If there is one thing that I have learned in my 30 years of working with Supply Chain Management, is that change in the only constant. Supply chains and methods of doing business in them have been evolving since the barter system. From Oliver White and MRP delivering JIT, to complicated and comprehensive ERP systems refining every aspect of how we deliver value to our customer, technology has been leading that change. Technology has been there to improve how we use data to bolster our work effort and enhance our results. All aspects of our business processes and systems have been improved by technologies that have been applied to improve them.
Now we have Digital Twin.
So, what is Digital Twin?
According to Dr. Randhir Mishra from Calfus, a PHD in Business and a Digital evangelist studying and applying Digital Twin technology, “The digital world is all about intelligent, adaptive networks. Be it at the macro level of global business alliances or at the micro level of a machinery in a remote manufacturing facility. The pursuit of the future is about the highest level of real time awareness accomplished through collection, consolidation, visualization, and analysis of data. We now see the use of science and math to truly leverage the accumulated body of knowledge through a systematic and smart autonomous confluence of technology and wisdom. A great example of the success is the ubiquity of value we see being realized by early adopters of new age technology like digital twins. In the next couple of years, we will see an exponential increase in usage and value derived through such solutions.”
Gartner defines digital twin as: A digital twin is a digital representation of a real-world entity or system. The implementation of a digital twin is an encapsulated software object or model that mirrors a unique physical object, process, organization, person or other abstraction. Data from multiple digital twins can be aggregated for a composite view across a number of real-world entities, such as a power plant or a city, and their related processes.
So how does this new technology help convert data to performance and help harvest that performance to add value to our customers? How could digital twin enhance some of our business processes or business systems? Even business processes that are manual, and business systems that are automated and sophisticated. ERP systems, or warehouse management systems, process flow systems, could all be improved using digital twin.
Let’s look at one key value KPI that our customers demand, On Time Delivery as an example.
For years continuous improvement efforts have been focused on this critical KPI. How do we deliver our orders, error free and complete to our customer on the date they requested? If I have worked on this process once, it has been worked on at least 50 times.
Traditional means of improving delivery are well known:
Improve the demand signal and predict variations in demand to predict stock outs before they happen.
Place strategic safety stock to ensure supply if there is either demand or supply variation.
Use operational excellence measures to look deeper into our operations and ferret out issues before they cause supply issues.
Use line of sight visual management to signal problems early to prevent stock outs.
Use the ERP to allow lead times and manufacturing times, demand time fences and manufacturing order sizing.
Just to name a few.
These methods are known and do in fact improve process performance and system performance. However, it is also known that physical improvements like these happen in batches and can be expensive to incorporate. Sometimes, the cost of the changes weigh against the marginal improvements making it difficult to secure funds for these initiatives.
Digital twin, on the other hand, uses all these factors and more like physical size constraints, process flow, operator movement, stock movement, time elements like wait time, even equipment placement and shop floor design to improve performance. That is real improvement that can be delivered as value to our customers in a continuous and evolutionary manner.
Digital twin provides a unified and physically context aware view of information from various technologies spanning from IIOT sensors generating real-time telemetry data to operational data sources such as CRM, SCM or ERP. This brings unprecedented power to visualize physical world on a digital platform enabled by availability of ever-increasing compute power.
Digital twin can take all the data points and process variations from many inputs and simulate changes to see what impact they will have on a given problem constraint. Say you need to improve your delivery performance 5% and needed to know what stock seems to linger too long in the warehouse. Digital twin goes a long way to identify these data points and make decisions whether to reduce those inventories and increase safety stock on the items that seem to always run out at shipment time. They have added benefit of identifying the dependencies and bottle necks that can creep in.
Digital twins can help you to prioritize capital investment process improvement by simulating the results of the moving equipment, buying transfer equipment, or rolling stock to improve overall flow. All ERP planning parameters and can be reviewed and determined the best right sizing of inventory to get the best mix of items and channels for shipping to customer. Given that this is not a solution with physical limitations but a smart digital system that constantly learns. It interprets the continuing data feeds for insights using the science and algorithms behind them. It thrives on digitally connected ecosystem and provides actionable insights for improvements without disrupting physical world. The more I think of it, the higher the excitement I have on the possibilities of improvement digital twin simulations offer.
Delivery performance is just the tip of the iceberg of what Digital Twin can do. This of a twin that could improve wait time of materials to from operation to operation. Or a twin that details the optimal position of equipment to unleash hidden capacity. Or how about looking at business process and aligning them correctly for optimal performance. Examples of improvement just abound.
Some many new technology initiatives seem to be the flavor of the month. They sound great, they conceptually seem sound but never really deliver the improvement and value they claim. I think digital twin is a game changer. The options seem limitless to how it can be used to improve our use of data. And with my narrow view of the universe, if I see substantial value, you should see it too.
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