Imagine a digital copy of yourself– a doppelganger, an identical twin in every way. This digital twin can handle all your digital tasks at home and in the workplace, seamlessly managing everything from complex calculations to daunting tasks that you might otherwise avoid. 
Even better: This twin is impervious to pain, injury, or embarrassment, working tirelessly without any limitations, unlike the human body. Sounds mind-boggling, right? 

Now, shift this concept to the world of supply chains, where digital twins aren’t just a concept but a powerful reality. For businesses, certainty is extremely important and the digital twin helps them achieve it. By replicating the supply chain process, digital twins are enabling companies to optimize performance, reduce risks, and drive innovation in ways that were once unimaginable.  

Therefore, this concept is emerging as a game-changer for enterprises revolutionizing their supply chain operations.   

In this blog, we’ll explore the evolving world of digital twins in supply chain management, their role in providing real-time insights, and their applications in predictive maintenance and inventory management. So, let’s begin. 

What are Digital Twins and How Do They Work? 

Digital Twins are virtual replicas/representations of real-world entities such as systems, persons, objects, or processes. They are designed to digitally represent, understand, and portray the structure of these physical entities accurately. These digital representations are made using data gathered from sensors and other devices embedded in the physical entity and synchronize with their historical and real-time data. These replicas can be of a jet engine, a building, a process, a big city, or even a field.  

The concept of digital twins originated in manufacturing but has since expanded to various domains, including health care, urban planning, and supply chain management. They integrate techs like IoT (Internet of Things) sensors, AI (Artificial Intelligence), Cloud Computing, Simulation, Visualization, and Advanced Analytics. 

A digital twin continuously collects information from the physical objects it replicates. This information includes everything from operational parameters like temperature and pressure to environmental conditions and usage patterns. By integrating IoT, AI, ML, and advanced analytics into the gathered data, professionals can create a digital model of the physical object.  

Understanding Digital Twins in the Supply Chain 

Digital twins in the supply chain are digital models that replicate the characteristics, behavior, and workings of the physical supply chain processes. They display everything involved in the supply chain management process, including machines, warehouses, manufacturers, distribution centers, transportation routes, and more. 

The purpose of these twins is to get a comprehensive and real-time view of the entire supply chain. This enables businesses to monitor, analyze, and optimize their supply chain operations more effectively.  

By creating a digital twin, companies can simulate situations, predict outcomes, and optimize performance without risking the actual supply chain. Furthermore, these twins help supply chain managers detect issues, improve efficiency, and enhance decision-making. 

The Role of Digital Twins in Supply Chain Management 
Digital twins play a transformative role in supply chain management by offering real-time visibility, enabling predictive analytics, and improving decision-making. Here we’ll discuss some pivotal roles of digital twins in the supply chain process. 
 
1. Live Monitoring  
Digital twins use sensors to provide a continuous, real-time view of the supply chain operations. This live information enables managers to monitor current performance and respond quickly with an action. 

2. Demand Forecasting 
By interpreting and analyzing real-time and historical supply chain data, digital twins can forecast demands. This helps businesses optimize their inventory levels and reduce the risks of overstocking or stockout. 

3. Supply Chain Optimization 
Digital twins can study various factors, such as transportation routes and warehouse efficiency to identify areas for improvement and suggest ways to optimize them, leading to cost savings and enhanced productivity.   

For example, DHL has built a digital twin of its warehouse in Asia for Tetra Pak (a food packaging enterprise) to collect real-time information from its physical warehouse. As a result, its team can track the performance and look for alternate storage solutions. 

4. Risk Management 
Another critical role of digital twins is simulating potential disruptions, like supplier delays or transportation bottlenecks. This early risk detection allows companies to develop contingency plans and mitigate risks promptly. 

5. Predictive Maintenance 

Digital twins can predict potential failures by simulating the behavior of equipment and machinery. This allows supply chain managers to prepare for proactive maintenance and reduce downtime. 

6. Collaboration and Transparency 
Digital twins enhance communication and improve collaboration across the supply chain. This occurs by providing a shared and accurate view of operations to all stakeholders, resulting in a transparent approach.  

7. Sustainability Initiatives 

By optimizing processes, limiting energy consumption, and reducing waste, digital twins contribute to a more sustainable supply chain. This practice empowers companies to meet environmental goals and global standards. 

Microsoft is leveraging digital twin technology. It has successfully incorporated carbon emission data into its core metric and reduced carbon emissions by 40% while gaining profitability. 

Applications of Digital Twins in Predictive Maintenance 

Predictive maintenance is a proactive approach that focuses on early detection of failures or disruptions. Digital twins play a crucial role in this process by providing a virtual representation of physical entities, allowing businesses to monitor and analyze their condition in real time. Following are some ways digital twins enhance predictive maintenance: 
 
1. Real-time Tracking- Digital twins continuously track and collect data from sensors implanted in the types of equipment. This real-time data automatically feeds into the digital model, which reflects the physical entity’s condition and performance.  

2. Anomaly Detection-  Digital twins can identify anomalies and indicate errors or issues by comparing real-time data with historical performance.  

For instance, a minute increase in vibration might signal a misalignment or error in machinery. This detection will allow maintenance teams to address the problem before it leads to a massive failure. 

3. Predictive Analytics- Using advanced analytics and ML, twins analyze gathered data to predict the likelihood of a component failing. This predictive capability enables businesses to timely schedule maintenance, minimize disruptions, and extend the lifespan of components. 

4. Remote Maintenance- In some situations, digital twins offer remote maintenance, where the technical team can diagnose or fix issues without being physically present. 

5. Scenario Simulation- Digital twins can simulate “what-if” scenarios to understand how different strategies might impact operations’ performance and cost.  

For example, they can estimate the impact of delaying maintenance, enabling managers to make informed data-driven decisions that balance cost with reliability. 

Inventory Management Using Digital Twins 

Inventory management is critical to supply chain operations, involving monitoring, tracking, controlling, and optimizing inventory status. Digital Twins offers cutting-edge supply chain management solutions for enhancing inventory management by providing a real-time view of inventory across the entire supply chain. 
 
1. Inventory Visibility and Transparency- Digital twins provide a clear and transparent view of inventory across the supply chain, accessible to all the stakeholders. This enhanced visibility ensures that everyone from procurement to sales teams has access to the same accurate data. It facilitates better decision-making and collaboration. 
 
2. Optimized Supply Chain- Twins can simulate different supply chain scenarios, such as lead times and transportation disruptions. By analyzing these scenarios, businesses can find the optimal inventory stages and locations to minimize costs. This will help balance inventory across the supply chain, reduce overhead costs, and improve operational efficiency. 

3. Automated Replenishment- Based on real-time data and predictive analytics, digital twins can automate the replenishment process. When inventory levels reach a predefined threshold, digital twins automate orders to suppliers, ensuring continuous product availability while minimizing surplus stocks. 
 
4. Improved Customer Service- With precise inventory management, businesses can ensure product availability and timely delivery, ultimately enhancing customer satisfaction. Additionally, digital twins enable order fulfillment without any errors, leading to improved customer service. 

The Bottom Line 

Adopting digital twin technology in the supply chain brings a myriad of benefits. Businesses can leverage these virtual replicas to improve their supply chain efficiency, streamline operations, and bring transparency to the system. Enterprises can use them to foster innovation and gain a competitive edge in today’s business environment. 

To utilize the full potential of this emerging technology, companies should work with skilled professionals. Partner with Moglix a trusted B2B Commerce firm that offers end-to-end supply chain solutions. We have years of experience in delivering top-notch services to clients.

Explore how Moglix can help optimize your supply chain with cutting-edge procurement solutions and data-driven insights. With our expertise in supply chain management and advanced digital tools, we help businesses enhance efficiency, reduce risks, and achieve sustainable growth.