Digital Twin: The future technology for efficient supply chain management

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Digital twin has been a recent trend in the world of digital technologies. It can be called as a virtual copy of a living or non-living entity. This digital twin can be created using the technology for any kind of asset or a process or persons or locations. Through this creation, the performance of the asset can be monitored using the Internet of Things (IoT). This kind of technology enables the communication between the real one and the virtual one, provides synchronization between both the entities and makes possible the visualization of physical asset from a distant location through the virtual entity. With the help of synchronization with various other digital technologies, the digital twin technology develops virtual models of simulation. Virtual monitoring of real asset takes place through digital twin. It uses sensors to develop a two-way communication system for a continuous update.

Digital twin concept is widely applied in healthcare, manufacturing, construction, urban planning and development of smart cities, and many other service industries. Some of the unique features of digital twin technology are connectivity, homogenization, ability to reprogram, and modularity. This concept provides some of the innovative benefits like virtual observation of product performance and visualization of an asset from far. According to Bernard Marr (2017), the IoT has enabled the cost-effective implementation of digital twin technology. The virtual objects developed through digital twin technology are also known as ‘cyber-objects’.

Digital twin technology is defined by many authors. But the most popular definitions are provided by Grieves, (2014), Bernard (2017), and Bolton et al., (2018). It is defined as a constantly updating virtual depiction of a physical object or system across its overall lifecycle, using real-time data to enable understanding, learning and reasoning.  It is also defined as a virtual model of a process, product or service. It enables integration of real and virtual objects to collect, monitor, analyze the data to prevent the occurrence of problems in the real object. Armstrong (2020) of IBM emphasizes that digital twin improves decision-making ability. Digital twin technology was first mentioned by Grieves (2002; 2014) of University of Michigan. Today, successful application of digital twin technology is being done by NASA (uses digital twins to develop new recommendations, roadmaps, and next-generation vehicles and aircraft), GE, SAP, IBM and many other companies.

Application of Digital Twin Technology in Supply Chain Management

Digital twin technology will be of immense value in supply chain in efficiently managing its complexity to enable smooth flow of information across the chain. This technology creates a simulated environment of supply chain by virtually integrating all its entities like physical assets, stock keeping units, distribution centers, and warehouses, transportation and logistics providers. This kind of environment helps in the reduction of supply chain costs, minimization of risks and improvement of operational efficiency (Sean Galea-Pace, 2020). It also improves the visibility, optimization, and proactive decision-making of members of supply chain (Schuster et al., 2020). It addresses various complex issues involved in supply chain by integrating all its members (BCG Report, 2020). Three major areas of its application are short-term planning and execution, sales and operation planning and long-term planning. Major benefits of digital twin technologies in supply chain are removal of major bottlenecks, minimization of risks across the chain, efficient inventory management, provision of continuous feedback to the members in the chain, development of agility and resilience, and finally improvement in the product availability and customer service. Monitoring of real-time supply chain situation, making dynamic adjustments based on supply and demand, and improving third-party relationships are some other major benefits. This technology provides a very detailed virtual view of supply chains enabling the manufacturers to adjust dynamically their production schedules, optimum utilization of manpower and other assets. The simulated environment helps supply chain managers to clearly visualize the entire chain virtually with the presence of same members as in the real chain. Due to this, they develop the ability to make effective and dynamic decisions by aligning them with the needs and requirements of customers. Companies will be able to provide highly accurate tracking and tracing information about their products to the customers in future through end-to-end visibility using digital twin technology. In medical and healthcare sector, usage of digital twin technology can provide customized medicines to patients based on their personal health profile from time to time. Also, this technology will be able to track medical consignments more accurately by providing location as well as temperatures during transportation of vital medicines and vaccines. This aspect is very useful during the current Covid19 pandemic situation.
In supply chains, application of digital twin is possible both at the factory-level and chain-level. During product design stage, it is possible to identify risks in the replica of the product and reduce the overall costs. This also enables the pre-evaluation of product at all stages and provides more efficient production scheduling. All operations can be done on this replica reducing the time to release the product and reduce the costs involved in developing the new product. It is expected that digital twin technology would bring more innovative changes in future in supply chain. Supply chain members across the up and downstream of the chain will be able to predict the demand and inventory levels more accurately enabling improvement of product availability to the customers. It is also expected that this technology would grow at a tremendous pace and open up many new opportunities in the next five years for budding supply chain managers and students specializing in this area. Therefore, it is essential for them to update their skills and build abilities to catch-up with this growth by pursuing courses in top colleges and top business schools of management. These courses can be pursued at bachelors or masters level.


References
Armstrong M. M., (2020) “Cheat Sheet: What is Digital Twin?” (https://www.ibm.com/blogs/internet-of-things/author/maggie-mae-armstrongibm-com/)  

Bolton, R. N.; McColl-Kennedy, Janet R.; Cheung, Lilliemay; Gallan, Andrew; Orsingher, Chiara; Witell, Lars; Zaki, Mohamed (2018). "Customer experience challenges: Bringing together digital, physical and social realms". Journal of Service Management. 29 (5): 776–808. doi:10.1108/JOSM-04-2018-0113

Bernard M., (2017) “What is digital twin technology – And why is it so important” (https://www.forbes.com/sites/bernardmarr/2017/03/06/what-is-digital-twin-technology-and-why-is-it-so-important/?sh=29d63dea2e2a)   

Schuster R., Gaurav N, and Mitiavila L (2020) “Conquering complexity in supply chains with digital twins” (https://www.bcg.com/capabilities/operations/conquering-complexity-supply-chains-digital-twins)   
Sean Galea-Pace (2020) “Evolution of digital twins in supply chain” (https://www.supplychaindigital.com/technology/evolution-digital-twins-supply-chain)
Sean Harapko (2020) “Real-time visibility and digital twin are game changers for serving the customer of the future” (https://www.ey.com/en_ae/consulting/how-digital-twin-technology-is-transforming-supply-chains)


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