The Role of Digital Twins in Supply Chain Optimization

Abstract

Digital Twins in industries enhance supply chains by optimizing efficiency, reducing costs, and ensuring responsiveness to end consumers. Digital twins are primarily used in supply chains for planning and channeling delivery processes. They are the virtual replica of an object, system, or process that updates the system with real-time data from its physical counterpart. Digital Twins enhances the supply chain processes by improving the flow of information within the supply chain, optimizing logistics, and enabling just-in-time production. Digital twin technologies also contribute towards enhancing supply chain coordination and bolstering supply chain resilience against numerous disruptions such as geopolitical events, COVID-19, etc. Using digital twin technology to enhance supply chain visibility and decision-making process helps businesses with real-time monitoring, analysis, and optimization of their supply chain operations. Businesses that have been using digital twins in supply chain optimization have been able to achieve at least a 25 to 30% reduction in their operational costs and a 30 to 50% increase in their supply chain efficiently. Also, predictive analysis using digital twin technology has been instrumental in enhancing risk mitigation strategies and reducing downtime by at least 50%. These findings highlight the potential of digital twins in achieving exceptional and end-to-end supply chain optimization. The study also shares insights on the strategic recommendations for businesses to implement the DT technology to enhance their business agility, resilience, and competitiveness in the global market. Keywords: Supply chain optimization, digital twins, Industry 4.0. Logistics, digital twin technology in business planning