The benefits of digital twins in supply chain management

Categories: Supply Chain.

With more emphasis being placed on supply chain stability and resilience, companies are looking for ways to update their supply chain management methods to avoid disruption.

A digital twin can help. This valuable approach to projecting design and implementation challenges is used in many industries – but, in supply chain logistics, it’s extremely helpful in seeing how potential changes can impact the entire system. 

More than just a way to improve processes within a company or port, digital twin technology can be used to design a supply chain network that’s more agile and resilient. So, what exactly is a digital twin and what are the benefits for supply chain managers?

What is digital twin technology?

A digital twin is a highly detailed virtual simulation of a physical system, process, product, or place that can mirror and measure its physical counterpart. It’s a part of Industry 4.0, which is starting to become a reality as digital transformation surges in supply chain logistics and management.

Digital twins derive information from numerous sources, including IoT devices like sensors, logistics and transportation databases, operations databases, and vendor info like CRM data, bills, and invoices. Some will also source user experiences like online reviews and service tickets to diversify the data sets further. This wealth of knowledge enables teams to experiment with various real-world scenarios and variables to see their impact before letting the action play out in real life. 

Digital modeling allows for more data-driven decision making and visibility by identifying patterns and finding opportunities for improvement. It can also be used to game out scenarios and troubleshoot rollouts for smoother implementation by navigating future issues or scenarios that may develop. 

This forward-looking visibility is immensely valuable for shipping and logistics leadership. It allows for responding to issues that may have been predicted ahead of time, rather than relying on reactions to the unknown after something goes wrong.

Benefits of having a digital twin in supply chain management

Some main benefits of digital twin supply chain modeling include: 

Forecast problems before they occur — Being able to see and predict issues before they arise is immensely valuable for developing response plans and doing risk assessments. 

A supply chain digital twin can warn of potential future issues, so logistics teams can take preventative measures before the moment arises or decide to take a different direction altogether. This technology also allows for the ability to analyze a ton of data and avoid existing discrepancies from recurring in the future. 

Improved planning and processes — Digital twin models can allow you to see the impact of taking a risk before you do it. You can see how a situation will play out and impact savings, ROI, and other key metrics. Modeling allows leadership teams to monitor for risk, test probabilities for emergencies, and try different scenarios to solve them. 

Optimized transportation — A digital twin in supply chain forecasting can assess how changes in supply and demand affect physical locations and build solutions for supporting systems alongside last-mile operations. 

Real-time data collection allows for advanced modeling of available transportation, including where common shortages and disruptions occur. This software can see high-level trends that even experienced managers may not have visibility into, which allows them to create better planning for using resources. 

With this bird’s eye view of operations, logistics teams can model how deliveries play out, rather than relying on guesses and gut feelings for vital transportation decisions. This is especially important for cold chain logistics shippers and carriers who rely on efficient transportation. 

Avoid stockouts and warehousing issues — Ecommerce brands increasingly rely on a network of highly localized warehouses to manage inventory and provide fast turnaround times. 

Digital twins can aid in optimizing inventory with supply/demand forecasting to balance backstock in a single warehouse or across the entire network of warehouses. 

Simulate emergencies to create a response plan — Maintaining a nimble supply chain is more important than ever as unexpected contingencies like natural disasters create headaches for international trade. We saw this play out on a grand scale during the early days of the COVID-19 outbreak, and echoes of these issues still remain throughout the system. 

While not everything can be predicted, using technology to prepare for common disturbances can aid in creating plans for how to deal with different categories of disasters, such as natural disasters or other catastrophic events. Digital twins allow logistics teams to game out contingency plans and scenarios before they’re needed.


Technology has given us the ability to have insight into how supply chains work as a whole. Digital twins allow us to see how one small change can impact the entire supply chain. This ability to see potential future outcomes can set us up for success so we can prepare for anything that may come our way.

Want to integrate the latest technology into your portside operations? Contact us today.