Advances in supply chain are enabling improvements in productivity and efficiency. One of the major driving forces behind supply chain innovations is e-commerce, which has intensified out of necessity due to the restrictions of COVID-19. In February 2022, Forbes reported that during the pandemic e-commerce grew 50% when comparing e-commerce sales in 2021 to e-commerce sales in 20191.
As consumer demands are increasing, so are their expectations from supply chains in terms of product delivery. Consumers expect product delivery in days (or even hours) from the time of placing the order and at little or no cost. This is a difficult challenge for the supply chain industry, but one that the industry is addressing through some amazing advancements in technology and innovation.
Many of the emerging technology and trends in material handling are centered around Industry 4.0 and smart automation. As the fourth industrial revolution, Industry 4.0 sets out to increase automation through the application of the internet of things (IoT), sensors, advanced communication systems and digital twins to achieve smart factories. In the realm of supply chain, this involves the development of smart warehouses, smart logistics systems and smart supply chain systems. Information transparency achieved through the collection, analysis and communication of data can lead to better decisions and more efficient and robust supply chain systems.
Digital twins enabling smarter decision-making
Digital twins for warehouses and supply chains are provided game-changing technologies for smart supply chain systems. Digital twins in the form of a simulation provide a dynamic virtual representation of the products, equipment, processes and information of the warehouse and supply chain. Coupled with sensors in the warehouse infrastructure and on material handling equipment along with data from the enterprise management system (EMS), warehouse management system (WSM), and real time location system (RTLS), a digital twin can be used to make decisions that will help to maximize productivity, efficiency and safety.
As the digital twin captures the state of the system over time, the digital twin can be used to analyze warehouse and supply chain performance. In particular, given the current system state and operational characteristics, the digital twin can be used to simulate the near-term future of the system to forecast potential issues so actions can be taken to avoid them. Furthermore, the digital twin can capture a history of the system, which can then be used to analyze how issues that arise can be avoided in the future or to ask “what if” questions in the simulated environment.
The power of a digital twin is the ability to make smarter decisions. Warehouse and supply chain decisions can typically be thought of in terms of their time horizon and can be classified as strategic decisions, planning decisions and operations decisions. Strategic decisions are long-term decisions such as the size of the warehouse to build, whether to use storage racks or bulk storage, or how many forktrucks to purchase. Having a digital twin allows the comparison of the current system with alternative system configurations prior to making a capital investment with long-term impacts.