INNOVATIVE | RESPONSIBLE | ENGAGEDDigital Twins in Smart Supply ChainsBUS3SSPMelbourne CampusWhat are we doing today?• Understand the technologies that enable digital twins.• Recognize the benefits and applications of digital twins,specifically in the supply chain and logistics domain.• Follow a framework for the implementation of digital twins• Systematically conceptualize a digital twin framework by mappingsupply chain processes.• Learn how software can help implement digital twins, allowingsupply chain managers to anticipate potential events and takemajor decisions in real-time.Required Readings and Material• This PowerPoint is based on excerpts from the following readings and resources:– Reichental, J. (2020). A digital twin means better results [Streaming video]. Retrievedfrom LinkedIn Learning database.– DHL. (2021). Digital twins in logistics. Retrieved fromhttps://www.dhl.com/content/dam/dhl/global/core/documents/pdf/glo-core-digitaltwins-in-logistics.pdf– anyLogistix. (2021). Supply chain digital twins definition, the problem they solve, anhow to develop them.– Microsoft. (2017). The promise of a digital twin strategy. Retrieved fromhttps://info.microsoft.com/rs/157-GQE-382/images/Microsoft%27s%20Digital%20Twin%20%27HowTo%27%20Whitepaper.pdfIntroduction to Digital Twins• Grieves & Vickers (2017) defined Digital Twin as : “A set of virtual informationconstructs that fully describes a potential or actual physical manufacturedproduct from the micro atomic level to the macro geometrical level. At itsoptimum, any information that could be obtained from inspecting a physicalmanufactured product can be obtained from its Digital Twin”• Digital twins are essentially the extensions of existing simulation and 3Dmodelling technologies already being implemented in various industries today• Digital twins are the virtual replications of physical assets or environmentswhich simulate their behaviour and stateValue of Digital Twins and Their Role in Analytics• Digital twins are best suitable for problems which encompass large volumes of data,possess intricate decision making which can have varying results, provide great value forthe organization even with minute alterations, and are scalable and repeatable invarious locations• Digital twins allow for better integration as they provide a single visualized source ofinformation for all stakeholders in a supply chain network• The value delivered by digital twins can be categorized as follows:• Descriptive Value: Data that is collected from assets in isolated or hazardous locations are more easilyaccessed and interpreted through digital twins.• Analytical Value: If the digital twin has simulation capabilities, it can generate information that wouldnot have been provided by a physical object directly.• Diagnostic Value: When developed with diagnostic capabilities, a digital twin can utilize data torecommend the most likely causes of certain states or behaviors of objects or the environment.• Predictive Value: Digital twins can be used to run what-if scenarios and predict future conditions ofthe physical asset or environment.Technologies Behind Digital Twins• APIs and Open Standards: APIs and open standards now make it possible for users toconsolidate data from different sources and set up reliable models much more easily.• Cloud Computing: Digital twins require significant data storage and computationcapabilities. Cloud computing, when offered as a service by a provider, allowsorganizations to utilize these abilities by employing the platform as and when required.• IoT: One of the most important aspects of digital twins is the ability to access largeamounts of data, which is made possible with IoT. The complex data is collected, whichthe digital twin then structures and analyzes.• AI and Machine Learning: Organizations are now more comfortable working with largeamounts of complex data and drawing insights from it. With advances in machinelearning, frameworks have been developed that enable systems to forecast futureconditions and take decisions without the need of human interference.• AR/VR: Once the data is processed and collected by the digital twin, it must be visualizedfor insights to be drawn from it. This can be done in either a 2D format, where it isdisplayed on a screen, or a 3D format where the render is done in the physicalenvironment.Technologies Behind Digital TwinsFigure 1. Underlying technologies of digital twins. Reprinted from “Digital twins in logistics,” by DHL. Copyright 2021 by DHL.