Digital twins in supply chain industry

This panel discussion discussed digital twin technology and how it benefits the supply chain industry. As of now, a digital twin is a pretty new concept used for the virtual simulation model of a real supply chain, further analyses of dynamics, and prediction of process success.

What is a digital twin in the Supply Chain

The digital twin is the technology of real-time simulation of a specific object or process from real life and further predicting its behavior. So, it could be implemented in the supply chain industry in many ways. “This is a very detailed digital model of business processes that allows a realistic simulation of the business’s future. That can include KPIs, demand, and inventory that company will have. It’s a window to our future,” said Alex Koshulko, CEO & Co-founder at GMDH Streamline.

What is the purpose of creating a digital twin

Generally, this is an assessment of different risks, especially potential disruption. It’s all about supply chain resilience and this can help to generate alerts, predict KPIs like service levels, profitability, turnover, etc.

Using artificial intelligence and advanced analytics, the digital twin simulates the supply chain’s performance, including the complexity that drives stockouts and overstocks. It identifies on earlier stages potential risks and better plans transportation resources. Overall, the digital twin addresses companies’ challenges related to inventory.

How does the digital twin help in earlier stages to identify potential risks

The technology helps for short-term planning and execution. Thus, companies can minimize the losses from misalignment of plans, system constraints, and latent bottlenecks. The insights will enable the company to align maintenance plans and inventory build-ups with market demand.

Digital twins connect all information available such as inventory levels, suppliers, sales details, and lots of parameters. Then, it uses AI to integrate and analyze this information, uses machine learning to predict accurately. According to Gartner, 75% of organizations would be implementing digital twins by 2022. “Companies are going to do a simulation on a real-time basis on all the information available in order to be able to predict risks that will be useful for decision making,” said Sheetal Yadav, GMDH Streamline’s Associate Partner, Chief Operating Officer at Anamind.

“We work with global supply chains, gather information real-time, and do very complex data analyses from micro and macro perspectives. Thus, enable us to prepare cognizant plans and react very quickly to disruptions in the global supply chain,” said Artur Janyst, GMDH Streamline’s Associate Partner, Managing Director at LPE Poland.

How can the digital twin optimize sales and operations planning (S&OP)

“Digital twin integrates the data collected from Excel sheets, planning software, IoT devices to create an accurate digital representation of the entire manufacturing process. So, basically, the digital twin will enhance demand and production plans, S&OP plans, and every other initiative to run on its optimal capacity. So, the digital twin can help the S&OP process to enhance the master production plan,” said Samir Harb, GMDH Streamline’s Associate Partner, ERP&BI&Supply Chain Expert.

How Digital twins can benefit midterm and long-term decision-making

We are completely inefficient in transportation right now. That’s why the biggest transport companies, logistics providers started the projects of implementing a digital twin to prepare redesign of the transport system, to build transport hubs, to move trucks. And everything is impossible without digital twin technology. So, if you want to make strategic decisions and tactical decisions you have to base on algorithms and machine learning.

What kind of companies need digital twin solutions

The more complex the supply chain, the more benefits it gets from the implementation of the digital twin. So, enterprise companies and medium-size companies will mostly benefit from this technology.

One piece of advice

“My advice would be to set the gathering stage first of all. Because if you don’t have all the data, other things might not be possible. First, any company should focus on the factors that influence the supply chain process, then collect all the data. Having the historical data company then can use AI, machine learning, and other technologies to make that data accurate. The further company steps would be to use this information for modeling and simulation,” said Sheetal Yadav.

“When we talk about supply chain, companies have six or seven areas to focus on, but it depends on the stack of business. Digital technology in the delivery differs from digital technology in manufacturing. And implementation of digital technologies should focus on the areas company wants to improve. Overall, implementation of digital solutions could be challenging, but it depends on the infrastructure company has,” said Samir Harb. “Company need to define input areas where you need capture all the information needed, consider it, and take action after the simulation for the optimization of your process.”

“Company needs to specify process they want to improve and the data they need to gather because the number of sensors that could be implemented almost uncountable. So, the company needs to decide which processes and measurements they need and then implement the suggestion step-by-step. Further analysis will show that the company achieves better results after implementing digital twin technology,” said Artur Janyst.

“In order digital twin be accurate, companies should keep their systems tightly integrated. I’m talking about digital twin, inventory, and demand planning systems. That will improve the company’s accuracy. It’s a great tool to improve sales, planning efficiency, inventory level optimization, reduce expenses and increase profitability. Unlock its potential,” said Alex Koshulko.

The digital twin is a pretty new concept used for the virtual simulation model of a real supply chain, further analyses of dynamics, and prediction of process success. Digital twin technology is also available in Streamline. Learn how to implement Digital twin in your company using Streamline.