Digital Twins

Practically all processes within supply chains can benefit from the trend of Digital Twins. From appropriately allocating workloads to efficiently managing inbound and outbound flows, a digital twin can facilitate logistics optimization through visibility.

German drugstore retailer dm-drogerie markt, for instance, recently utilized digital twins to optimize inventory operations, including replenishing products on shelves. The retailer created digital twins of each of its 2,000+ stores, including the shelf layout and all product SKU locations in every branch. By having real-time visibility of product availability across all its locations, dm-drogerie markt has been able to optimally combine goods on incoming mixed pallets from distribution centers to ensure shelves are properly stocked with the fewest pallets needed. Furthermore, as the retailer knows where exactly in each branch every product belongs, it can help to minimize employee in-store walking distances. On a smartphone display, personnel can see the optimal restocking path for each item.

In implementing digital twins for specific supply chain processes, logistics organizations can potentially reduce the cost, time, resources, and waste previously incurred when completing tasks.

Unplanned downtime is disruptive and expensive, costing industrial manufacturers lost time of over 15 hours a week and over 50 billion USD a year, even before the pandemic. With equipment failure cited as the cause of almost half of all downtime, predictive maintenance (anticipating and repairing assets before they break or fail) is seen as a worthy strategy to effectively cut costs and increase productivity for manufacturers and logistics providers alike.

Able to provide real-time visibility of the condition of physical objects, digital twins are often seen as the ideal solution for predictive maintenance. In 2022, Kraft Heinz partnered with Microsoft to create digital twins of all its 34 manufacturing sites in North America, with one of the goals being to reduce mechanical downtime at each facility.

Digital twins can additionally be applied to smaller, individual assets, not just whole warehouses. The most advanced logistics players and equipment service providers are creating digital twins of assets like individual robots, trucks, and tools, tracking their conditions and detecting any wear and tear that should be addressed to avoid breakdowns.

By using digital twins to facilitate predictive maintenance, logistics providers can save about 40% of reactive maintenance in a given year, boosting operational throughput and reducing costs.