Reforming the Supply Chain Network with Digital Twin Technology: ABeam Consulting

In recent years, the supply chain network environment has changed drastically. Today, the smooth operation of supply chains is no longer guaranteed, and companies may face a myriad of compromising factors, like sudden changes in demand, insufficient shipping resources, and changes in consumption value.

Additionally, the evolution of the digital age, along with the rise of new players in the scene, may pose challenges, and while these changes point to new opportunities, they are also a new source of a pain point as companies become overwhelmed with work if they feel the need to switch transport routes and suppliers. Therefore "reformation of the supply chain network" is imperative to avoid risks such as increases in production/logistics costs, according to ABeam Consulting.

Making changes to supply chain networks - a network between a company and its suppliers to produce and distribute a specific product or service - is not easily tackled. This is because reforming the supply chain network will generate many trade-offs in the end-to-end process, from production to distribution to sales. For example, distributed production can cause a loss of production efficiency, and when priorities are set on the efficiency of distribution centers, it can reduce service levels. Many areas are affected at once, but it is challenging to capture the impact, so only partial optimization is achieved. Moreover, it is becoming increasingly difficult to obtain an optimal solution as it is necessary to consider cost and service level and "risk tolerance".

Supreeda Jirawongsri, Principal and Digital Competency Group Leader of ABeam Consulting (Thailand) Ltd., advised that "Companies must first and foremost understand its supply chain comprehensively and strategically through the process of 'designing supply chain', which links supply chain strategy and operations." 

There, companies will meet with two barriers preventing them from moving forward with supply chain design in the form of limitations of data analysis and siloed organization and processes. 

"When talking about data, it is difficult to quantify the impact of trade-offs in measurable terms. But, on the other hand, organizations that still follow a silo approach wherein there is an unwillingness to share information, data, or knowledge across different departments also contribute to ineffective supply chain network reformation," added Supreeda.

One solution that allows companies to break through such barriers is "Digital Twin technology". This technology, already used in Europe and the United States, will enable companies to recreate their supply chain in a virtual environment by inputting information about demand, supply capacity, and costs. The virtual representation will serve as a real-time digital counterpart to the actual process and allow for limitless testing of hypotheses without substantial risks. By running the supply chain in this environment, companies can calculate optimal trade-offs and evaluate quantitative results for different scenarios. 

A key advantage of this technology that makes it so useful for supply chain design is that the virtual environment provides a comprehensive view of each process, either working on its own or in tandem with other processes. This is important because practical supply chain analysis involves connecting to each process and looking at the system as a whole rather than individual, disconnected parts. With regards to this, the Digital Twin is a huge step forward for the manufacturing, logistics and automotive industries in helping them make informed decisions and adjust to the ever-changing supply chain environment.

"ABeam Consulting can help businesses create significant improvements by utilizing a volante-model business (Handle business as a control tower) business infrastructure and Digital Twin technology. This means the data from each department is integrated and managed on the supply chain network platform, which companies can then use to test the effectiveness of any measure of hypothesis. In effect, this allows different organizations to come together and look at the quantitative results as we move forward with designing the supply chain," added Supreeda Jirawongsri.

ABeam Consulting (Thailand) Ltd. is a subsidiary of ABeam Consulting Ltd. – headquartered in Tokyo having 6,900 people serve clients throughout Asia, the Americas and Europe providing consulting services in Thailand since 2005, ABeam Consulting (Thailand) has more than 400 professionals serving clients in Thailand with expertise in business and digital transformation services that create the future together with corporations and other organizations. As a creative partner leading the way reliably through change, we contribute to industrial and societal change. 

Please contact us at contactthailand@abeam.com or visit https://www.abeam.com/th/en for more details.