• In manufacturing, IoT has been leveraged by many organizations to achieveautomation in various production processes. It has also led to the generation ofhigh volumes of data, which can be utilized in the development and analysis ofdigital twins in order to optimize ongoing manufacturing operations• By simulating the properties of various materials, analyses that are often toochallenging to perform in the physical world in the material science industry canbe conducted digitally, allowing companies to better understand the propertiesand use-cases of these materials• In the healthcare industry, digital twins can be implemented to allow doctors tobetter understand the human body and its behaviour through detailedmodeling, or to practice intricate procedures digitally before they actually needto be performedApplications of Digital Twins in Industry• Some of the largest digital twins developed are for infrastructure purposes, suchas urban planning and public transportation. Such twins enable the real-timemonitoring and tracking of assets and processes, allowing for their optimizedplanning and execution, while ensuring the occurrence of timely maintenance• In the energy sector, digital twins can monitor these assets remotely to ensurethey perform safely and reliablyApplications of Digital Twins in Industry• IoT, AI, and blockchain are crucial in the development of autonomoussupply chains and digital twins• When utilized in supply chains, digital twins simulate a physical supplychain using real-time data to predict dynamics in the supply chain• The information gained from the digital twin can then be used byanalysts to comprehend supply chain behaviour, anticipate unusualsituations, and develop an appropriate plan to respond to themDigital Twins in Supply Chains• For a model to be considered a supply chain digital twin it must meet certaincharacteristics:– It must possess a high level of detail in order to effectively analyze interactions within thesupply chain, even at the macro level, and allow for improved functions such as better financialand demand forecasting.– It must utilize real-time data to determine the current state of the supply chain and develop upto-date forecasts.– The digital twin must be able to alert the user in the occurrence of an anomaly to thedetermined plan.– The user must be able to set triggers for certain activities which can then occur autonomously iftriggered.– Leveraging the information provided by the digital twin, the user or organization must be ableto develop and test solutions to potential risks before they are implemented.– The supply chain digital twin must be able to integrate with the digital ecosystem developed bythe organization, consisting of a variety of other systems and tools.Digital Twins in Supply ChainsDigital Twins in Supply ChainsFigure 2. Supply chain digital twins. Reprinted from “Supply chain digital twins definition, the problem they solve, an how to developthem,” by anyLogistix. Copyright 2021 by anyLogistix• Supply chain digital twins enable organizations to participate in improved shortand mid term decision-making• Short term decisions pertain to the identification of possible issues the supplychain can face and analyzing the available information to develop appropriatesolutions• Mid term decisions are concerned with higher-level aspects of the supply chain,such as its design, planning, and optimization• In the retail industry, digital twins allow retailers to visualize all their individualsupply chains as one that is linked in one large environment• Digital twins allow retailer to explore other fulfillment strategies as they gaincontinuous real-time visibility of their supply chain.• Digital twins help with supply chain integration, allowing for more cost effectiveand sustainable supply chains.Applications of Supply Chain Digital Twins• One of the characteristics of supply chain digital twins is their ability to integratewith the digital ecosystem created by an organization. This means that digitaltwins play a key role in the organization’s supply chain control tower• A control tower consists of the following modules:– Data Module: This module unites all the data silos in the supply chain. This ensures that thedecisions promoted by the digital twin are applicable and made with the latest information.– Visualization Module: This module helps gain insights from the available data throughanalysis and data presentation.– Current State/History Module: This module allows the user to analyze historical informationto gain an understanding of the current state of the supply chain and ensure that therequired standards in terms of quality and defined in regulatory policies are maintained.– Decision Support/Forecast Module: This module is primarily focused on what-if scenarioanalysis. Potential risks are identified, and the appropriate response strategies aredeveloped.