Digital twin

supply chain director

A digital twin – who wouldn’t want one of their own? A virtual copy of yourself that effortlessly takes care of the tax returns and other boring administrative activities. Then you could spend more time on the more interesting aspects of business, such as innovation and collaborative partnerships.

The use of digital twins for supply chain management has become more prevalent this year, partly due to the coronavirus pandemic and its impact on supply chains. The digital twins are virtual, dynamic replicas of complete supply chain networks comprising factories, warehouses, material flows and inventory positions and the associated capacities.

In the past, companies used simulation models to develop and evaluate different designs for a factory or warehouse. Thanks to the exponential increases in computing power, today’s digital twins can simulate a complex end-to-end supply chain.

SKF, a Swedish manufacturer of ball bearings that has 94 production locations, has been working on a globally integrated planning system based on a digital twin since 2016. Scheduling is fully automated as long as service levels and inventory levels remain within pre-defined parameters. The digital twin is fed with data from several of SKF’s IT systems and is therefore sometimes jokingly referred to as ‘just a big SQL database’.

At Medtronic, an American medical device manufacturer, the digital twin is based on supply chain network design software. It  brings together Medtronic’s complex, fragmented and decentralized supply chain in a virtual environment. It enables the company to make delivery promises based on the actual situation over the next few weeks. The various scenarios show Medtronic the impact on costs, service levels and inventory levels, leading to better decisions.

A digital twin of your own could do more than just simple paperwork. Thanks to advanced analytics and artificial intelligence, the digital twin could look into the future to test the outcome of different actions and tell you which steps you need to take and in which order. But in order for that to work, you first have to make sure the digital twin is aware of your financial, social, technological, commercial, logistical and planning-related preferences and bottlenecks.

Martijn Lofvers, Chief Trendwatcher Supply Chain Media
martijn.lofvers@supplychainmedia.nl