Take a look at an interesting series of posts on Applying Lean Tools to University Courses by Luke Van Dongen:
Good stuff. There should be much more simulation in education in my opinion. It is effective, and as mentioned, can be used to tie concepts back to a shared experience. Some worthwhile articles on quality improvement in education: Using Systems Thinking To Improve Education [the broken link was removed] by Maury Cotter, The Trouble With “Back-to-Basics” and “Tougher Standards” by Alfie Kohn, Teaching Quality Improvement by Quality Improvement in Teaching [the broken link was removed] by Ian Hau, Applying Total Quality Management Principles To Secondary Education [the broken link was removed] by Kathleen Cotton, Using QFD to Design a TQM Course by Glenn Mazur.