The “digital twin” – what does it mean for the Supply Chain 4.0?

conversation with Jürgen Schulz, Managing Director of LOCOM Consulting GmbH

 

What is a “digital twin”?

We call a data- and rule-based, realistic and detailed model of the supply chain “Digital Twin”. The “Twin” contains real orders and order data, routing rules, for mapping capacities and resources, up to realistic cost calculations based on process costs.
Some customers only focus on the upstream part of the entire value chain, while others focus on distribution (or downstream).

The concept of the Digital Twin originates from production; how does this fit into the field of logistics consulting and supply chain software?

The challenges for supply chain managers due to volatility of demand, shorter life cycles, fluctuating transport prices, etc. have increased dramatically.
Without the support of concepts such as the “Twin”, it is a difficult task to take these complex interrelationships adequately into account in tactical or operational decisions. The twin opens up the simulation of different approaches and significantly increases transparency about the advantages and disadvantages of certain decisions. In this respect, the Digital Twin helps as a tool in the consulting situation as well as a tool in the company.

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The combination of project experience, logistical know-how and in-depth knowledge of data […] are the success factors for a successful digital twin approach

How can companies actually benefit from Digital Twins for their “Supply Chain 4.0”? What contribution can specialised consultancy make here?

The combination of project experience, logistical know-how and in-depth knowledge of data, tools and digital twin technology are the most important success factors for a successful digital twin approach.

Only one consultant (without a tool), or only one tool (without experienced configuration support) is often too short, because the objectives and interests do not match the silo-wide concept of the Digital Twin. We have had very positive experiences with the configuration of a Digital Twin with a mixture of consultants and software experts.

According to Gartner, the Digital Twin is one of the ten top technology trends (as of 2017). According to the analysts, it will be another five years before the technology is fully mature – what is your assessment?

The customer feedback and interest in our supply chain-focused version of the Digital Twin is high, we think an evolutionary development will be the right development for all involved users and suppliers. It is necessary to combine two perspectives that are far apart in the daily life of the company. Or in other words: the operational control level with its specific data and a strategic planning level.
In our experience, the combination is initially challenging, but when the first results are available it is exciting and very motivating because the new transparency gives a real boost. Therefore I can only encourage and recommend to start with a pilot in a limited area, to check if there are benefits, and then to gradually increase the coverage of the Digital Twin in an agile approach. Then the discussion about maturity mentioned above is a rather academic limit…