The digital twin concept is winning more and more acclaim in the logistics sector. And with good reason: it can help to clarify the cause and effect of events in the supply chain with a level of precision that was previously unknown.
A digital twin provides a detailed virtual copy of the real logistics network and the processes used there. It connects the operational level with the strategic decision level.
This means that every decision can be performed or played out ahead of time, and its effect on the overall process can be evaluated on the basis of real data. "What if..." scenarios can be previewed to predict all the potential consequences. For example, what effect would a site relocation have on existing procurement and distribution processes? What consequences would extending the product assortment have on delivery frequency? How can the existing resources in a company be used in the best possible way?
A digital twin is the ideal simulation and consulting tool, enabling users to make tactical and strategic decisions with a high degree of certainty. Digital twins represent a virtual avatar of a physical system. These digital representations are built using the domain knowledge of subject matter experts as well as data collected.
The Excel-based forecasting and planning tools are not efficient under these new conditions. The volume of data is too large to manage in Excel and the results are not clear enough to identify bottlenecks and find solutions quickly.
In short, companies need a more powerful way to solve operational problems. The main objectives are:
- Forecasting business performance and predicting relevant KPIs for decision making
- Evaluating investment options - running what-if scenarios to quickly identify where best to invest
The development of a digital twin requires a simulation environment. This calls for a great deal of flexibility to successfully model different levels of business processes and manage different levels of complexity.
Benefits of Using Digital Twins
Transparency across the entire supply chain process
- Decision-making with a high degree of certainty
- Accelerated risk assessment
- Better team collaboration (S&OP)
- Real-time remote monitoring
A digital twin pays off in many ways for logistics experts. For example, increased transparency avoids waste in operational processes and ensures that capacities are utilized evenly. With the help of current digital developments, especially in the area of data analytics through higher computing power and linking of data from a wide variety of sources, new potential is emerging in various areas along the supply chain.