Today’s guest blog is written by my colleague Joseph Yacura, who co-authored the most recent Data Quality and Innovation Study.
Supply chain innovation has been slow to materialize in most organizations. Supply chain digitization has begun, but the adoption across different industry sectors and organizations is not consistent. Digitization faces many challenges, not least of which is the quality of the data organizations have available and their relative overall digital readiness. (2019 -Third Annual Data Quality and Governance Study)
A recent article in MIT Sloan Management Review titled “How Digital Twins Are Reinventing Innovation” raises the question regarding how a digital twin for modeling a supply chain might drive innovation. Can a digital simulation of a supply chain expose both efficiency and innovation opportunities within an existing supply chain? How would such a digital twin operate and under whose authority and control?
With the rapid growth of sensors through IOT within the supply chain and the connectivity of these sensors (estimated to be 25 billion sensors worldwide by 2021), the volume of consistent high quality data is increasing beyond our human capabilities to analyze in real time. The concept of a real time digital twin might be the innovative concept that is needed to drive new forms of digital innovations in the supply chain.
The creation of a digital twin of the complete supply chain from raw material/components to processing/work in process to packaging and delivery logistics could be a significant game changer and drive innovation.
A digital twin of the total supply chain would allow for dynamic real time simulation and process optimization before any real changes would be required therefor minimizing any supply chain change risk.
The benefits of a digital twin of a complete supply chain would include:
- Real time monitoring
- Continuous evaluation for optimization and situational awareness
- Rapid prototyping and validation
- Unbiased decision making
These potential digital twin benefits could lead to:
- Improved productivity/process efficiency
- Lower total product/service costs
- Improved/consistent quality
- Shorter lead times
- Increased inventory optimization
- Shorter logistic delivery times
- Reduced energy consumption
- Reduced environmental impact
The impact of a digital twin for understanding and driving total supply change could be significant. This concept of a digital representation of the total supply chain will evolve as the key components for such a digital twin currently exist and are expanding across the supply chain.
The initial innovation will be derived from the creation and deployment of such a digital twin. Once the digital twin is created and implemented it can be the creator of innovation that is badly needed in the supply chain function.