5 minute read 18 Jun 2020
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How digital twin technology is transforming supply chains

By Sean Harapko

EY Americas Supply Chain Transformation and Global Supply Chain RPA leader

Passionate about friends and family both in and out of work. Husband and father surrounded by girls. Outdoor adventure seeker. Big supporter of the military and military community.

5 minute read 18 Jun 2020

Real-time visibility and digital twin are game changers for serving the customer of the future.

The average lifespan of a Fortune 500 company is now less than 18 years, a testament to the profound social, economic and technological disruptions reshaping the world. Adding to this, COVID-19 has changed our daily lives in ways that were unimaginable a few months ago. Supply chains are facing an unprecedented level of uncertainty related to future customer buying preferences and behaviors. On the other hand, cybersecurity, supplier disruption, capacity limitations and distribution disruptions are just a few examples of the most recent stresses that need to be managed. 

End-to-end visibility


End-to-end visibility is the number one factor cited in creating a successful supply chain

How will the supply chain change to monitor market and economic indicators to create appropriate contingency plans? How will you simulate a potential shift in customer demands to rebalance the production mix across plants and allocate capacity to the most profitable products? How can you predict supplier failures or financial distress to rebalance supply/demand and distribution flows? How will you manage the workforce and implement new ways of working? Some companies are looking to digital twin technology as the answer to these questions.

COVID-19 readiness:


of supply chain executive respondents were prepared effectively to address the COVID-19 pandemic

A digital twin is a complete digital replica of a physical asset (such as an airplane) or real-world process, such as a factory or supply chain. For supply chains, the benefits of having a digital twin are profound. Because it mirrors the supply chain’s assets, transactions, third-party relationships and other operational details, the digital twin enables sophisticated real-time monitoring and adjustments. It brings a broad and deep view of your supply chain, allowing companies to quickly model potential scenarios involving shifts in manufacturing lines, the availability of assets and people and adjustments to distribution flows or proactive risk monitoring.

The digital twin enables you to run a parallel version of the supply network containing the same supply entities, parameters and financial targets to sense problems and responds to support prescriptive decision-making. This helps management make rapid decisions with a high-degree of confidence in outcomes.

As companies consider how to ramp up operations or even transition mass production to smaller, more customized manufacturing, digital twin can help them make supply chain decisions that will enable competitive agility and align with customer preferences. A prime example is the use of digital twins capable of creating optimized production schedules with high-speed agility to respond to events in real time. Legacy planning systems are simply outmatched by this inherent complexity and the “need for speed” in response.  

Learn more about digital twin technology in supply chain by watching this on-demand EY webcast on real-time visibility.

A supply chain for customers of the future

Customer behavior is changing, and given the COVID-19 pandemic, transparent and real-time information are becoming critical to ensure health and safety. This information will need to go beyond the sourcing of product ingredients, to letting customers know where their product has been, where it is on the shipping route and exactly when it will be delivered. Having end-to-end visibility to identify disruptions across your supply chain is critical to synchronize what is expected against what is actually taking place.

Due to COVID-19, we are also seeing a shift in overall customer sentiment around privacy. Our EY Future Consumer Index shows that 53% of consumers would make their personal data available if it helped to monitor and track an infection cluster. Companies should consider how changes in future behaviors and sentiment will impact their business model and create new opportunities. It may accelerate the demand we see already for greater product traceability through new technologies, such as digital twin.

Consumer index


Consumers would make their personal data available if it helped to monitor and track an infection cluster

A supply chain of one to battle disease

Health and safety are more important than ever. That “supply chain of one” already exists today and is delivering life-changing benefits in the biopharmaceutical sector, where new and individualized therapies are transforming the treatment of certain cancers and other mutation-based diseases. These “N of 1” treatments are proving to be effective and less toxic than long-standing therapies, such as radiation and chemotherapy. With the recent pandemic, patients are more interested than ever to get tested to understand their potential level of immunity related to specific diseases.

