Thought Leadership

Challenges and opportunities in the industry of tomorrow – Part 1 – Supply chain disruptions

By Dale Tutt

The industries of the world are facing a future of both uncertainty and potential. Supply chain disruption, sustainability, and an upheaval in the workforce are three major drivers of this uncertainty and disruption. Each of these challenges is connected, and each offers an opportunity for innovation and transformation.

Today, digitalization offers a path forward for companies by improving the ability of various departments to collaborate and gain valuable information, by enhancing data collection and analysis capabilities, and by enabling companies to manage diverse global supply chains.

Digitalization can connect information from throughout a company, enhancing the ability of various departments to collaborate.

The adoption of a digitalization strategy also can help companies to embrace some of the most exciting technologies available: artificial intelligence and machine learning (AI/ML), additive manufacturing, augmented and virtual reality (AR/VR), the industrial metaverse, and cloud and service-based software.

In a short series of blogs, I will examine each of these disruptions and discuss how companies can use digitalization and advanced technologies to overcome the challenges of the future and to grasp the opportunities that exist. For part one, we will focus on the challenges presented by supply chain disruptions.

Disruptions cause supply chain uncertainty

Supply chain disruptions continue to plague companies, making it difficult to source materials and operate efficient manufacturing and logistics ecosystems. These struggles have underscored the brittleness of many supply chains around the world.

The automotive industry, for example, has been laboring under a persistent shortage of key electrical and electronic components that are crucial to the advanced features and functions that today’s vehicle buyers demand. Though the shortages of these components have eased, the demand for advanced vehicle features is expected to continue to grow and place additional pressure on the supply of these components. In addition, new disruptions to critical supply chains are almost inescapable. The sourcing of raw materials for battery manufacturing, for instance, may become the next great supply problem as automakers bet big on electrification for the future of the industry.

In response, companies are investing in remediating ongoing shortages by reshoring existing production capacity, developing partnerships with new suppliers, or by bringing the production of certain key components in-house.

At the same time, companies are also working to become more agile and resilient to the next major disruption. These strategies include improving a company’s ability to predict supply shortages, economic downturns, and various other factors that may affect their ability to do business.

The digital twin offers supply chain solutions

The difficulties of recent years have illustrated the limitations of how companies currently try to understand and manage their supply chains. Despite the growing complexity and breadth of supply chains around the world, many companies continue to rely on relatively simple means of tracking and managing these processes.

Though we often think of the digital twin in terms of product design and engineering, it can also model supply chains and business processes to help companies gain a better understanding of the complexities of their own value chains, and to see through the complexity to identify problems and prescribe solutions. This method is dependent on the availability of significant amounts of data from across a company’s supply chain, making digitalization necessary to gain such a perspective.

Hosting the digital twin of supply chains and business processes within the industrial metaverse enables companies to harness the power of large-scale computing and in-depth visualizations to analyze and interrogate these digital twins. One of the key deficiencies of today’s most common solutions for supply chain management is an inability to provide context or situational awareness to business leaders at the level of an entire supply chain.

The combination of a comprehensive supply chain digital twin hosted in the industrial metaverse and AR/VR technologies, however, can be used to create intuitive visualizations that are easier to digest than numbers in a chart or points on a table. For business leaders, this can contribute to a higher level of situational awareness on a global scale, again, dependent on the availability of huge amounts of data.

AR, VR, and the industrial metaverse can create intuitive information displays that can help business leaders gain a more complete understanding of complex global supply chains.

Furthermore, the integration of AI/ML into the industrial metaverse platform will further enhance the value that can be extracted from the digital twin models. AI/ML is already excellent at sorting and classifying large data sets to help uncover only the information that is most useful to the user.

When applied to supply chain management, this capability can help quickly sort and organize the massive amounts of data that a modern global supply chain will produce, making it easier to focus on the most important trends and patterns within the gathered data. Such a solution will offer lasting benefits as well, as the more an AI/ML system is used, the better it gets at recognizing patterns and even predicting future supply issues before they occur.

Moreover, digitalization can offer companies a more complete picture of the many suppliers and components that make up their supply chains. This will only become more important as products of all types become more complex. In part two we will dive into the next major trend: sustainability.

Siemens Xcelerator, the comprehensive and integrated portfolio of software and services from Siemens Digital Industries Software, helps companies of all sizes create and leverage a comprehensive digital twin that provides organizations with new insights, opportunities and levels of automation to drive innovation.

For more information on Siemens Digital Industries Software products and services, visit or follow us on LinkedInTwitterFacebook and Instagram. Siemens Digital Industries Software – where today meets tomorrow.

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