5 minute read 22 Oct 2021
Workers working in supply chain factory

How digital twins can help Irish businesses untangle supply chain knots

Authors
Paul Pierotti

EY Ireland Partner, Data Analytics

Transforming customer engagement and operational processes through embedding insight. Passionate about family, football, music and comics.

Helene Dingreville

EY Ireland Head of Decision Sciences and Operational Research

Helene has more than 20 years of professional services experience of advising and supporting clients on a range of data science projects.

5 minute read 22 Oct 2021

As organisations embark on road to recovery from COVID-19, supply chain and factory level digital twins can minimise risks and reduce costs.

In brief
  • Technologies such as digital twins are critical to anticipating and responding to continued disruptions.
  • Digital twins help in sophisticated real-time monitoring of supply chains and enable Irish businesses to make swift adjustments to changing circumstances.
  • At a supply chain level, digital twins provide end-to-end visibility of suppliers and trading partners.

Irish organisations are contending with unprecedented supply chain stresses as a result of a range of factors including Brexit and the COVID-19 pandemic. Their difficulties are compounded by rapidly changing consumer preferences along with cybersecurity challenges, supplier disruption, capacity limitations and distribution interruptions. As a result, the ability for supply chains to respond in real time is now a key capability for organisations across sectors.

However, it has become increasingly apparent that traditional supply chain planning systems, conceived in simpler, less volatile times, are underperforming in the current environment. This is forcing businesses to seek better solutions.

One such solution is the digital twin technology, which is now being adopted by organisations across the globe. A digital twin creates a virtual replica of a supply chain and provides a testing ground for monitoring, simulating, and optimising operational performance.

Keeping it real time

The benefits of having a digital twin are profound. As it mirrors the supply chain’s assets, transactions, third-party relationships and other operational details, the digital twin enables sophisticated real-time monitoring and swift adjustments in response to changing circumstances. It allows companies to quickly model potential scenarios and prepare for different eventualities.

A digital twin enables companies to run a parallel version of their supply networks which contains the same supply entities, parameters, and financial targets to detect problems and help management make rapid decisions that enable competitive agility and align with customer preferences with a high degree of confidence.

A prime example is the use of digital twins to create optimised production schedules which can respond to changing demand in real time.

Digital twins can also be used to satisfy customer demand for greater transparency. They can deliver information which goes 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.

This end-to-end visibility identifies disruptions across the supply chain and gives full visibility of what is expected against what is actually taking place.

A boon for manufacturing

In Ireland, industry sectors with complex and highly engineered manufacturing processes are ideally positioned to benefit from both supply chain and factory level digital twins. The digital twin can be used to evaluate design options prior to making capital commitments. This optimises efficiency, reduces cost, and minimises risk. It can also be used to operate a manufacturing facility to make it capable of handling highly complex and time dependent processes that change frequently.

As a result, we frequently see a 5% to 10% increase in throughput at factories implementing digital twin scheduling software. Of course, manufacturing companies have used forms of simulation software for many years, but we are now seeing a convergence of increased computing power, enhanced data handling capability, and new technologies such as the Internet of Things (IoT). Together this is having a transformative impact.

At a supply chain level, digital twins provide intelligence and end-to-end visibility across the full breadth of trading partners and suppliers. This greatly reduces supplier risk as the constant monitoring acts as an early warning system for supply chain issues.

As organisations 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 businesses. Enabling end-to-end visibility with technologies such as digital twin is critical to anticipating and responding to continued disruptions while developing the agility to outperform competitors and create new value for customers.

Digital twin technology can help Irish companies create a virtual replica of their supply chains to optimise business decisions and better serve customers. With hyper-personalisation, consumer product and companies in other sectors such as pharma need to rethink their business models to serve customers differently and enable cost-effective supply chains. Digital twin is the new must have weapon for optimised supply chains.

Summary

Digital twins can create virtual replicas that help organisations make rapid decisions, better align to customer preferences and bring in competitive agility.

About this article

Authors
Paul Pierotti

EY Ireland Partner, Data Analytics

Transforming customer engagement and operational processes through embedding insight. Passionate about family, football, music and comics.

Helene Dingreville

EY Ireland Head of Decision Sciences and Operational Research

Helene has more than 20 years of professional services experience of advising and supporting clients on a range of data science projects.