In order to improve the recognition of faulty situations, model-based fault detection can be used together with signal processing methods. In this study, faults and abnormalities of a reel are studied by employing the multibody simulation approach. The reel under consideration consists of a number of subsystems, including hydraulics, electrical drives, and mechanical parts. These subsystems are coupled by joints, friction forces, and contact forces. Using the multibody simulation approach, the complete model of the reel can be obtained by coupling different subsystems together. Three well-known multibody formulations, a method of Lagrange multipliers, an Augmented Lagrangian method, and a method based on projection matrix , are briefly described and compared in order to find out the most efficient method for simulating the studied reel. Although this study is focused on the simulation of fault scenarios, the introduced multibody simulation approach can be utilized in real-time simulation. This makes it possible to apply the model to an existing reel.