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The Digital Supply Chain Twin: An Imperative for Supply Chain Resiliency & Relevancy

By Matt Tichon  January 14, 2021

Five key takeaways from my session at World Digital Supply Chain & Logistics Summit in December 2020

The concept of a digital twin has been around for decades. The most easily understood example is a flight simulator where pilots can test out responses to changing conditions to determine which actions will lead to a safe landing. This type of training allows most of us to have “blind faith” that our pilots will get us safely back to the ground no matter the situations they may encounter. What if you were able to have that same level of faith in your supply chain? This is quickly becoming a reality when companies utilize a digital twin of their supply chain.

Five Key Takeaways for the Digital Twin:

  1. Decisions need to be interconnected and outside-in. Historically applications were developed to optimize decisions within a given function of the supply chain. This antiquated approach leaves significant cost savings and service improvements unrealized. The digital supply chain twin allows you to evaluate end-to-end supply chain decisions in the context of their impact on total cost, service, efficiencies, and agility.
  2. AI-powered technologies allow for significant innovation without massive rip and replace. A digital twin makes your existing systems better. Extend the shelf-life of your current software investments by extracting key data from your current ERP systems and then testing out what-if scenarios in a virtual environment that allows for experimentation with the guidance of AI-powered analytics. Once you determine your organization’s best decisions, you can push the resulting master data settings back into your transaction systems to achieve a known outcome.
  3. The supply chain digital twin’s self-service deployment is possible: Democratize decisioning with AI by deploying micro applications designed for your citizen data scientists. Taking this approach allows you to increase your organization’s decision-making capacity and speed to bypass data science organizations’ human constraints.
  4. Transformation happens in bite sizes, yet they need guidance from an overarching vision of what’s possible. Most supply chain decisions are made one at a time, much like the adage of how one “eats an elephant.” The digital supply chain twin allows your company to evaluate and order a myriad of options in the context of an overarching plan.
  5. Disruptions are here to stay; the power is in anticipating them and having pre-determined playbooks. Much like sports teams develop pre-designed playbooks to respond to potential plays from the other team appropriately, you can take the same approach with your supply chain. Creating a contingency plan for plausible scenarios will put your company in the strongest position to react when the disruption occurs. As we know, when it comes to disruption, it’s always a matter of when not if.

Watch the full video below: