simulation can play a crucial role in rail logistics, right from rail yard to operations planning, fleet and rail yard management, to network design, time slot allocation, and even station throughput.

Here is how computer simulation software can enhance rail logistics:

  • Station Throughput: Testing policies and reducing congestion
  • Rail yard design
  • Fleet Optimization: Locomotive and rail car management
  • Maintenance Scheduling: Spare parts, workers, and depot allocation

6. Mining: Engineering simulation software solutions have mine modeling capabilities. They can also assist with pit optimization. Modeling the constraints on vehicle movement, through the mine and around it, can refine routing and scheduling.

Software simulation tools can also help with the evaluation and forecasting of equipment utilization. This in turn optimizes lease and fleet configuration. Also, mine phase scenarios can be effectively tested, analysed, and optimized.

Simulation can aid mining operations in the following areas:

  • Planning excavations, mining phase development, pit optimization and operations analysis
  • Rate of equipment utilization, optimal fleet configuration and lease determination
  • Routing and scheduling within and around the mine
  • Dynamic mining rate forecasting and analysis

7. Oil and Gas: Optimized maintenance scheduling, the ability to forecast and allocate work in order to reduce downtime, improving preventative maintenance and increasing production are crucial activities in the oil and gas industry.

Batch congestion, storage restrictions, customer demands, and other such variables affect pipeline delivery. Containing these risks can be very lucrative.

Refinery simulation can enable effective analysis and decision making. The refinery can thus be integrated into the wider system. The transport and storage of oil and gas includes a complex network of interacting objects such as shipping, rail, and road. They all can integrate smoothly with oil and gas pipelines and storage.

Here are some of the areas in which simulation modeling software can be used in the oil and gas industry:

  • Operations planning, maintenance scheduling, routing and positioning storage management with variable conditions and demands
  • Field production optimization, minimizing disruptions and maximizing returns
  • Pipeline network design to deliver capital savings, boost revenue and deliver exceptional ROI
  • Analysis and testing of processes related to oil transfer for ports, rail, and the road refinery system

8. Ports and Terminals: Idle time and demurrage can cause substantial losses. A simulation modeling software can help minimize them by providing insights across all operational interactions in a port or terminal.

It can capture the true nature of facilities such as container terminals, including berthing, transfer, storage, multimodal transport, and staffing. The actions of port authorities also affect environmental factors such as noise, gas emissions, and particulates.

An engineering simulation software can capture all variables and can help determine if straddle carrier operations are causing a bottleneck or even help you understand the impact of increasing the number of berths. It can also clarify if tank storage changes reduce transfer times.

Here are some of the areas in which simulation tools can be leveraged for ports and terminals-

  • Strategic and tactical plan definition, feasibility, and costs evaluation
  • Container yard planning to reduce re-handling, determine optimal stack heights, and increase container throughput
  • Optimal resource management: planning of yard access, maintenance, berthing, and logistics
  • Risk assessment and risk management in port operations

9. Road Traffic:- Road infrastructure planning can be very challenging. It involves avoiding congestion, allowing for traffic growth, and meeting the requirements of budgets and also the city environment. It is necessary to forecast the effects on traffic flow to make any changes to the road network.

The impact of proposed public buildings, such as airports, stations, and stadiums into a network, or planning their onsite roads must be considered. Also, traffic light sequencing and timing, and the placement of road network objects such as parking bays, bus stops, and access lanes influence traffic flow and capacity immensely. Road network changes are a huge economic undertaking and can be extremely difficult to test in the real world.

Here are some of the areas in which engineering simulation software can be used for road traffic management-

  • Traffic planning, the simulation of changes, additions, or subtractions to a road network
  • Throughput analysis, including generating statistics for congestion and traffic jams
  • Optimizing traffic light timing and sequencing on a system wide scale
  • The integration of public objects and buildings into road networks, traffic impact assessment

10. Passenger Terminals: Simulation can help develop solutions to plan, manage and optimize pedestrian flows in public buildings such as airports, railway stations, shopping malls, and also stadiums. Managing passenger terminals typically include managing the building’s capacity, managing business processes, planning for evacuation, generating shopping and advertiser revenue and also making public transport easily accessible.

Here are some of the areas in which simulation can be used for managing passenger traffic in public buildings-

  • Evaluate building or object capacity
  • Find and avoid pedestrian bottlenecks
  • Optimize business processes at service points
  • Carry out evacuation planning
  • Assess shopping area customer traffic
  • Evaluate parking, roadway, and public transportation accessibility

11. Healthcare: Innovation with regard to healthcare policies and facilities, pharmaceutical operations, and studies in epidemiology is extremely crucial but just as risky. Healthcare simulation mitigates the risk to a large extent.

