02/09/2022 Microsol Resources
Incredible Ways to Optimize Supply Chain Using Digital Twins
Working as a chief supply chain officer can be challenging because you must make quick decisions in real-time. And there’s no room for mistakes. Nevertheless, the digital twin is an emerging solution for advanced supply chain players. It supports the real-time execution of the supply chain processes.
For more informed real-time decision-making, you must know what’s happening in the supply chain and assess all the possible future scenarios.
Sometimes you encounter endless disruptions and too much uncertainty that decision-making becomes daunting. But digital twins can be your best companion in visibility enhancement and betterment of performance.
Using the digital twins in the supply chain, you can achieve:
• A revenue boost by up to 10%
• Product improvement by up to 25%
• Improve the marketing time by as much as 50%
But what exactly is the supply chain digital twin?
Digital twin in the supply chain is a detailed simulation of the actual supply chain system using snapshots and real-time data to forecast the supply chain dynamics. In sectors like construction, this technology is integrated with other tools like Autodesk Revit to optimize the output.
You can use the digital twins to understand the behavior of your current supply chain and identify abnormal situations for a prompt response.
The supply chain digital twins can be helpful for:
• Discovering bottleneck
• Making sense of the supply chain behavior and dynamics
• Testing the development and changes in the supply chain
• Optimizing inventory
• Planning transportation
• Testing contingencies and monitoring risks
• Testing operations and forecasting what might happen in the coming days
• Analyzing cost to serve and cash to serve
You can get data for the digital twins from IoT devices, operational databases, and transportation and logistics databases. Vendor information like bills, invoices, CRM data, and user experiences from customer service tickets and online reviews are excellent sources of raw data for the digital twins in the supply chain.
How the Digital Twins Optimize the Supply Chain Processes
Process Optimization
You can use digital twins to improve the design tests of the supply chain operations. It moderates the transformation risks before they occur to ensure business continuity.
You can also calculate savings, potential ROI, and benefits when brainstorming the process transformation. It is possible to test different probabilities and monitor all potential risks.
The technology supports testing and discovery of the best course of action during an emergency. This tool allows you to try different solutions in a virtual environment to avoid taking uncertain actions. This enhances your business stability.
Digital twin in the supply chain is critical for optimizing the overall processes and activities.
Identify the Bottlenecks
Implementing the digital twins in the supply chain gives an end-to-end, perpetual view of bottlenecks and processes across the system. You adopt a more agile problem solution with little human intervention.
The ability to collect digital data makes this technology capable of identifying potential weaknesses across different delivery aspects.
For example, a person operating a shipment digital twin will collect sensor information to transmit updates during the shipment. The data can then help to analyze and spot the bottleneck and performance during delivery trips and transportation.
Transportation and Facility Planning
You can use the digital twin to assess how the demand and supply chain changes affect the physical locations and its supporting system when you deliver products to the customers. It helps to leverage real-time data for better planning and management of transportation resources.
Optimizing Inventory
When using the digital twins, you can access data from demand forecasting processes to minimize overall costs and stock-outs in warehousing and production.
Thus, this technology is fundamental in addressing the “single-echelon” challenge because it optimizes inventory in a single warehouse. At the same time, you’ll eliminate the “multi-echelon” challenge using the digital twins by optimizing the inventory in the entire network.
Performance Prediction in Packaging Materials
You can also apply this technology in the packaging materials to simulate packaging items and package shapes. This will help you check and determine defects before deploying the respective items, decreasing your business’s environmental and financial costs.
Factors to Consider in Implementing Digital Twins in the Supply Chain
Data Collection
Data is the new oil for steering the supply chain and other business sectors. This is not a surprising assertion because data is the pillar to the success of any technology you’ll implement today and in the future.
When deciding to adopt the digital twin, consider the key processes related to the supply chain and collect as much data as possible. Enterprise Resource Planning can be helpful here to enable you to collect data in the same format for access from a single point. The accuracy of the digital twins improves with the data volumes it uses in analysis.
Systems Integration
The accuracy of predictions relies on the efficiency with which systems are integrated. For example, you must improve your inner processes like inventory and planning before introducing the technology.
You may also need to adopt a strategy that withstands all forms of disruptions by ensuring that you make the right decisions in real-time. The best way to do this is to adopt the digital twins because it will highlight potential risks and offer data-based recommendations against foreseen hurdles.
Identify the Priority Areas
If you adopt the digital twins, you’ll have the potential to improve a wide scope of areas. But it can be overwhelming to improve them all at once.
To ensure a smooth integration of the technology, identify the areas that require urgent intervention first. These might be processes that will yield the highest benefits after optimization.
You also need to remember that implementing the digital twins is not a simple task that you can do alone or overnight. Involve all the teams to ensure that all supply chain areas are adequately covered.
We also advise you to prepare your team well before commencing this exercise because it can be daunting and result in some mistakes. But adequate preparation, teamwork, and perfect communication will optimize the outcomes.
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