Using Location-Enabled Digital Twins to Optimize Supply Chain
While supply chains have undergone a dramatic transformation in a past decade, the last two years of Covid-19 have posed bigger challenges for this sector, with the availability of real-time data becoming a key and competitive advantage. This is where digital twins come in. A digital twin is essentially a virtual supply chain replica that consists of hundreds of assets, warehouses, logistics and inventory positions and supports the entire lifecycle, from design time, through construction and commissioning, all the way through to operations.
In a conversation with CXOToday, Abhijit Sengupta, Director and Head of Business, India, and Southeast Asia, HERE Technologies, explains how implementing a digital twin across your supply chain can deliver a range of tangible benefits. For example, most enterprises struggle to aggregate vast volumes of data from many sources into context to generate a true representation of reality. This context can be provided by location technology, which simplifies information into a visual, analytical system that can simulate not only the current but also an aspirational future.
Sengupta believes that location-enabled digital twins can help firms replicate virtual supply chains by mapping hundreds of assets, warehouses, logistics, inventory positions, personnel, and partners. Supply chain managers can spot trends, identify which areas of the chain require optimization, and make operational choices in real-time by projecting geographic information as layers on a digital map, monitored via dashboards and 3D models into digital twins. Here’s an excerpt of the interview.
The pandemic has put digital transformation of various business processes in hyper drive. Supply chains are no exception. Digitized supply chains bring in a host of benefits for enterprises. What do these benefits really mean in terms of day-to-day realities of managing a supply chain?
A digitized supply chain invariably supports businesses with better decision-making that is far more powerful with the ability to ‘predict and prescribe’. This is diametrically opposite to the conventional approach, which is mainly reactive in nature. By creating an integrated sequence of digital planning and production tools that work together, supply chain managers can gain enhanced visibility across each touchpoint in the value chain, in real-time. This, in turn, helps supply chain owners and leaders to accelerate innovation, minimize time-to-market, maximize productivity and efficiency, and optimize operational costs… all of this leading to a superior customer experience.
Digitization also breaks silos in the supply chain network and fosters greater collaboration between different stakeholders. The added near-time visibility into supplier performance can help supply chain managers develop meaningful relationships with more suppliers, thus indemnifying them against any possible disruptions across the delivery cycle. The result is a more robust, agile, and transparent supply chain adapting rapidly to ever-changing, dynamic business environments.
What can you tell us about the proliferation of digital twins in virtualization of supply chains in the new normal?
As per a report by MarketsandMarkets, the global digital twin market was valued at USD 3.1 billion in 2020 and is expected to reach USD 48.2 billion by 2026, growing at a CAGR of 58%. A digital-first business approach is driving this increased adoption of digital twin solutions across a variety of industries including automotive, healthcare, manufacturing, transport & logistics and supply chain.
To put things in perspective, the digital twin is a virtual replica of our physical world. In the supply chain industry, digital twins can mirror a company’s assets, transactions, third-party relationships, and other operational details while enabling real-time monitoring and adjustments. Companies can quickly model potential scenarios involving shifts in manufacturing lines, tracking assets, managing availability of resources, adjustments to distribution flows and proactive risk monitoring.
Digital twins also offer advanced data visualization that enables managers to draw insights that not only simplify complexities surrounding supply chain processes but also identify possible operational bottlenecks. Digital twin models of warehouses and distribution centers can be deployed to determine their design and operations. Supply chain managers may even monitor the movement and packaging work done inside enclosed spaces using 3D map models of the factory facility, allowing them to enhance ground utilization and simulate the movement of products, personnel, and material handling equipment. This helps in rapid decision making while optimizing workforce performance, ensuring their safety across the first-middle-last mile of delivery, and eventually leading to heightened customer satisfaction.
Can you give us a few examples of digital twin applications in supply chain management?
With unparalleled capabilities to track, monitor, and diagnose assets, digital twins have found multiple applications in supply chain management. For example, inventory management is a constant struggle for most firms. Businesses must decide how much of what needs to be kept and where it should be kept, all while focusing on enhancing client satisfaction at the lowest possible cost. This necessitates a complex decision-making process involving various variables, particularly in cases involving large inventories or if a company’s customers are spread across countries. A digital twin is uniquely fit to help here. Companies can address the optimization of inventory across a single warehouse or an entire network by incorporating demand forecasts into replenishment policies, adjusting inventory levels in response to the demand to avoid stock-outs and lowering overall costs at the same time.
