Hack the Supply Chain with Your Digital Twin
By Vikram Murthi, Vice President, Industry Strategy, LLamasoft
Psychologists refer to the happiness hack and give us tips on changing our relationships and habits to leap beyond our present melancholy and move to a state of well-being and joy. Neuroscientists are trying to hack the human brain by implanting electrodes or using functional MRI (fMRI) to get insights into its relationship to body movement, learning, memories and emotions. Marketers now resort to the growth hack, which is the utilization of low cost techniques to create buzz like social media, podcasts, webinars, blogging or email marketing. Micro-biology is undergoing a revolution with the ability to hack DNA using a technique called CRISPR-Cas9, to support a range of applications including curing cancer, creating biofuels or improving the taste and nutrition of fruits and vegetables.
Hacking your way into insights and control of complex networks
The human brain, a DNA molecule or a marketing and distribution ecosystem are examples of complex networks that are difficult to understand holistically, due to their stochastic behavior across many-to-many connections. By hacking into one or more pieces of these interconnected systems and then observing their cascading effects, we can gain tremendous insights. These insights can be used to control these systems so they behave the way we want them to. An appropriate analogy would be throwing stones into a pond with different sizes, shapes and weights and observing various ripple effects as the waves move from the center outwards.
The supply chain hack
A supply chain system is another example of a complex network – with customers, transportation lanes, warehouses, factories, suppliers, products, components and ingredients. With industries continuously being disrupted due to market pressures, external factors and internal considerations, supply chains are being driven to respond. This disruption requires fundamental supply chain policy changes related to network design, product flow paths, transportation mode selection, sourcing decisions, multi-echelon inventory planning and taxes/tariff considerations. This re-evaluation of supply chain policies is now a constant activity since the disruption is on-going and relentless. As supply chain practitioners we can hardly hack into the the real supply chain – it’s too risky. We need to assess the impact of policy changes in a risk-free manner and then deploy this in the real supply chain.
The digital supply chain twin comes to the rescue
The emerging best practice is to create an end-to-end time phased model of the supply chain. This model is being referred to as the digital twin, which encapsulates your suppliers, factories, contract manufacturers, distribution facilities, transportation lanes and customer locations. Using the digital twin, we can evaluate the complex interconnected tradeoffs in capacity, service, inventory and cost. Through the digital twin, you can hack the supply chain by running what-if scenarios and make informed policy decisions. Digital twins enable the democratization of these decisions both horizontally and vertically throughout your supply chain.
Come on folks – the time has come to embark on that hackathon with Digital Supply Chain Twins!