Why does the supply chain need digital twin technology?
In light of the massive social, economic, and technical shifts that are transforming the globe, the average lifetime of a Fortune 500 business is currently less than 18 years. Moreover, COVID-19 has altered our regular routines in ways that were unthinkable only a few short months ago. Uncertainty about what consumers will want to purchase in the future is a new challenge for supply chains. However, the newest strains that must be controlled include cybercrime, supplier interruption, capacity restrictions, and distribution disruptions.
How can the supply chain be modified to better track economic and market data and respond to potential disruptions? In order to rebalance the production mix among factories and assign capacity to the most lucrative items, how would you model a possible change in client demands? If you want to rebalance supply/demand and distribution flows, you need to know how to anticipate supplier breakdowns or financial difficulties. Specifically, how do you plan on overseeing employees and introducing new processes? Technology such as the “digital twin” is being considered by certain businesses as a possible solution to these issues.
Supply chain execution in real-time is a goal of the most innovative companies in the industry. 60% of C-suite supply chain executives are under increasing pressure to make faster and more accurate decisions in real-time. For real-time decision-making, a clear picture of the current supply chain state and the ability to predict several outcomes is required.
The digital twin technology may increase supply chain visibility, performance, and more in times of volatility and constant upheaval. McKinsey estimates that adopting such technology may increase a company’s revenue by 10%, decrease its time to market by 50%, and increase product quality by 25%.
A supply chain designed with tomorrow’s consumers in mind
Transparent and real-time information are increasingly crucial to protect health and safety in the face of shifting customer behavior and the COVID-19 epidemic. This data will need to include not only where the product’s components came from, but also the product’s whole history, its current location along the delivery route, and an estimated time of arrival. To ensure that anticipated and actual events are in sync, end-to-end visibility into your supply chain is essential.
Furthermore, as a result of COVID-19, there has been an overall change in consumer perception about privacy concerns. According to the EY Future Consumer Index, if customers’ personal data could be used to monitor and track an illness cluster, 53% of them would be willing to share it. To capitalize on emerging markets and other growth possibilities, businesses must think about how shifting consumer attitudes and behaviors in the future may affect their current strategy. This might increase interest in novel methods of product tracking, such as digital twins.
Just how can digital twins boost supply chain transparency?
Making the proper judgments in real-time is very challenging due to the complexity of supply chain procedures and the volatility of market circumstances. To make even a single choice, supply chain managers need access to vast volumes of data, an understanding of how to interpret that data, and the ability to execute those insights more quickly and effectively than their rivals.
This is where “digital twin” technology comes into play. In the context of the supply chain, a “digital twin” is a highly accurate, real-time digital replica of the supply chain’s performance. Using artificial intelligence (AI) and powerful analytics, a digital twin can not only mirror the current status of all supply chain activities but also show you what the future may look like based on an endless number of circumstances and restrictions.
With Envision’s AI interface, you get complete insight into your operations at every level, alerts you to potential problems, suggests solutions, and gives you specific recommendations for reaching your goals. In supply chain management, digital twins can examine risks, KPIs, demand, inventory levels, supplier and sales data, and more to determine the best course of action.
However, not every business should instantly adopt a digital twin to oversee its supply chain operations. Enterprise and medium-sized organizations will benefit most from this technology due to the complexity of their supply chain management operations.
Due to the fact that the technology should cover all the fundamental supply chain management procedures, its implementation often requires the participation of almost all teams. It might make things a bit more complicated and increase the chances of making mistakes.
Having worked with hundreds of supply chain participants and specialists for 15 years, I feel qualified to offer suggestions.
The manufacturing industry’s future supply chain
Digital twins are especially beneficial to industries that use highly engineered production processes and rely heavily on capital expenditures. High-priced assets can be designed and invested in using digital twins to optimize efficiency and cost. Using a digital twin, a factory can meticulously plan out its production, which can cope with highly complicated and time-consuming processes that vary with the availability of equipment and personnel.
Factory output typically increases by 5-10% after using digital twin scheduling software due to its increased scheduling agility. Simulators have been used in heavy industry for decades. The Internet of Things, in-memory databases, algorithms, and computing power can process and model massive amounts of real-time data.
A company can be made or destroyed by doing things wrong when constructing aircraft and vehicles, as recent headlines have demonstrated. Digital twins provide supply chain analytics to industrial firms across various trade partners and deep into multiple providers. By constantly monitoring the depths of the tiers and providing early notice of a supply chain problem, the supplier control towers used by the leading industries considerably reduce supplier risk.
Here Are Three Things to Keep in Mind When Using Digital Twins
1. Collect relevant information.
Data is the new oil, as you’ve no doubt heard many times. This makes sense, given that data is the backbone of future technological endeavors.
The first step in supply chain management data collection is to identify the most critical processes. ERP would enable standardized data collection and easy retrieval in this situation. Additionally, the more information you provide the digital twin, the more accurate its analysis and projections will be.
2. Prioritize the areas you wish to work on the most.
In many cases, you may make significant progress with digital twin technologies. However, it might be laborious to manage and monitor progress for all of them simultaneously. For this reason, I suggest zeroing in on a few key regions that, if improved, will provide the most returns.
Figure out ways in which you can improve your progress. The more you optimize your supply chain process, the greater your return on investment will be.
3. Ensure everything is well connected.
The digital twin requires data from highly networked systems, like inventory and demand planning to make reliable forecasts. Ideally, before adding any technology, such as digital twins, you would try to enhance your internal processes without resorting to technology.
The ability to make sound judgments at the moment is crucial for surviving disruptions of any sort. One possible answer is to use a program that instantly identifies potential dangers and provides data-backed suggestions for improving your most critical operations. You may find that the digital twin is the ideal technological tool for this purpose.
A digital twin of a firm’s supply chain can improve customer service and business choices. As a result of hyper-personalization, consumer goods and pharmaceutical industries will have to reevaluate their business models, investments, and geographic footprints. To successfully adapt to changing market conditions, the weapons supply chain needs a digital twin.
Adapting successfully to any form of disturbance requires timely, well-considered choices. It may be helpful to have an application that instantly identifies possible threats and provides data-backed suggestions for improving your most important procedures. There is potential for the digital twin to be the ideal technological tool for doing this.
If your supply chain business needs a boost, opting for supply chain digital twins is a smart choice. Even if you have no idea, hiring a professional supply chain solution provider will help optimize your supply chain for maximum results. You must follow the steps and do whatever is mentioned in this blog to succeed with digital twinning.
