Creating a Digital Twin to enhance Implementation Planning within Supply Chains

By Michael Carson, Group Commercial Director at Libra Europe

To support businesses with complex supply chains in developing their asset management strategy, Libra Change projects often involve the creation of a ‘Supply Chain Digital Twin,’ (SCDT) to provide a foundation for decision making and implementation.

Why use a Digital Twin?

The SCDT is a digital replica of a supply chain, giving the ability to iteratively test a series of scenarios. Having one in place enables prescriptive “what if” analysis whilst also supporting the identification of optimal solutions given a number of constraints. The creation of a SCDT enables robust and rounded decision making on the implementation of network design projects worldwide.

Creation & Use of a Digital Twin

There are a number of defined phases to implementing and leveraging the benefits of a SCDT:

1. Understand the Current Network Schematic – In the first instance, an outline of the current network would be established, understanding the interaction in the network. This gives a common framework from which to build.
2. Financial & Transactional Data Mining – Key to the development of any Digital Twin is data, both transactional and financial. Based on the above schematic, this creates an understanding and ‘picture’ of the flows through each channel in the network along with associated costs.
3. Baseline Model Creation & Validation – The culmination of the above two steps is a validated baseline model … a Digital Twin of your Supply Chain. The validation process ensures that the digital supply chain matches reality in terms of both flows and associated costs.
4. Establish Update Routines – The baseline model, and use thereafter, is built on historic data. Therefore, it is essential that capability is built in to refresh key data points whilst also allowing the integration of forecast volumes and flows.

What does this look like in reality?

The baseline model could be compared to a flight simulator at this stage – It is doing exactly what the real supply chain is doing, however, is in a ‘safe environment’ for ideas (scenarios) to be tested … What if we open Site A; how does this impact the surrounding sites? What if we acquire Business X; is there capacity in the existing network to accommodate some volume?

Therefore, the creation of a SCDT enables a business to take a strategic, holistic view of network decisions through the warehouse implementation programme, ensuring truly optimal decisions are made.

In addition, the SCDT will allow a business to evaluate and order a myriad of options in the context of an overarching plan. Implementation of a strategic plan happens in bite-size projects however, with the guidance from an overarching plan – The SCDT is the ‘living’ version of that strategy enabling a company to clearly see direction & trajectory in relation to ‘destination’ whilst also anticipating supply chain disruption and identifying opportunities to accelerate specific projects where appropriate.

How we work on Digital Twin Projects

The SCDT sits at the heart of the change programme and therefore would be developed alongside your supply chain team. Libra Change provides the expertise and capacity to develop the model as an integrated partner, ultimately seeking to transition the model, use and informing of decision making to you and your team.

What’s the benefit?

Typically, the creation and use of a SCDT unlocks the following opportunities:

• 9% Transport saving
• 10% Reduction in Inventory
• 6% Reduction in Operating Cost
• 10% Improvement in service metric

For more information and to unlock opportunities in your supply chain, contact Michael Carson (michael.carson@libraeurope.com).