– Task and Case Management Module: This module is concerned with the actual execution ofplans and allows for the activities to be tracked in real-time through their execution.Supply Chain Control TowerSupply Chain Control TowerFigure 3. Supply chain control tower. Reprinted from “Supply chain digital twins definition, the problem they solve, an how to developthem,” by anyLogistix. Copyright 2021 by anyLogistix• To implement digital twins, it is first critical that a digital twin concept centeredon data be developed• A digital twin concept will provide visibility of all levels of the supply chain,including all the facility activities and supply chain processes• The first step in conceptualizing a digital twin is identifying the needs of thebusiness, the outcomes that are desired, and how stakeholders and activitiesare impacted• The digital twin conceptualization should be done with a focus on the value thatcan be gained through it• Once that is established, the relevant technologies can be selected based on theuse case and data output required.Developing and Implementing Digital Twins• In order to develop a digital twin concept that generates value for theorganization and its consumers it is important to implement process mappingwith a systems thinking approach• Systems thinking encourages that processes not be seen as isolated from eachother, but as components in a larger system that depend on and respond toeach other in order to achieve a determined objective• When conceptualizing a digital twin, process mapping helps deconstruct theactivities that occur within a process while systems thinking ensures that all theprocesses that occur in a certain function work together to achieve a specifiedobjectiveStep by Step Digital Twin Conceptualization• To develop a digital twin concept for supply chains, we suggest the following step bystep guide:– STEP 1. Identification of traditional and digital supply chain KPIs (discussed in previous workshop)– STEP 2. Visualizing the supply chain network including the identified KPI-SCs for each node usingsupply chain mapping tools (discussed in previous workshop)– STEP 3. Mapping out all value-adding processes that occur across/within the supply chain (usingtools such as turtle diagram)– STEP 4. Identifying the process level KPIs (KPI-Ps) for all characterized value-adding processes andtabulating them in a single source– STEP 5. Developing a dependency matrix to map KPI-Ps against KPI-SCs (here we try to indirectlymonitor how the identified processes contribute to the supply chain level KPIs)– STEP 6. Framing a comprehensive (transformed) KPI database (by removing duplicate informationand adding detailed information to clearly describe how each KPI functions and is going to bemeasured digitally)– STEP 7. Implementing Digital Twins: (a) Monitoring Smart Devices Remotely; (b) Insight GeneratingPlatform ; and (c) Smarter MachinesStep by Step Digital Twin Conceptualization• Process mapping helps to understand what each process in the supply chainprovides, and what it requires for successful execution• When applied to a supply chain, it is a great way to visualize all the activitiesthat go into providing a product, starting from the procurement of materials allthe way to delivery of the finished product• Process mapping for the entire supply chain should cover three major areas:– How are raw materials or components ordered from suppliers– How are they received by the organization– How does the finished product reach consumersStep 3: Process Mapping• Process mapping is effective in three situations specifically:– Internal Benchmarking: Process mapping enables organizations to establish performancebenchmarks in their supply chain networks and determine why some business processes areexecuted more effectively than others.– Problem Solving: If there are issues in certain processes, it helps to create a map of all theactivities to truly understand how the process is executed.– IT Solution Implementation: In Industry 4.0, this could be considered one of the mostimportant uses of process mapping. When implementing an IT solution, such as a digitaltwin for an organization, mapping out all the existing business processes will help theimplementation team identify which IT solutions would be best suited for the business. Thisinformation also helps them build or configure IT solutions so that they effectively enablethe processes.Step 3: Process Mapping• The Turtle Diagram is a tool that provides a detailed breakdown of all thecomponents that go into a process• It provides a view of the entire process, including activities that areinterconnected with those of different business functions are organizationallevels• At the center is the process itself, represented by the body of the turtle. Thehead, tail, and legs represent the 6 factors concerning the process• Before starting the process mapping, it is suggested to create a simplevisualization of the processes that show the order in which they occur.Process Mapping Through Turtle Diagram• The following are the factors of the Turtle Diagram:– Process: This part of the diagram lists any steps that add value or come under the scope ofthe process.