The trend of Digital Twins encompasses virtual models that accurately mirror the real-time conditions and behaviors of the physical objects or processes they represent. A digital twin provides value through visualization, diagnosis, analysis, prediction, simulation, and/or optimization without the need for someone to interact with its physical twin.
The growing diversification and application of sensor technology and the development of cloud computing and artificial intelligence (AI) over the last few years have enabled the creation of more accurate digital twins for a wide range of objects and systems, from nanomaterials and machines to large production lines and entire cities. This progress has captured the attention of many players across sectors, including those in the logistics industry. As more digital twins are implemented, the market, which was valued at more than 5 billion USD in 2020, is consequently projected to grow beyond 35% CAGR between 2021 and 2027.
Despite the maturity of enabling technologies and the uptick in digital twin implementations in supply chains, we here at DHL see this trend as still having a realization beyond 5 years. As logistics organizations begin adopting the solution, it will take some time before digital twins move from individual applications to whole ecosystems, integrating everything from assets in operations to entire supply chains end to end. The trend of Digital Twins has maintained a moderately low impact in the Logistics Trend Radar, helping logistics organizations address efficiency, resilience, and environmental and visibility needs without significantly changing the overall characteristics of the supply chain.