Is your supply chain a growth driver for your business? If not, it is time to take a closer look at supply chain design. A well-designed supply chain can transform your business by increasing efficiency, reducing costs, improving customer satisfaction, and providing a competitive edge. In this blog post, we will explore 7 ways supply chain design can transform your business and turn challenges into opportunities.

What is supply chain design?

Supply chain design is the process of creating an optimal strategy for moving goods from suppliers to end customers. It involves building an optimal network of organizations, people, activities, information, and resources involved in the production, handling, and transportation of goods. It includes a range of tactical as well as strategic decisions. 

Some examples are defining the optimal warehouse footprint or where to invest in production capacity based on a point-of-gravity or greenfield analysis. Other decisions involve optimizing sourcing based on total landed cost, analyzing the transportation system, or managing resources throughout the supply chain. Additional examples are balancing supply and demand based on lowest cost or highest profit or conducting a cost-to-serve analysis to gain insight into the actual cost of reaching each customer.

Now that we have sorted out what supply chain design is, let us explore 7 ways supply chain design can transform your business.

1. Become proactive rather than reactive

One common misconception about implementing supply chain design is that it is a large and complicated task that only needs to be done occasionally. This cannot be any further from the truth. Yet, many companies engage in supply chain design reactively, after a crisis, or repetitively but too rarely.

By using a structured supply chain data model, companies can empower their supply chain design process and become proactive rather than reactive. By testing different strategies in a sandbox environment, companies can improve their supply chain design and be better prepared when crises occur – or avoid them altogether.

2. Effectively balance supply chain key factors

While supply chains are becoming increasingly complex and data volumes continue to rise, businesses are facing greater challenges in achieving the optimal balance between cost, service, risk, and sustainability. Making the best decisions in this context requires a delicate equilibrium between all these dimensions.

Fortunately, advanced algorithms offer a way for companies to continually review and adapt their strategies, ensuring they are making the most informed decisions that effectively balance these key factors. By leveraging the power of data-driven insights, businesses can fine-tune their operations to reduce cost, deliver exceptional service, minimize risk, and promote sustainability.

3. Respond more effectively to changes

The current macroeconomic situation has created a pressing need for businesses to reduce the time it takes to answer critical business questions. Supply chain leaders are exposed to more questions in shorter time spans than ever before.

A robust supply chain design process that incorporates an end-to-end data model and purpose-built applications empowers leaders to take control of their data and develop strategies to respond more effectively to changes. By adopting new technologies and a continuous supply chain design process, companies can respond more effectively to changes and turn their supply chain challenges into competitive advantages.

4. Make fact-based supply chain decisions 

Given the complexity of supply chain and the increasing demand for fast decisions, it can sometimes be challenging for companies to find the time to get the facts on the table and conduct a thorough analysis. Many companies still rely on spreadsheets, which often lead to hasty shortcuts and inaccuracies.

To stay ahead of the competition, leading companies are turning to modern technologies to fundamentally rethink and transform their supply chain processes. By using advanced tools and techniques, they are able to gain a deeper understanding of the complexities of their supply chain networks and leverage continuous scenario planning.

Companies that successfully incorporate network optimization applications into their decision-making processes gain insights that were previously impossible to obtain solely through experience. Furthermore, these tools provide an objective view of the data, which can challenge long-held assumptions and lead to more accurate decision-making.

5. Increase long-term supply chain resiliency

In supply chain design, the traditional trade-offs have been focused on cost, service, and risk. In recent years, also sustainability has been taken into account while ESG (Environmental, Social, and Governance) has become increasingly important. However, the prevailing approach has still prioritized cost, giving it a higher weight in decision-making. This has led to trade-offs that prioritize short-term cost savings over long-term resilience. But fact remains that a resilient supply chain is critical not only during times of crisis but also in everyday business operations.

To address this challenge, it is essential for companies to balance resilient thinking with the need for faster decision-making. This requires having alternative options already in place and maintaining them over time, so that reactive decision-making can be avoided in favor of strategic analysis. By adopting a long-term perspective, companies can ensure that cost-efficient decisions are also resilient and sustainable over time.