Hospital can use workflow simulation software to capture workflows and analyse metrics. Simulation models can also demonstrate capacity and resource utilization. Disease dynamics and social interactions can be modeled for epidemiological research.

Here are some of the areas in which they can be used in healthcare-

  • Hospital design, process flows, and asset placement
  • Resource utilization rates, scheduling, and returns on investment
  • Healthcare policy planning, the allocation and distribution of resources
  • Epidemic simulation in order to evaluate the spread of disease and devise mitigation strategies
  • Pharmaceutical supply chain simulation and production planning
  • Marketing and promotion in the pharmaceutical industry

12. Business Processes: Process simulation software allows you to test innovative ideas without any workplace interruptions. Current processes can be evaluated. They can be refined or changed completely.

Here are some of the areas in which process simulation software can help develop business processes-

  • Operations analysis and efficiency evaluation
  • Bottleneck identification and removal
  • Business process optimization and improvement
  • Increasing throughput while cutting costs

13. Asset and Project Management: Strategic planning software provides the power to uncover uncertainty and provide effective management, with mitigation strategies for risks and negative scenarios. Simulation models are widely used for asset management optimization and portfolio risk analysis.

It has proven results to its credit across areas as broad as vehicle fleet management, investment strategy optimization, and hardware maintenance scheduling. Simulation modeling is ideal before committing to large investments and projects, and throughout the entire lifecycle for risk analysis and resource optimization.

Here are some of the areas in which it can facilitate strategic planning for effective asset and project management-

  • Financial and investment risk analysis and evaluation, providing optimal long-term roadmaps, prioritization, and the development of mitigation strategies
  • Assess constraints and develop optimal strategies for effective project management
  • Asset management, such as fleet availability or maintenance scheduling, when presented with complex interacting schedules
  • Resource optimization in project management, maximizing profits by ranking the estimated net present value (NPV) of different projects or strategies

14. Marketing: Market simulation can enhance the effectiveness of your marketing strategies. Simulation gives you the flexibility and capacity to capture the factors and dynamics of your market. Data from your current databases can be integrated, and predictive models developed, for the analysis of future market development.

Most of the best process simulation software solutions available today can add value to marketing efforts in the following areas-

  • Consumer behavior
  • Brand loyalty and product switching
  • Promotion response
  • Competitor behavior
  • New product introduction
  • Market behaviour 

15. Social Processes: Organizations invest huge amounts to study the social nature of their key demographics. Governments need to do so in order to assess the needs of the society. Focus group and targeted studies provide limited insights.

They are also time-consuming and are not ideal to address dynamically changing issues. Simulating social processes and population dynamics can provide valuable insights, especially to government policymakers.

They can help in the following ways-

  • Country-scale models for healthcare policy evaluation and scenario testing
  • Macroeconomic systems also including individual economic agent behaviour, to precisely forecast future developments
  • Environmental problems to choose mitigation policies and evaluate possible outcomes
  • Other social processes, including those related to politics, administration, public opinion, or marketing

16. Defence: Defence systems can be developed and tested, logistical support systems can be optimized, and operation plans can be explored and evaluated for deeper insight. Military and aerospace simulation can uncover hidden savings in areas such as maintenance scheduling.

When planning civil defence, disaster response scenarios can be evaluated, and evacuation plans developed. Disaster response simulation enables the testing of plans and the development of effective contingency measures that would not be possible otherwise.

Simulation tools can help with military planning and emergency management in the following areas-

  • Maintenance scheduling, including the aerospace industry
  • Supply chain design and optimization
  • Performance-based logistics
  • Operations and evacuation planning, civil defense modeling

What was earlier considered merely an extension to designing and manufacturing in research and development is growing rapidly to aid even medical research, aviation, military training and combat. We will definitely see more and more real-life processes being simulated for a digital experience in the coming years. More and more organizations across various sectors are embracing this trend.

Manufacturing companies are beginning to realise the benefits of an integrated 3D simulation software solution for printing. Metal 3D printers are expensive and complex. 3D simulation software can function as effective design simulators. Designers can use them to learn complicated design processes. This will minimize the rate of failure and will ensure optimum usage of the 3D printer over time. Also, when parts are very complex, designers can test each of them based on various parameters to zero in on the best design, so that it can be printed.


Simulation can fuel innovation by providing businesses a safe way to test their ideas effectively before implementing them. They can empower companies by helping them make better and more confident decisions. Opting for one can potentially inject a new lease of life into your organization and steer it in the right direction. We have compiled a list of the best simulation software solutions available in the market to help you choose one for your business

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Chirantan MungaraBy Chirantan Mungara | Last Updated: October 29, 2020

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