Digital twins reshaping Vietnam's logistics and supply chain landscape | Insights

Digital twins are revolutionizing Vietnam’s supply chains as companies shift production around the world. ABeam Consulting Vietnam leverages Japan’s expertise to optimize logistics, reduce costs, and enhance resilience through AI-powered simulations, helping businesses thrive in a dynamic market.

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Yoshihiro Wake

Manager

From Japan to Vietnam: Digital Twins Power Next-Gen Supply Chains

Digital twins–virtual replicas of physical systems–are emerging as a game-changing technology in the manufacturing sector. While the technology is still in its early stages here, several pioneering companies, including ABeam Consulting Vietnam, are leading the way.

The global trade landscape is undergoing significant transformation, marked by rising trade restrictions and evolving tariff systems. In response, many companies are shifting their supply chains from China to Southeast Asia to mitigate risks and enhance resilience. Against this backdrop, the ability to digitally monitor and manage supply chains has become a critical requirement for business leaders. Identifying and addressing risks is no longer optional but essential for maintaining competitiveness.

Vietnam's logistics and supply chain industry is riding this global wave of change, experiencing unprecedented growth. The logistics market is projected to exceed $113 billion in 2025, growing at a compound annual growth rate (CAGR) of 14.3 per cent, according to the Vietnam Logistics Market Report from 2023. As the country emerges as a key regional manufacturing hub, digital transformation has become indispensable for companies aiming to stay ahead in a dynamic and competitive environment.

In this context, Japan's leadership in this area has set a model for Vietnam. The Japanese digital twin market size was valued at $1.55 billion in 2024. IMARC Group estimated the market at over $18.6 billion in 2033, exhibiting a CAGR of 28.3 per cent from 2025-2033. The market in Japan is fuelled by advancements in the Internet of Things, AI, and big data analytics, enabling real-time monitoring and optimisation.

One notable example is a logistics company that streamlined a complex supply chain, delivering to 600 stores with varying temperature requirements (ambient, chilled, frozen). The company faced challenges such as great distances between store locations and frequent small-lot deliveries. To support the company, ABeam utilised digital twin simulations to optimise the network design, exploring 26 possible site and function combinations. A key focus was determining whether mixed-temperature transport could reduce vehicle use and identifying the optimal network configuration to support this approach. Ultimately, this effort resulted in the discovery of the best possible logistics network for the company.

The Japanese government's 'Society 5.0' initiative has further accelerated digital twin adoption, with investments exceeding $5 billion in smart logistics and manufacturing technologies. The maturity of digital twin adoption varies across Japanese industries, with automotive manufacturing leading at 65 per cent adoption, followed by electronics at 55 per cent, heavy machinery at 45 per cent, and chemical processing at 35 per cent.

These success stories provide valuable insights for Vietnam's emerging smart manufacturing sector.

Digital twins from concept to reality

"Digital transformation doesn't always require massive overhauls," says Ryohei Oda, managing director of ABeam Consulting Vietnam. "Having witnessed the successful digital twin implementation journey in Japan, we understand that the key is to start with manageable steps, focusing on specific pain points and gradually scaling up successful solutions."

Figure 1. A three-step roadmap to digital twin success in supply chain management

An example of this approach can be seen in a beverage manufacturer leveraging Coupa, a cloud-based, business-spend management platform and ABeam collaborator, to optimise their supply chain network. By analysing current operations, simulating future scenarios, and optimising supply plans–such as determining which factories produce what and aligning them with specific demand regions–the company achieved significant results: a 9 per cent reduction in production and logistics costs and a 25 per cent decrease in transport energy consumption.

NOTE: Do you care to name WHICH beverage manufacturer? Also, what does 'Coupa' that mean?

However, this was only the first step. ABeam supported the client's team in internalising the simulation-based optimisation process, enabling them to confidently execute it independently. As a result, the client can now leverage timely simulations to inform their decision-making and consistently achieve optimal outcomes.

Figure 2. Understanding digital twins: key concepts and data requirements

"We believe this technology can also work well in Vietnam," said Yoshihiro Wake, lead consultant responsible for the global expansion of the Supply Chain Management business at ABeam Consulting, and Supply Chain Practice lead at ABeam Consulting Vietnam. "The country’s geographic divide between north and south necessitates a multifaceted approach to logistics hub planning. Beyond cost considerations, factors such as delivery times and customer requirements play a critical role. Conducting simulations to evaluate various scenarios is essential for devising effective and strategic logistics solutions."

Photo: Yoshihiro Wake, lead of TEF and Supply Chain Practice Lead at ABeam Consulting Vietnam

Unlock the power of digital twins

ABeam Consulting's collaboration with Coupa adds a powerful dimension to Vietnam's digital transformation journey. This partnership offers comprehensive support services that enable rapid and optimal supply chain design across departments. Coupa's supply chain design solution helps companies build highly resilient supply chains through simulation trials and analysis. By leveraging AI and digital twin technologies, it allows companies to digitally replicate their supply chains. These digital models can then undergo multifaceted simulations, considering various dynamic factors such as cost, lead times, inventories, key performance indicators, social conditions, and CO2 emissions.

"Traditional supply chain optimisation focused primarily on cost and efficiency," explains Oda. "However, today's businesses face increasingly diverse risks and social issues. Our approach helps Vietnamese manufacturers address these challenges comprehensively."

The journey towards digital transformation in Vietnamese manufacturing is marked by pragmatic progression. Starting with basic process automation, companies can gradually advance to digital twin implementations. This measured approach allows organisations to build confidence, validate results, and scale successful solutions effectively.

ABeam Consulting Vietnam leverages its digital twin approach to support both existing and newly established logistics hubs, providing thorough assessments, tailored transformation roadmaps, and continuous optimisation support. Their experience with Japanese logistics excellence provides valuable insights for Vietnamese companies looking to enhance their operations.

As Vietnam continues its remarkable ascent as a major manufacturing hub, the success of its manufacturing sector is inherently tied to the strength of its logistics networks. To fully capitalise on this growth, the development of efficient and innovative logistics hubs is essential. Digital twin technology emerges as a game-changing solution, enabling businesses to optimise logistics operations, enhance supply chain agility, and address evolving market demands.

ABeam Consulting Vietnam brings a unique combination of Japanese expertise and local market insights to support businesses in navigating this transformation. By leveraging digital twin technology, ABeam Consulting Vietnam empowers companies to seamlessly integrate logistics excellence into their manufacturing strategies, creating a foundation for sustainable and globally competitive operations.

The future of Vietnam’s manufacturing and logistics landscape is interconnected. By embracing digital transformation, businesses can ensure their logistics capabilities match the demands of their growing manufacturing presence.