6. Allow for multiple users of supply chain technology

Historically, advanced technology in supply chain design has only been accessible to a select few. This has resulted in bottlenecks and prevented companies from realizing the full potential of running multiple scenarios in a short time span. But with today’s technology, it is possible to create personalized user experiences and bespoke applications that cater to the needs of a much larger pool of users. This allows for tailored solutions where more stakeholders can conduct the scenario analysis.

7. Improve collaboration through increased visibility

The supply chain design process plays a crucial role in increasing supply chain visibility. It not only offers a holistic view of the end-to-end supply chain. It also includes potential future supply chains generated by what-if scenarios. This enables companies to establish a common analytic platform and view of data, rather than creating silos with multiple versions of the same information.

By adopting this approach, all analytical tasks within the supply chain can be based on the same data and assumptions. These can be governed and maintained in a cross-functional arena, promoting collaboration and enhancing efficiency.

Are you ready to take your supply chain to the next level?

I hope this article  gave you some useful knowledge and insights into how supply chain design can transform your business and turn challenges into opportunities. At Optilon, we know that navigating the complexities of supply chain design can be challenging. But the rewards are truly game-changing. By implementing sustainable supply chain design strategies, you increase your chances of beating the competition.

Are you ready to take the leap and revolutionize the way you do business? Our team of experts is here to guide you every step of the way. Don’t let your competitors get ahead – contact us today and let us embark on this exciting journey together.

Yes, I am ready to beat the competition. Let us book a meeting today!

Want to stay in the loop with the latest in supply chain optimization? Join us on LinkedIn!

Welcome to a Recap of The Optilon Supply Chain conference 2022, held on September 8, 2021.

Disruptions come in many forms, and in recent years Supply Chains have faced numerous highly disruptive risk events. Supply Chains are also influenced by sustainability, customer demand precision, and customization in delivery.

A proactive response requires visibility, adaptability, and agility. For many companies, this means re-imagining the Supply Chain and balancing the tradeoffs in new and effective ways.

This year’s topics

  • SUSTAINABILITY

  • DATA-DRIVEN

  • DISRUPTION

  • TALENT DEVELOPMENT

  • COLLABORATION

About the event

This premium event is dedicated to helping optimize the business through the Supply Chain. Our emphasis is on enhancing experiences and embracing disruption and innovation to re-imagine the Supply Chain and build competitive advantages.

Join leading thinkers and practitioners at the Optilon Supply Chain conference to explore best practices, opportunities, and challenges of optimizing the business through the Supply Chain.

Why watch the recording?

You will get an insight into:

  • How do Nordic companies perform compared to others in terms of sustainability?
  • How mature are my organization’s current capabilities?
  • What could I gain by better collaborating with my network?
  • How is customer behavior changing, and how do my relationships with customers need to change due to disruption?

Key-Take-Aways

While trying to re-imagine the future Supply Chain – at this conference, Optilon would like to support your journey with inspiration on:

  • Why is there a need to disrupt our current way of living, working, and being
  • How you can harness the power of data and create competitive advantages
  • How can you empower and engage your employees in the sustainable agenda and ensure progress
  • Why collaborating with the broader ecosystem is key to responding to the broader ecosystem

This year’s conference was again carried out in a dynamic environment with inspirational speakers worldwide. Come and join us. It is free and online!

Who should watch it?

  • Supply Chain Managers
  • COOs
  • Production Managers
  • S&OP Managers
  • Planning Managers
  • Planning Professionals
  • Supply Chain Data Analysts
  • IT Managers
  • Sustainability Managers and Professionals
  • CEOs and CFOs
  • Head of Digital Transformation8
Watch all of the recordings here

The Optilon Supply Chain Sustainability Minifestival took place from February 21st to February 25th 2022. Watch or rewatch all the exciting sessions whenever you like.

Delivering on Circularity

Monday we had a great start with a very dynamic and knowledgeable speaker, Gitte Haar, from Center for Circular Economy who introduced us to the Circular Economy and the legislation which the EU is imposing as well. We looked at what impact it could possibly have on businesses.

After that, we had a very dynamic panel debate between Marcel Jacobs, Philip Morris, Gitte Haar, and Havard Jørgensen from Electrolux. You can watch the recording here. 

