The digital supply chain twin

By Christian Wendt

What makes it the new superstar of logistics?

Successful logistics experts are looking to the future. They are constantly developing their portfolio of services, adapting it dynamically to customer requirements and keeping a close eye on possible risks. More and more frequently, they are turning to a virtual consultant whose talent is enabling it to position itself as a rising superstar in the field of logistics: the digital twin.

You may have already come across the digital twin concept in industry, since that is where it got its start. The digital twin has been forging a career for itself for years as an intelligent advice-giver in product development, machine and plant operations, and process optimisation.

Its stage is the virtual world but its script is what happens in real life. In other words, a digital twin gives you a 1:1 preplay of how a wind turbine, combined heat and power station, or logistics process will behave in certain conditions, clarifying when there’s a risk of a failure and how you can reduce operating costs by tweaking the settings. It also allows you to simulate conditions and constellations taking all conceivable aspects into account.

Decision-making with a high degree of certainty

The digital twin concept is winning more and more acclaim in the logistics sector. And with good reason: it can help to clarify the cause and effect of events in the supply chain with a level of precision that was previously unknown.

A digital twin provides a detailed virtual copy of the real logistics network and the processes used there. It connects the operational level with the strategic decision level. This means that each turn of a screw in the operational system can be “performed” ahead of time and its effect on the overall process can be evaluated on the basis of real data. A digital twin is therefore the ideal simulation and consulting tool. Its users are able to make tactical and strategic decisions with a high degree of certainty.

“What if…” scenarios can be preplayed to predict all their consequences. For example, what effect would a site relocation have on existing procurement and distribution processes? What consequences would extending the product assortment have on delivery frequency? How can the existing resources in a company be used in the best possible way? With a digital twin, these situations can be depicted, planned, controlled and optimised on the basis of real job and order data along with actual routing rules, all with no operational risk. A digital twin therefore adds reliability to decision-making processes for logistics concepts and cost calculations based on real data.

So it is not surprising that international consulting firms such as Gartner count the digital twin concept among their ten top technology trends. The maturity level of the solution is now so high that it offers a clear competitive advantage for supply chain companies thanks to its usage possibilities. Ongoing process monitoring using a digital twin also allows you to work on the basis of optimum operating parameters and therefore ensures efficient processes at low operating costs, which is key given the fact that supply chain costs are constantly on the rise.

Transparency across the entire supply chain process

If you are considering involving a digital twin in your company, however, you should bear in mind certain influencing factors that are key to ensuring you use your digital consultant in the best way possible. To successfully develop a digital twin approach, a combination of project experience, logistical know-how, and extensive knowledge of data, tools and digital twin technology are vital. Just an advisor (without a tool) or just a tool (without experienced configuration support) is often insufficient, since then the set of goals and interests is not sufficient to create a cross-silo digital twin concept.. In practice, we therefore generally use a mixed team of consultants and software experts. This team helps the solution to progress from strategic planning to tactical planning and then to the actual operation of the simulated solution, creating a high level of transparency across the entire supply chain process.

A digital twin pays off in many ways for logistics experts. For example, increased transparency avoids slack operational processes and ensures that capacities are utilised evenly. In our overall experience, even in logistics systems that have already been optimised, a digital twin solution can yield additional savings to the value of five to eight per cent. This is sure to make the digital twin even more popular in the future.

Learn more in our whitepaper on this topic

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This article first appeared on the Siemens Digital Industries Software blog at