What is a digital twin for supply chains?

If you’ve talked to any AI-based platform before (ourselves included), you’ve probably come across the term “digital twin.” A digital twin is a virtual representation of something from the real world. It can represent anything from a single object, like a wind turbine, to whole systems, like the UK's wind power farms and grid.  Often, it’s used to describe the ways that AI can help you plan and predict the way certain factors or changes are likely to impact the real-life object or system.

 

What is a supply chain digital twin?

In supply chains, a digital twin is a virtual copy of your whole supply chain network. Because a digital twin is built out of data in real-time, which means it can reflect what’s happening in your supply chain with greater clarity. This can impact everything from supply planning to risk monitoring.

These digital versions of your supply chain are made by combining large amounts of data about how the object or system works. That data is then processed by an AI (meet LEO) to run simulations, see current performance levels and get early awareness of potential problems. 

 

Read more: AI in logistics - the secret to a resilient business strategy

 

How supply chain digital twins can be used

Supply chain leaders can use digital twins for a wide variety of reasons. Unlike regular simulation models, digital twins use real-time data from both your actual databases and supply chain interactions across your network. This more encompassing view is what makes them so powerful. Digital twins can help with many different areas of supply chain management, such as:

 

Identifying bottlenecks

Because all of your supply chain data is flowing through a digital twin in real-time, you can use them to see when things are going wrong or simply not as smooth as you’d like. This is particularly helpful if you use third-party providers. Normally, you wouldn’t have much insight into how that part of your supply chain is performing. With a digital twin, you’ll be able to see that without relying on customer feedback after the fact.

 

Supply planning

The past few years have put global supply chains into an uneasy state where historical data no longer is enough to predict inventory needs. This is another area where real-time data shines. By being able to visualise the inventory demand as it happens, you’ll be better positioned to make strategic choices about your inventory. Digital twins make supply planning more accurate and more agile in the event of new, wide-scale change.

 

Contingency testing

Global supply chain disruption has become the norm in recent years and it looks like that will continue for the foreseeable future. Supply chain leaders can use their digital twin to test potential future changes to counter this turbulence. This could be for something as complicated as testing for vulnerability if certain political climates change or as simple as testing a new warehouse location.

Learn more: Supply chain resilience for 2022 and beyond

 

Decision intelligence

In our fast-paced, digital world, decisions often need to happen fast. Whether that is deciding which fulfilment location should be used or how to rapidly reorient your usual supply chain routes, your business won’t pause for you to weigh all of the options. But AI can do it seamlessly enough that you don’t have to.

 

Digital twins for supply chains open many valuable possibilities. Businesses with complex supply chains can use them to become more resilient through better decision making and data visibility. Having a supply chain that can adapt easily and respond quickly is crucial for modern companies. Digital twins give organisations the tools they need to create and apply that agility.

 


Interested in how digital twins can help your business become more resilient? Get in touch.