Supply Chain Design and Sustainability – Accelerating the Net Zero emissions journey

We had the pleasure of having Anders Remnebäck and Andreas Andersson on stage from Optilon. They are both very experienced when it comes to adding the Sustainability angle to Network Optimization/Supply Chain Design. They have in this webinar focus on how you can accelerate the journey to NetZero emissions. You can watch the recording here.

Supply Chain Sustainability Software Pitch-Contest

During this session we had invited 6 different start-ups from across Europe to do a pitch. All of them showcased how their company specifically is trying tol solve the Sustainability challenges with their software. The company Prewave won. You can watch the recording here.

Supply Chain Planning and Optimization from a Sustainability Perspective

During this session Optilon’s experts within Supply Chain Planning, John Wikstrom and Nathalie Johansson, introduced us to how you can use Supply Chain planning to reduce your carbon emissions. As Optilon has discovered in previous reports, 1/5 of what is in stock is unnecessary. You can watch the recording here.

The Regenerative Supply Chain

The terminology Regenerative Supply Chain is not yet widely recognized in the Supply Chain field. In this session we looked a little bit deeper into the terminology in order to try and understand what impact it could possibly have. Assistant professor at Århus University Henning De Haas gave an introduction to his understanding of the Regenerative Supply Chain. He put emphasis on the fact, that mental models play a vital role. After that, August Krogh From Slowforest Coffee introduced us the company he works for. They have already laid out the plans for their Regenerative Supply Chain. You can watch the recording here.

Learn more about Options sustainability offerings here

Your Supply Chain design checklist can be downloaded from the bottom of this page. Before you head down to that section, perhaps make a recap of the benefit’s of using advanced Supply Chain technologies for Supply Chain design first.

  • Make more automated decisions
    While most global Supply Chain-reliant companies have already embraced the power of data and advanced analytics across their company, the vast majority have been working with out-of-the-box tools cobbled together with in-house applications or spreadsheet-based solutions. Advanced technology can help the Supply Chain use mathematical solvers and algorithms to find the best decision or decisions for a given business problem within a defined set of constraints.
  • Quicker deployment to users in the organization
    Advanced technology offers the possibility of creating a personalized experience. With apps, you will be able to create a tailored solution with the appropriate user experience for anyone in the organization to facilitate democratized, AI-powered decision-making.
  • Gain proactive insights
    Leading companies can apply advanced technologies to fundamentally rethink and transform their Supply Chain, enhance their real-time understanding of activity in complex supply networks, and leverage continuous scenario planning to optimize the balance of cost against risk and agility of their network footprint.
  • Continually revisit the Supply Chain design
    In other words, by adopting new technologies and the practice of continuous design, companies can reduce risk, improve resilience, and turn their Supply Chain challenges into a competitive advantage. By applying advanced algorithms, companies can continually revisit and adapt to make the best decisions balancing profitability, service, risk, and sustainability.
  • Make faster decisions
    With an end-to-end extensible data model, AI, and rich algorithms, Supply Chain leaders can use simulations to quickly learn how to best respond to changing conditions. They can adjust scenarios and options in these models to identify which decisions best support agility and resilience. The best decisions require the right balance of profitability, service, risk, and sustainability.
  • Drive insights through relevant data
    Designing a Supply Chain that is both resilient and efficient while addressing increasingly complex and nuanced markets is challenging. Supply Chain will have to consider multiple dimensions: Proximity to custoer markets, diverse customer service requirements (including after sales service and reverse logistics), sources of rawmaterials, proximity to key suppliers and ecosystem partners, risks, regulations, customs, duties and sustainability factors.

Your Supply Chain design checklist can guide you to get off to a good start with your own approach to Supply Chain design?
The starting point for your Supply Chain design journey will always be your own Supply Chain challenges. Use the
following frameworks to become sharper on why it could be useful for you and your company to utilize advanced technologies within Supply Chain design. What kind of questions would be good to ask to become more specific on the use cases?

