A digital twin might sound like a cutting-edge European DJ rig. This should be fun. But digital twins (DTs) in the business world are just identical representations (numbers) of systems or physical objects. The concept comes from NASA’s capsule model. These are used to reflect and ultimately diagnose issues on the track. From there, digital analog took off, and by 2017, technology research and consulting firm Gartner predicted that digital twins will only continue to grow based on an estimated 21 billion connected sensors and endpoints by 2020.
These 21 billion connected sensors arrive and continue to grow. Almost every industry on the planet has the ability to create a DT, so it can “try out” what-if scenarios to simulate how different variables will affect their business operations. For supply chains, DT consists of thousands of inventory, warehouse, asset and logistics locations. Analysts can then use systems, products, and services to assess the impact of decisions without incurring tangible, real-world risk.
E.ON is a European power company headquartered in Germany. The company is using a digital twin of its 110kV power transformer to monitor its health and performance. Also known as “DT technology”, energy and utility suppliers are working with a range of players (suppliers and equipment suppliers) along the supply chain to provide digital continuity and try to ensure there are no unexpected failures.
Another interesting benefit of DTs to supply chains is that their presence integrates innovation into the supply chain. Many supply chains are just different systems running along the chain. Humans are tasked with bringing cohesion to the process. Using DT, chains can be deconstructed and optimized into intelligent connected systems. Participants on the chain are free to modify and make modifications until the DT is fully optimized. This is a rare treat in the business world.
One of the barriers to wider DT rollout is human bureaucracy. Believe it or not, governance and lack of management support are two huge barriers. The third is the lack of human capital with the technical skills to create and manage DTs. Many companies have turned to upskilling existing employees in areas such as cybersecurity and blockchain, hybrid cloud systems, data capture and embedded software. Demand is growing and those young graduates with the above skills are well paid for their knowledge and skills.