– Inputs: This section outlines the intricacies of the process, listing the information,documentation, and other requirements.– Outputs: This section outlines the outcomes of the process, such as new documentation orguidelines, or a product.– What: This section lists the resources required to run the process, such as the equipment ormaterials.Process Mapping Through Turtle Diagram• The following are the factors of the Turtle Diagram (Cont.):– How: This section references guidelines established within the organization that determinehow the process is to be performed successfully. This includes any methods or activitiesdeemed suitable by the organization.– Who: This section lists all the personnel in the organization who are responsible for theactivities required to perform the process, or the skills required for those activities.– Results: This section determines how the organization will measure the success of theprocess, and whether it achieved the objectives set. This includes KPIs and otherperformance indicators, such as the ones outlined in the previous workshop for digitalsupply chains.– Support Processes: Depending on the process, this seventh factor might be required. Thissection lists any information or materials that aid the process and the value-add stepsidentified.Process Mapping Through Turtle DiagramProcess Mapping Through Turtle DiagramFigure 4. Turtle diagram template. Copyright 2021 by The 9000 Store• After the successfully characterization of all value-adding processes using aprocess mapping tool in Step 3, we determine and document the process levelKPIs (KPI-Ps) for all characterized processes.• These KPI-Ps are then tabulated in a single source which will be used in nextsteps• This step is done through a series of interviews and discussion with the processowners, reviewing existing procedures and policies, extracting data from theexisting performance evaluation systems, etc.Step 4: Identifying the Process Level KPIs• Once we identify all the KPI-Ps in Step 4 for the characterized processes thatoccur across all the nodes in the supply chain, we map them against the supplychain level KPIs (KPI-SCs) that were determined in Step 1 for these node• This is done to understand which processes contribute to the higher-level valuecreation objectives of the supply chain, and to monitor and track any issues thatmay be faced in the day-to-day supply chain operations• The mapping of KPI-Ps against KPI-SCs creates better transparency byconnecting the operational level activities to the supply chain level activitiesStep 5: Developing a KPI Dependency Matrix• Here, we aim to omit any duplications in the data provided as we consolidatethe information of various processes and their KPIs from multiple sources acrossthe supply chain• Once all duplicate data is removed, the database must be checked to eliminateany information regarding processes or KPIs that might be outdated based onthe current practices implemented by the organization or supply chain• We then enhance our database by adding detailed explanations that clearlydefine how each of the identified KPIs function, and how they will be measureddigitallyStep 6: Framing a Comprehensive KPIDatabase• Step 7.a (Stage 1): Monitoring Smart Devices Remotely: This step is initiallyhow a digital twin concept can generate value for an organization. Smart devicesallow for continuous monitoring of products and process performance, whilestill observing the supply chain in totality.• Step 7.b (Stage 2): Insight Generating Platform: The next stage is thedevelopment of a platform to enable the digital twin objectives. This stage isfocused on representing the physical object and environment virtually, providingdeeper insights that promote innovation and value generation across the supplychain network.• Step 7.c (Stage 3): Smarter Machines: The last stage in implementing a digitaltwin is concerned with the development of a system that is completelyintegrated. This is achieved through the interaction of people with a real-timesimulation platform.Step 7: Implementing Digital TwinsStep 7: Implementing Digital TwinsFigure 5. Microsoft digital twin implementation framework. Reprinted from “The promise of a digital twin strategy,” by Microsoft.Copyright 2017 by MicrosoftMicrosoft Azure Demo• Go to page 4 of your workbook for this week. Follow theinstructions provided to setup and run the Microsoft Azure Demo.Raise any doubts you may have. This demo will be explained inclassACTIVITY 2: Conceptualization of Digital Twins• Go to the Workshop Summary page of your workbook for thisweek. Read the question asked in Activity 2. By using theprovided data and referring to the relevant material, solve thequestion. Raise any doubts you may have YouThank