Checkout this chekclist which you can download right here:

Download the checklist now

If you want to build a sustainable business capable of delivering the right goods and services at the right cost, you need to build the right network as the foundation. We suggest you use advanced technologies within Supply Chain design. In this brochure we have gathered some of our resources which can provide you with a deeper understanding of the Supply Chain design field. Also we have gathered some of the benefits of using advanced technologies within Supply Chain design.

1. Getting the journey started, understanding Supply Chain design

Why should you make optimizing the Supply Chain network a strategic priority?
Find all the arguments in this blog post. 

What are the benefits of utilizing advanced technologies within Supply Chain design?
From our experience, when Supply Chains are designed to adapt and evolve, companies are prepared to make tradeoffs, optimize policies, develop scenarios, and accelerate the time between making and executing decisions. We typically see a reduction in time to develop and deploy optimized solutions by up to 80%. Leaders are empowered to make the best decisions based on valuable Supply Chain intelligence. At the end of the day, it benefits the bottom line and gives the flexibility to manage constant change and risk. Learn more in this blogpost.

Transform with a resilient Supply Chain design (whitepaper)
Would you like to understand more about Supply Chain design – then we urge you to download our whitepaper on Supply Chain design right here. 

Check out all the other arguments in this blog post.

2. Understanding the details

What is a Supply Chain digital twin?
Checkout this blogpost on why a digital twin can help you create a competitive advantage.

What are the ingredients to a successful Supply Chain design environment?
In Optilon we have worked with Supply Chain design for more than 15 years. Learn more about what we think are the ingredients to a succesful Supply Chain design environment right here.

Checklist for your approach
The starting point for your Supply Chain design journey will always be your own Supply Chain challenges. Use the following frameworks to become sharper on why it could be useful for you and your company to utilize advanced technologies within Supply Chain design. You can download them right here.

3. Finding the right partner

We are here to help you choose the right journey
Our engagement model shows you how we work together with our clients. We want to ensure that you get a humble, engaged and committed solution delivery that solves yoiur business challenges. Learn more about how we work right here. 

Would you like a product demonstration? Please feel free to reach out to us.

You can always find more resources in the Supply Chain design hub.

Continue reading

 Every Supply Chain leader seeks an optimally designed network to reduce costs while improving resiliency, efficiency, customer service levels, and competitive advantage. Furthermore, business and Supply Chain leaders understand that changes in demand, service expectations, market costs, and reverse logistics can affect the effectiveness of Supply Chain networks. Hence, it could be a business advantage to periodically re-evaluate the Supply Chain design or determine whether a restructure is needed. However, this can be pretty costly and time-consuming when done manually. That is why companies are looking to use Supply Chain design technology. Here a successful Supply Chain design environment plays a key role.

This blog post will look at what a successful Supply Chain design environment is all about. Before that. let’s recap what the business benefit’s of implementing Supply Chain design technology is: 

Business benefits of Supply Chain design technology
There is clear evidence that companies that implement digital technologies fueled with new data sources to test, learn, and adapt rapidly, can outpace their competitors. It is not just about dealing with the challenges and issues of the day; it is about using a culture of technology and digital tools that enable you to be ready for the challenges that are yet to come.

With Supply Chain design technology, you can:

  • Make more automated decisions
  • Quicker deployment to users in the organization
  • Gain proactive insights
  • Continually revisit the Supply Chain design
  • Make faster decisions
  • Drive insights through relevant data

If you choose to implement a Supply Chain design technology, you will typically be able to realize the following business benefits:

Successful ingredients to a thriving Supply Chain design environment

In Optilon, we worked with Supply Chain design for more than 15 years. From our experience, the most innovative companies are combining the following ”ingredients” to form their approach to Supply Chain design:

  • They identify challenges and business opportunities in their existing Supply Chain
  • They ensure that the technology, powered by AI and machine learning, fits the maturity of the company
  • They create a dynamic data model with internal and external data sources
  • They tailor the solution with a personalized experience for anyone in the organization
  • They ensure C-suite commitment and engagement as well as a growth mindset
  • They build governance processes and structures that support an ongoing refinement of the optimal Supply Chain design
  • They continuously invest in building skills and competences

If you are looking for a partner to take your Supply Chain design to new heights, we urge you to contact us. We would love to have an informal discussion about the business benefits you are looking to achieve and how we can help you achieve them.