Product packaging can be virtualized through digital twins and the digital form can be tested for defects before being deployed. For instance, supply chain managers can find out how various packaging methods impact the product or predict if the material used for packaging is appropriate across weather conditions or sustainable for a longer duration. Using data collected by IoT sensors, digital twins can help in ascertaining material feasibility, monitor any damage to reusable container fleets and identify any design flaws that can be rectified before future deliveries.
Because a digital twin is a virtual replica of the physical supply chain, it can provide a full window into a product’s journey within the network, thus setting up a dynamic delivery network. Digital twins can help supply chain managers understand a region’s infrastructure and accordingly plan delivery routes. For example, a digital twin of a road network can provide details into road layouts, traffic situation, construction sites on the delivery route, while alsodata modeling demand patterns and peak travel times. Such insights can come in handy while planning inventory storage locations or distribution routes.
At the same time, facility management at major logistic hubs and cargo ports tends to be complex and bogged down by human errors. Digital twins can come in handy to test out asset movement scenarios and improve operational efficiencies. Using advanced sensors, digital twins can track ship movements, infrastructure, weather, geographical conditions, and optimal time for cargo to arrive or depart a port, thus helping integrate operations at major global hubs.
What is the rate of adoption of digital twins by businesses, especially in APAC and India?
As per several industry estimates, the Asia-Pacific digital twin market is likely to grow substantially in the coming years. This growth can be attributed to the rise of IoT and IIoT coupled with the proliferation of smartphones in emerging economies, led by China and India. Accelerated business digitization and technological advancements in the fields of AI, machine learning, blockchain, etc. across industries such as healthcare, manufacturing, and automotive, will fuel the growth of digital twins in the region.
The promise of digital twins lies in its ability to collaborate and integrate with other emerging technologies such as Geographic Information Systems. How do you see it drive innovation in coming years?
Digital twin on its own is a promising technology that is reinventing business processes across a whole range of industries. To fully leverage its potential, it’d be critical to connect this technology with other emerging technologies- such as Geographic Information Systems (GIS). The software may be used to create digital twins that can store, combine, and analyze data that is keyed to a specific location. It also helps users detect patterns or trends, add information such as demographics or customer behavior and draw pertinent insights by adding maps and geographic insights to digital twins. This data can be accessed via dashboards, projected as layers on a digital map, or modeled as a digital twin.
GIS could also enhance the usefulness of a digital twin by allowing visualization, monitoring, and planning based on historical and real-time data about the natural and built environment. This is a huge step forward since digital twins powered by a GIS could provide dramatically improved contextual awareness in the many ways. Say, governments can build virtual replicas of urban infrastructure to build newer cities while responding to local citizen needs for energy and a better environment. For maintenance, risk mitigation, and achieving other sustainability goals, digital twins can be employed by cities to monitor and display huge networks of electricity lines, gas, and water assets. Hospitals could model digital twins of a medical center to track real-time movement of patients, doctors and medical equipment thus improving daily processes and operations. More use cases will emerge as we begin unlocking the full potential of GeoDigital twins.
How is HERE helping in streamlining supply chain operations for its customers with data and digital twins?
We provide products, solutions, and services to help businesses in planning, routing, dispatching and more. Our focus is to help our customers make the best out of the opportunities of location technology to enable in their logistics use cases. Backed by comprehensive mapping content, our integrated suite of solutions and services, as well as development tools and a marketplace for data, solve complex location-based problems that can impact any company’s bottom line. In order to enable and accelerate the transformation of data into business value in an efficient and scalable fashion, we also have the HERE Platform as a neutral and secure solution where the customer can create, enrich, and license location-centric data and services.
Our web-based APIs and native iOS and Android-based SDKs help us work closely with partners, local solution providers and system integrators to create an integrated end-to-end service offering.We believe in partnership, co-development, and co-creation. And where customers have their own System Integrator or System Vendor, we work with them directly to ensure our solutions get integrated with our data complied into their own systems.
