Digital Twins for Retailers: 4 Key Benefits in Supply Chain Planning
To scale and improve profitability, retailers have a mountain to climb. Their supply chains have been facing an increasing number of disruptions, leading to higher costs and uncertainty around inventory. They are further burdened by inflation, fluctuations in consumer demand, and the risk of not having the right product in the right place at the right time.
Given these obstacles, retailers have identified supply chain IT infrastructure, agility, collaboration, and customer experience as areas to focus on to optimize their supply chain, according to a recent report by the International Data Corporation (IDC). They’ve also noticed that better planning, allocation, visibility, and accurate inventory forecasting can help in addressing these issues.
However, many of these organizations are still using legacy planning tools and spreadsheets to manage their operations. In fact, many planning teams employ tools that do not offer vital information regarding the impact of a delay and the decisions they need to solve a problem, resulting in negative downstream effects felt by the execution teams.
If you’re looking to improve efficiency, visibility, and decision-making, it’s time to invest in a Digital Twin. Imagine a digital mirror of your real-world operation accurately calculating people and warehouse capacities, journey, and turnaround times. Well, that’s what a Digital Twin brings to the table.
Adopt Digital Technology or Get Left Behind – 4 Key Statistics
- 64% of supply chain executives have stated that digital transformation will accelerate due to the pandemic
- 4 in 5 retailers want to change their approach to supply chain management as a result of COVID-19
- The market size for Digital Twins is projected to rise by about 40% by 2025, indicating widespread interest in its utility in the planning process
- Digital transformation can offer a competitive advantage, especially when only 1 in 10 retailers say they have best-in-class supply chain technology
4 Reasons Why Digital Twins Are The Future
- Enhance collaboration across teams:
- Normally, the planning team looks at the historical data and then feeds that data to the execution team. However, planning and execution teams using the same Digital Twin can look forward to and collaborate on the same rolling horizon. The execution team needs the same decision support as planners to help them make the best possible decisions if they need to make adjustments. Suppose you have an integrated supply chain with no gaps and the addition of automatic propagation, which reflects all changes across the planning horizon. Your execution team then has an up-to-date view and can start to be proactive. Imagine what you could save.
- Model real-world scenarios accurately:
- A Digital Twin models your real world by integrating your unique parameters and constraints, such as:
- Timings: Incorporates scheduling, lead times, transportation times, and delivery windows.
- Capacities: Reflects warehouse storage capacities, fleet sizes, and production capacities.
- Other factors: Include supplier relationships, demand patterns, and inventory costs.
- By encompassing your specific operational requirements, a Digital Twin adapts to changes in your supply chain. It can be tuned by the planners so that as new services or processes are added, the Digital Twin can proactively model the impact in advance.
- A Digital Twin models your real world by integrating your unique parameters and constraints, such as:
- Adapt swiftly to the changing business landscape:
- In a world where “abnormal” is the new normal, are you ready for the changes that affect your current and future operations? You not only need to demonstrate Corporate Responsibility but also show that it’s at the heart of your organization’s planning KPIs. When you set sustainability targets, optimization and the Digital Twin allow you to produce a baseline case of your status, set targets for where you want to be, and quantify them against your other KPIs. This ensures you do not spend unexpected amounts, shoring up gaps in your sustainability plan.
- Incorporate business KPIs into your DNA:
- If you’re using spreadsheets to work out your warehouse, people planning, and fleet and trailer requirements, your estimates are based on guesswork. While this may work some of the time, you need to create the plan using your operation’s real-world constraints and KPIs. This enables you to drill into the details, compare scenarios, use and analyze each KPI, as well as propagate changes across scenarios to perform stress tests and ensure you understand how peak times will work. A Digital Twin is the correct residing place for the local knowledge held in spreadsheets so it can be centrally managed, empowering your teams with the same information and aligned with your corporate rules and goals.
Integrate Your Supply Chain
Having a disconnected supply chain can lead to dire consequences for your business, especially when each function is allowed to continue to operate separately and focus solely on activities that benefit only one aspect of the business. These consequences range from revenue loss to poor performance and customer dissatisfaction.
It’s, therefore, crucial for organizations to identify the gaps in their supply chain to better drive efficiency and resilience. With an integrated supply chain that allows for continuous optimization, coupled with a Digital Twin, you can pinpoint gaps in your current operations. By addressing these, you can ensure customer satisfaction, prevent revenue loss, and grow your business.
Bridge the Gap with The Logic Factory
By adding a Digital Twin to your supply chain planning, you can not only streamline operations but also redefine them. Your supply chain becomes resilient and primed for growth. It can be your strategic ally, equipping you with foresight and agility in an unpredictable business climate.
Let The Logic Factory guide you in embedding this future into your supply chain, ensuring you’re not only prepared for the challenges of today but are also positioned to seize the opportunities of tomorrow.
Discover the transformative power of Digital Twins in supply chain planning for retailers. Dive into the key benefits, crucial statistics, and insights on streamlining operations, enhancing collaboration, and driving profitability in an unpredictable business climate.