In the meantime, feel free to download the below checklist. It can help you determine what your future Supply Chain design model should cover and what business benefits it can provide you.

Download checklist

You can reduce the time to develop and deploy new Supply Chain design with up to 80% if you use Supply Chain design technology as an enabler. In this blogpost you can learn more about how. 

Persistent challenges from increasing customer demands, disruptive competitors, and economic fluctuations make the optimization of Supply Chain designs harder. Various megatrends mean, that Supply Chain complexity and risk are growing. Decision making speed and quality need to increase to enable faster recovery from disruptions. At the same time, there is a need to handle real-time data and complex business requirements across multiple networks. At the same time it is necessary to balance risks and trade-offs. Learn more about how you can turn your Supply Chain design into a competitive advantage with technology in this blogpost.

The greatest risks lie in the Supply Chain
Supply Chains are increasingly at risk of disruption. It can be argued that the greatest risk to business continuity lies in the wider Supply Chain of key suppliers and customers (supply/demand networks) rather than within the company itself. As Supply Chain networks increase in complexity because of outsourcing, globalization, and trading environment volatility, so too has the risk of disruption. The vulnerability of networks has increased because of longer, leaner supply lines within the networks.

While many risks to the Supply Chain come from the external environment, such as war, pandemics, and earthquakes, there is growing evidence that the Supply Chain structure is itself the source of significant risk. The same events that once might have caused minor local disruptions may now affect entire businesses, industries, or economies. At the same time, we know that 80% of the costs come from the design of the Supply Chain.

The ideals of a fully integrated, efficient, and effective Supply Chain
The challenge of the Supply or Operations manager is to achieve the ideals of fully integrated, efficient, and effective Supply Chains capable of creating and sustaining competitive advantages. They must balance downward cost pressures and the need for efficiency with effective ways to manage the demands of market-driven service requirements. At the same time, they need to ensure a resilient and transparent Supply Chain.

By democratizing the processes and thereby reducing functional and data silos, creating an environment for constant learning, using a Supply Chain digital twin to visualize the current Supply Chain and advanced algorithms to model the future, there is an opportunity for ambitious companies to move from episodic one-off design reviews to a state of continuous design. To many, that means transforming from a manual approach to a digital one. 

Time to develop and deploy can be reduced by up to 80%
From our experience, when Supply Chains are designed to adapt and evolve, companies are prepared to make tradeoffs, optimize policies, develop scenarios, and accelerate the time between making and executing decisions. We typically see a reduction in time to develop and deploy optimized solutions by up to 80%. Leaders are empowered to make the best decisions based on valuable Supply Chain intelligence. At the end of the day, it benefits the bottom line and gives the flexibility to manage constant change and risk.

 

Checkout the below graphic which simplifies the time it takes to develop and deploy a model: 

Download whitepaper to learn more about supply chain design

Companies have been using Supply Chain network optimization solutions to solve complex operational challenges and improve their Supply Chains for years. While a select few have successfully leveraged the potential benefits of these analytics tools, many have only scratched the surface. Despite widespread recognition of the importance of Supply Chain network optimization, many companies don’t have a clear strategy. In this blogpost we will look into why Supply Chain optimization also should be a strategic priority for your company.

The definition of Supply Chain optimization
Supply Chain optimization is defined as “the deliberate application of advanced analytical processes and solutions to optimize supply chain performance and manage costs,” not as a general concept or management goal. Advanced analytics helps business managers look beyond what happened in the past, and develop predictive and prescriptive models of what could happen, given a certain set of parameters.

Optimization solutions can be applied to daily challenges, like adjusting inventory levels based on lead time and service level targets. They can be used for more cyclical challenges, like modeling optimum inventory locations or managing new product introductions. And finally, they can be applied to larger strategic decisions such as distribution network changes, where to locate new facilities and acquisitions. Some companies also now use it to decarbonize their Supply Chain.

Getting off to a good start
Supply Chain network optimization projects or modelling often start with and depend upon the gathering of relevant and timely data to model the potential impact of changes and allow managers to make better decisions. They sometimes start with developing a model that addresses the targeted business challenge, and then move to data collection, speeding up the data gathering and filtering phase of such projects. With either approach, data quality is essential.

