Meet your digital twin
DPM can also be a key enabler in building a digital twin of your supply chain. A digital twin allows you to spot potential issues before they happen, rendering it a “must-have” for an efficient – and resilient – supply chain.
As described in-depth in an earlier article, How digital twins give manufacturers a real-world advantage, a digital twin is a freestanding model of the supply chain that can be based on processes mapped by DPM. Once this model is in place, the supply chain strategist can experiment with a number of key variables, testing different scenarios and contingencies.
The most effective digital twins should run on the latest data. Decision-makers can run scenario analyses in a real-time context and confidently assess how supply chains would be impacted by one or more contingencies. Based on this assessment, they can proactively mitigate risks before they impact the supply chain, whether those risks stem from everyday occurrences such as stock-outs, more dire situations such as natural disasters or even “black swan” events such as the current COVID-19 pandemic.
No one can deny the present crisis has had far-reaching effects on supply chains the world over. Businesses not only have to contend with how to navigate the present; they need to determine how to return to a new state of normal. It’s unlikely anyone can pick up where they left off before the pandemic began. Manufacturers need to plan for the now, next and beyond. A digital twin can help manufacturers plot a course and steer around potential obstacles. It can also help build a more resilient supply chain to fortify against future disruption.
With a digital twin, simulations can be run by changing different variables to visualize the full impact of any number of scenarios, such as supplier insolvency, production shutdowns, shipment delays due to shipping port congestion or a sudden spike in product demand. This provides decision-makers with an ability to assess the impact of these challenges and help them to identify backup options, including using alternate suppliers, using alternate shipment modes, and increasing inventory levels to avoid disruptions to their supply chains
Clearer insights into your supply chain’s possible pain points will make it easier to minimize vulnerabilities generally or, if you are already in the midst of a disruptive event, to see the different ways in which knock-on effects might manifest themselves before they happen.
Having a digital twin may also help condition supply chain leaders to think more strategically. The surprisingly strong performance in February and March of companies that have practiced supply chain war games and other tabletop exercises suggests that simply making a habit of taking a strategic view can help drive stronger performance during a crisis.
Operations may remain challenging even after we get back to normal — whatever normal turns out to be — but fortunately there are more advanced technologies to help meet the challenges ahead. DPM and digital twin technologies are powerful new toolkits that even the most complex 21st-century businesses can incorporate, both in their daily resource management and long-range strategy.