Supply chains optimized by digital twin technology are far better equipped to support the requirements of personalized medicine because they can be adjusted on the fly as the clinical situation changes.

These supply chains can also share data accurately and securely between a diverse set of unrelated entities, including regulators. This collaboration is vital for the success of individualized therapies, where informational precision is just as important as manufacturing precision, and regulatory compliance is non-negotiable.

An individualized biopharmaceutical supply chain requires end-to-end visibility and transparency, which is crucial for the timely tracking and delivery of patient samples to the lab and back to the patient. In addition to basic location tracking, the supply chain must be sophisticated enough to monitor critical variables such as transport temperatures and chain-of-custody protocols. And this round trip must happen quickly because individualized therapies take time to produce and are most often used in the advanced stages of a disease where patients are very ill and have no time to lose. Supply chain visibility and transparency with digital twin allow patients and their doctors to track the journey of lifesaving therapies, providing a foundation of confidence, hope and comfort during difficult times.

A supply chain for the future of industrials

Capitally intensive industries with complex and highly engineered manufacturing processes are ideally suited to benefit from both supply chain and factory-level digital twins. In the design and investment phase of costly assets, the digital twin can be used to evaluate design options prior to making capital commitments, which optimizes efficiency and cost and minimizes risk. The same digital twin can be used to operate a plant through detailed scheduling of production, which is capable of handling highly complex and time-dependent processes that change frequently with variability in the availability of equipment and people.

Confident in supply chain systems and capabilities for end-to-end visibility


of respondent are very confident in their systems and capabilities for end-to-end visibility

We commonly see a 5%–10% increase in throughput at factories implementing digital twin scheduling software, with a high increase of scheduling agility. Heavy industrial companies have used forms of simulation software for many years, but we’re now witnessing a powerful convergence of computing power, in memory databases, algorithms and data integration through the Internet of Things, which is enabling large volumes of real-time data to be processed and simulated very quickly for rapid response. 

Building airplanes and automobiles are extraordinarily complex undertakings, and as recent headlines demonstrate, the costs of getting things wrong can make or break a company. At a supply chain level, digital twins allow industrial companies to have intelligence across the breadth of trading partners and into the depth of multiple suppliers. Leading industrials also have supplier control towers, providing end-to-end visibility and predictive risk machine learning, greatly reducing supplier risk through constant monitoring of the depths of the tiers, giving early warning of a supply chain issue. 

What companies can do now

Companies just beginning their exploration of digital twin should take these steps to make the most of this emerging technology.

  • Focus on defining your problem statement, identify your potential use cases and conduct a rapid assessment to get to a cost-benefit definition for each option
  • Deploy proof of concepts to prove the value, gain buy-in and learn about data requirements to continue to drive results and reinvest savings in additional capabilities
  • Create an agile launch strategy to iterate and enable behavioral changes to adopt fact-based decision-making across your organization

As enterprises chart a path to recovery from COVID-19, there can be no doubt that today’s supply chain decisions will determine the future of many organizations. Enabling end-to-end visibility with technologies such as digital twin is extremely critical in sensing and responding to continued disruptions while creating competitive agility to outperform competitors and create new value for customers.

Anne Johnston Weaver, Consulting Senior Manager, Ernst & Young LLP and Matt A. Brown, Consulting Senior Manager, Ernst & Young LLP also contributed to developing this article.


Digital twin technology can help companies create a virtual replica of your supply chain to optimize business decisions and serve customers differently. With hyper-personalization, customer product and pharma companies need to rethink their business model, investment and footprint decisions to serve customers differently, and enable a cost-effective supply chain of one. Digital twin is the new weapon supply chain must have to transform effectively. 

About this article

By Sean Harapko

EY Americas Supply Chain Transformation and Global Supply Chain RPA leader

Passionate about friends and family both in and out of work. Husband and father surrounded by girls. Outdoor adventure seeker. Big supporter of the military and military community.