Today’s advanced analytics and optimization tools have become easier to deploy because of expanded data availability, more user-friendly interfaces, faster hardware and cloud-based solutions, which replace high up-front investments with more periodic expenses. Solution capabilities have likewise expanded.

Supply Chain network optimization an important technology trend
Leadership in any area of business is a function of management focus and investment. The Supply Chain is no different. While the bar is continually being raised, current Supply Chain performance at any company (both in terms of customer service and cost) is in large part of a strategic choice. For example, for business reasons management may accept higher supply chain costs in exchange for superior customer service; or they may accept lower service levels in exchange for lower costs. The underlying assumption is “you get what you pay for.” In contrast, Supply Chain leaders reject these standard tradeoffs by pushing for both superior service and lower costs. Such a strategy is reflected by management attention and capital investments, including the adoption of supply chain optimization solutions.

A significant majority of manufacturers agree, in a report made by IndustryWeek, that Supply Chain optimization is an important technology trend. It is critical to the future success of their companies. Despite that recognition, less than half (44%) believe their company has a clear and effective supply chain optimization strategy. For any investment that reduces costs and improves performance, early adoption can provide a market advantage.

Does your company have a clear strategy for Supply Chain network optimization?

This article was written with the inspiration from a research done by our partner FICO and Industryweek.
(2016 IndustryWeek Supply Chain Optimization Research Study, underwritten by FICO)

Download Supply Chain design checklist

Every Supply Chain leader seeks an optimally designed network to reduce costs while improving its resiliency, efficiency, customer service levels, and competitive advantage. Furthermore, business and Supply Chain leaders understand that changes in demand, service expectations, market costs, and reverse logistics can affect the effectiveness of Supply Chain networks. Learn more about how Supply Chain design technology can benefit the company.

It could potentially be a business advantage to periodically re-evaluate the Supply Chain design or determine whether a restructure is needed. However, this can be quite costly and time-consuming when done manually. Most companies are still in the early stages of their efforts to connect the entire Supply Chain with a seamless flow of data. Digital technologies can deliver major benefits to efficiency and transparency that are yet to be fully realized.

Companies now have access to new digital solutions for running scenarios, assessing trade-offs, improving transparency, accelerating responses, and even changing the cost structures. Let’s have a look at the benefits of using technology for Supply Chain design, besides an empowerment of your employees.

The benefits of using technology for Supply Chain design

  • Make more automated decisions
    While most global Supply Chain-reliant companies have already embraced the power of data and advanced analytics across their company, the vast majority have been working with out-of-the-box tools cobbled together with in-house applications or spreadsheet-based solutions. Advanced technology can help the Supply Chain use mathematical solvers and algorithms to find the best decision or decisions for a given business problem within a defined set of constraints.
  • Quicker deployment to users in the organization
    Advanced technology offers the possibility of creating a personalized experience. With apps, you will be able to create a tailored solution with the appropriate user experience for anyone in the organization to facilitate democratized, AI-powered decision-making.
  • Gain proactive insights
    Leading companies can apply advanced technologies to fundamentally rethink and transform their Supply Chain, enhance their real-time understanding of activity in complex supply networks, and leverage continuous scenario planning to optimize the balance of cost against risk and agility of their network footprint.

  • Continually revisit the Supply Chain design
    In other words, by adopting new technologies and the practice of continuous design, companies can reduce risk, improve resilience, and turn their Supply Chain challenges into a competitive advantage. By applying advanced algorithms, companies can continually revisit and adapt to make the best decisions balancing profitability, service, risk, and sustainability.

  • Make faster decisions
    With an end-to-end extensible data model, AI, and rich algorithms, Supply Chain leaders can use simulations to quickly learn how to best respond to changing conditions. They can adjust scenarios and options in these models to identify which decisions best support agility and resilience. The best decisions require the right balance of profitability, service, risk, and sustainability.

