5 Ways Digital Twins Help Companies Optimize their Supply Chains

In our recent blog, FAQ: What are Digital Twins and How Can I Use Them in My Supply Chain?, we addressed some of the fundamental questions that companies are asking about digital twins right now. Of course, nothing stacks up to real-world examples when someone is trying to decipher a new technological advancement, determine where it fits into their current operations and how it will help them work better, smarter and faster. 

Continuing the conversation that we started in the FAQ, we looked at VentureBeat’s 18 ways supply chain digital twins streamline logistics, which offers up a laundry list of different ways that these tools are being used in the supply chain right now. It says supply chain twins are “growing in importance” as companies work to keep pace with disruptions caused by the pandemic, the ongoing shipping bottlenecks and other challenges.  

“The major disruptions over the past couple of years have made supply chain predictability and resiliency top priorities for businesses,” Brian Bronson, president of Americas and APAC at Capgemini Engineering, told VentureBeat. “A company’s supply chain has many steps and moving parts along the entire work stream and with each one comes another variable where more potential challenges could arise.” 

5 Ways to Put Digital Twins to Work

By anticipating these scenarios and developing alternate strategies to meet customer expectations at minimal cost, digital twins can help companies recreate shipping, trucking and other means of transport; inventory within warehouses and distribution centers; and last-mile deliveries to their destinations.  

Here are five other ways companies are using digital twins to improve supply chain management and address some of their biggest challenges right now: 

• Better strategic and operational planning. For many companies, strategic planning meant sitting down to develop a plan based on spreadsheets. According to VentureBeat, digital twins bring all the data together, allowing teams to revise these short to medium-term plans multiple times per year. “A supply chain digital twin can be used for strategic planning as it can assimilate historical enterprise, environmental, geospatial, structured and unstructured data,” NTT supply chain transformation lead Yogesh Amraotkar told the publication. Digital twins also support good operational planning, which in turn helps companies align procurement and shipping activities a few weeks to a few months out. “This considers factors like the ocean liners carrying goods for the next season and parts and raw materials for cars, trucks or industrial equipment scheduled to be manufactured over the next quarter,” VentureBeat states, noting that digital twins can also help companies keep abreast of new bottlenecks at ports and other routes to plan cost-effective alternatives. 

• Optimized warehouse and storage space. The ongoing pandemic and supply chain shortages have also created a lack of commercial warehouses and industrial space. According to CBRE’s most recent industrial market report, the US industrial market achieved record-high asking rents amid extremely tight space conditions in 2021. “Demand well outpaced supply, leading to a record low vacancy rate of 3.2% at year’s end,” CBRE adds, noting that occupiers from a diverse array of industries leased a record total of more than 1 billion sq. ft. in 2021. The average asking rent increased by 1.9% quarter-over-quarter and 11.0% year-over-year to a record-high $9.10 per square foot. Using digital twins, companies can simulate different yard and dock configurations to find the most efficient, effective way of moving materials in and out of a facility. “For example, effectively simulating different trailer positioning in the yard and prioritizing the loading and unloading sequences based on where the material will go in the warehouse,” said VentureBeat, “increases efficiency and decreases the idle time for truckers.” 

• Reduced environmental impacts. Supply chain twins could also reduce environmental impact through better decisions. For example, a digital twin could help determine when stock levels in warehouses seem sufficient for the next few weeks and recommend using ocean transportation for freight scheduled to be delivered by air. “It would have to plot new pickup routes from the factories to ports instead of airports, track space availability on relevant ships and possibly even combine goods from additional manufacturers into one container,” VentureBeat pointed out, “to further reduce costs and environmental impact.” 

• Get products to market faster. In today’s competitive business environment, getting products to market has become more complex, difficult and important than ever. Digital twins may be able to help. In Digital Twins: The Supply Chain’s New Weapon, Supply & Demand Chain Executive discusses how the time required to design and manufacture a product before it’s market-ready can take up to a year (or more) to complete. “With a digital twin,” it explained, “the entire product lifecycle can be simulated in a virtual environment, allowing companies to test and measure improvements efficiently and quickly, reducing the overall time needed to develop the product by 20 percent.” 

• Easier and more effective predictive maintenance. The days when it was okay to let a piece of equipment, machine or vehicle run until it dropped are long gone. Today, companies can use digital twins to anticipate equipment-related problems and recommend solutions before an issue turns into a monumental problem. This not only prevents excessive downtime, but it can also extend the life of the equipment itself. “The technology can continuously monitor its physical counterparts, gather real-time data through sensors, and analyze this data in real time,” S&DCE pointed out, “[thus] allowing human operators to use just-in-time methods for component replacement.”