Making a digital twin work for your supply chain

Digital twins are getting a lot of attention these days, especially among supply chain leaders. And it’s not surprising. As we discussed in a previous blog post, digital twins can play a big role in helping companies model the potential impacts of disruptions to find and fix vulnerabilities that could harm the business. They also can be a powerful tool for optimizing supply chain networks and processes, as well as inventory.

In this follow-up post, we delve a little more deeply into what makes a digital twin work and highlight specific examples of how our clients have used digital twins to boost their supply chain performance.

An integrated digital twin solution

At the heart of a digital twin are intelligent technologies that enable a company to develop a virtual representation of its physical supply chain. But making a digital twin work needs much more than just technology. It requires a pretty sophisticated ecosystem that provides the full range of capabilities and insights supply chain leaders need to make timely, informed decisions.

For example, at the core of this ecosystem is Accenture’s AI-powered supply chain solution, compatible with any of the leading cloud platforms, which integrates and orchestrates the day-to-day operations of the supply chain. This end-to-end solution integrates next-generation supply chain capabilities such as a cloud base platform connected to internal and external data systems, as well as an integrated data model that enables the analytics and AI engine to harness the full power of the intelligent supply chain. It also includes a consumption layer designed to improve decision making across supply chain operations. And it’s flexible, so it can embed best-of-breed software, such as optimization and simulation engines from Simio or Riverlogic, that capitalizes on the full potential of our AI engine and brings the digital double to life. With this platform, a company can conduct simulations and what-if modeling via a simple, intuitive dashboard that allows users to change whatever supply chain parameters they wish and immediately see the impact—for example, potential disruptions caused or efficiencies gained and the resulting operational and financial impacts.

Generating significant business value

Accenture has worked with a growing number of clients on digital twin initiatives that have dramatically improved supply chain strategies and day-to-day decision making.

One of these, a European postal company, used a digital twin to inform the development of its 10-year business strategy designed to address a number of critical challenges the company faced, including decreasing letter volumes, rising parcel volumes, and an increasingly unfit network of processing sites, delivery offices, and vehicles. With a digital twin of its current situation, the company was able to iteratively test improvements (virtually) to the network until it found an optimal solution. The digital twin also enabled the company to create a new virtual Regional Delivery Office, with all its internal processes, employees, and shipping logic. Doing so gave the company a way to understand the significant cost savings it could get by consolidating delivery offices into the regional facility, and the optimal sequencing of that consolidation, as well as how consolidation would eliminate most of the vehicle constraints in the delivery network to provide a strong foundation for growth.

In a similar application, a capital city’s port authority was looking to boost its ability to predict how an increase in cargo flow would impact the overall system. Working with Accenture, the authority created a digital twin that considers different and related pathways for customs processes, 13 different types of customs inspections, and expected cargo volumes with actual ferry arrival times and freight data. Leveraging this powerful tool, the client was then able to model proposed future processes, conduct stress-testing to assess cargo increases on port performance, and develop what-if scenarios to identify potential process enhancements. As a result, the port authority can now more intelligently develop strategies to eliminate bottlenecks and inefficiencies, reduce costs by optimizing resources, and assess the feasibility of new investments before they’re even made.

A third example is the digital twin Accenture built to help a player in the jet fuel supply chain devise a response to the COVID-19 disruption and resulting plunge in demand (not to mention jet fuel prices, which sank more than 30%). Facing such an unprecedented turn of events in the market and uncertainty around future price direction, the client used the digital twin to simulate the impact of changes in jet fuel demand on supply chain inventory, logistics, profit and loss, the balance sheet, and cash flow—and identify the moves it should make to increase total profit while reducing risk and cost.

Is it time to double down on digital twins?

More and more companies today are seeking to add digital twins to their operations, and it’s easy to see why. A digital replica of your entire supply chain network offers potentially massive benefits and, at the same time, new platforms and ecosystems like Accenture’s make digital twin capabilities easy to access and affordable. Why wouldn’t every company want to have one?