  • Drive insights through relevant data
    Designing a Supply Chain that is both resilient and efficient while addressing increasingly complex and nuanced markets is challenging. Supply Chains will have to consider multiple dimensions: proximity to customer markets, diverse customer service requirements (including after-sales service and reverse logistics), sources of raw materials, proximity to key suppliers and ecosystem partners, risks, regulations, customs, duties, and sustainability factors.

In the following, we give an example of how data can be utilized in the model to drive insights through relevant data:

 

Checkout this webinar and learn how H&M works with supply chain design
Download whitepaper to learn more about Supply Chain design

Optimizing Supply Chain strategies and network designs keeps getting harder. This is where the Supply Chain digital twin comes in handy. The luxury of time has disappeared. Supply Chains must be capable of turning on a dime to match changing customer preferences and needs, disruptive competitors and economic fluctuations. In other words: Supply Chain professionals are forced to manage complex multi-network operations in a state of constant flux. In this blogpost we will describe what a digital twin is and how you can benefit from having one.

Ad-hoc tools are typically not sufficient
While most global Supply Chain reliant companies have already embraced the power of data and advanced analytics across their organizations, the vast majority have been working with out-of the box tools, cobbled together in-house applications or spreadsheetbased solutions. These approaches are often inadequate for Supply Chain managers who need to handle real-time data and complex business requirements across multiple networks or systems – all while balancing risks and trade-offs. 

What if you could instead empower your team of analysts with a fully living and breathing digital representation of your Supply Chain. A so-called digital twin, which can easily be understood and utilized for any number of functional and technological advances.

A Supply Chain digital twin – a virtual representation
Gartner refers to the Supply Chain digital twin as:” A digital, dynamic, real-time and time-phased representation of the various associations between the data objects that ultimately make up how the physical Supply Chain operates.” 

A Supply Chain digital twin is a virtual representation of real-world operations. Investments made in creating and building digital twins will pay off again and again. The live data being captured can be used in everything from quality control to inventory management. Supply Chain digital twins are also valuable because they can be analyzed and explored by various stakeholders using different types of tools. They can be used by engineering, production, and maintenance teams to experiment with new approaches and what-if-scenarios without disrupting actual production.

The data captured by Supply Chain digital twins is available to feed Machine Learning predictive models. In general, the larger and more varied the dataset being analyzed, the greater the likelihood machine learners will discover previously unknown operational patterns and aberrations. However, for machine learners to be effective, they need to be analyzing relevant data. Modern streaming architectures can dynamically filter incoming data to focus on the right data points and levels of granularity. Data from Supply Chain digital twins can also be automatically input into decision models, which capture the range of operational choices that could be made at key control and intersection points within the business. Optimizations can then be run to mathematically identify the best sets of choices – among thousands of possible decision combinations for achieving specific goals within specific operating constraints.

Easily create and test scenarios
Given that Supply Chains need to be redesigned to treat disruptions as the norm and Supply Chain Resilience, we believe that the use of Supply Chain digital twins will increase. Supply Chains can use them to create business process simulations that can be updated in real-time as circumstances change. For example, this could include finding the best way to shift production to alternate locations, move inventory to different warehouses, increase or decrease safety stocks and be better prepared overall.

Summing up, we could say that a Supply Chain digital twin allows companies to recreate their Supply Chain in the virtual world and quickly test scenarios in a risk-free manner to learn how decisions will impact the network operations. As digital twinning becomes increasingly commonplace, optimization will be widely adopted as one of the biggest prerequisites. Data availability and readiness will already be taken care of. In addition, better tools for digital twin visualization will help teams explore and understand the key drivers and trade-offs in optimized plans and decisions.

Looking for more resources on the Supply Chain digital twin?

Checkout this whitepaper – free to download.

Optilon’s Fredrik Jersby did in this webinar give a detailed description of a digital twin. Check it out here.

Our client SKF has worked with and won a gartner award for their work on the digital twin. Check out the webinar here.
You can also read about their results right here.

We had the pleasure of having Joachim Lindquist from Arla Foods join one of our webinars on Supply Chain resilience and digital twin.
Check it out here. 

 

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Join us at the Optilon Supply Chain Conference 2023!

Learn from experts and supply chain leaders, and discover innovative solutions to help you stay ahead of the game. This event is free but there are limited tickets available.

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