How digital twins could transform the supply chain

With their ability to deliver data-driven, integrated planning capabilities and deeper insights into probable outcomes, supply chain digital twins are emerging as an effective strategy to help address the key challenges facing modern supply chains.

The digital twin market is expected to grow by 40% by 2026, and while building a digital twin requires data capabilities that may stretch supply chain organizations lagging on digital transformation, the benefits are far-reaching, particularly when coupled with AI data analytics capabilities. Here's why.

What is a digital twin?

A digital twin is best described as a digital representation of a physical object or system. Through a mix of different technologies, including sensors and various other data generating sources, digital twins deliver virtual replicas of their real-world counterparts that update in real-time.

The digital twin concept was originally developed by product lifecycle management thought leader Micheal Grieves as a means by which to optimize product design and development. Digital twins have been successfully applied to product development for a number of years, delivering remarkable efficiencies: McKinsey estimates that they deliver a revenue increase of 10%, improve time to market by 50% and improve product quality by up to 25%.

More recently, there has been increased interest in the benefits of applying digital twin modelling to supply chain processes. In the supply chain, there are two types of digital twins: vertical and horizontal. A vertical digital twin represents a single component of the supply chain -- for example, a warehouse or factory. These vertical digital twins can then be linked together into more complex horizontal digital twins representing an entire end-to-end supply chain in order to create a virtual replica of a holistic supply chain system reflecting the interconnected components and processes involved.

What are the benefits of digital twins for supply chain management?

Digital twins of supply chains have a number of potential benefits:

Supply chain optimization

They can be used to optimize supply chain processes, identifying inefficiencies, and visibilizing opportunities for margin and efficiency gains.

Scenario testing

Digital twins can be used for scenario testing, without impacting the actual day-to-day operations of the real-world supply chain. Stakeholders can test the impact of disruptions, outlier events, black swan events and other factors, and develop accurate and effective strategic response plans.

Data-backed decision-making

Digital twins support advanced decision-making, providing access to deep, dynamic analytics and predictive capabilities. By nature, digital twins consolidate numerous disparate data sources into a single system, enabling stakeholders to visualize a holistic picture of disparate supply chain components and the relationships between them, all in one place.

Visibility and stakeholder alignment

A digital twin provides stakeholders with clear end-to-end visibility of real-time supply chain performance, allowing disparate organizations and participants access to a single point of truth, fostering frictionless collaboration, greater accountability and easier resolution of disputes.

Measuring and mitigating environmental impact

Digital twins can be used to model and identify more sustainable supply chain processes, such as identifying carbon-optimized routes and modes, more efficient delivery routes and GHG hot spots along the chain.

Understanding supply chain behavior

The ability to model a dynamic supply chain system in a virtual context allows for a deeper understanding of how that supply chain will react or behave when isolated variables are changed, or different conditions are applied.

Identifying bottlenecks

Digital supply chain twins have the predictive and analytical capabilities to identify current and potential supply chain bottlenecks early, so that they can be addressed before they become a costly business problem.

Visibility, efficiency and resilience: the promise of technology in the supply chain

Digital twin technology has the potential to deliver enormous efficiencies to supply chain operations. By structuring and consolidating data into a cohesive visualization of complex supply chain processes, digital twins deliver unprecedented visibility into dynamic supply chain operations, empowering stakeholders with robust data-based decision making capabilities and powerful optimization opportunities.

But in order to unlock these benefits, supply chain organizations need to ready their operations by moving toward more efficient and up-to-date data management practices.

It starts with Stargo. Stargo's AI-powered StarDox platform helps supply chain organizations transform their unstructured and semi-structured data directly into revenue. Through powerful AI-driven data management and automation, Stargo's advanced platform delivers unprecedented visibility, transparency, speed and business intelligence insights for freight and logistics organizations looking to boost margins, optimize processes and supercharge productivity.

StarDox unique AI extracts, cleanses, enriches and structures data from any source, in any format, for use in further business systems -- from ERPs and APIs to digital twins.

Try a free demo today and find out how you can deploy Stargo to transform your supply chain operation.