Logistics Will Be Reimagined With Digital Twins: Here's How

As of 2022, the global market for digital twins was valued at $11.12 billion. And experts estimate an impressive annual growth rate of 37.5% from 2023 to 2030.

Digital twins help connect the physical and virtual worlds, which means we can predict when things need fixing, work more efficiently, and create less waste. So, embracing the potential of digital twins is a crucial move as the logistics sector steps into the new Industry 4.0 era.

Which benefits can this technology bring to the logistics and supply chain industry?

Let’s take a closer look at them in this article.

What Is Digital Twin Technology?

Digital twins are virtual replicas of real objects. For example, if you want to make changes in a supply chain, you can create a digital twin to test things virtually without disrupting actual operations.

These digital twins combine the Internet of IoT, Big Data, AI, and ML to construct virtual environments. Sensors on physical objects collect real-time and historical data, which is then used in the digital twin.

AI and ML simulate real-world conditions, behaviors, and interactions within this digital realm. So, with digital twins, teams can create precise models, explore different scenarios, and predict problems before they happen in reality.

• In manufacturing, digital twins are used to model production lines accurately, helping operators identify bottlenecks, enhance efficiency, and minimize downtime. They can even simulate how new components interact with existing systems before physical implementation.

• In logistics, digital twins can simulate entire supply chains, offering valuable insights into areas like warehouse operations, inventory management, and transportation efficiency. By pinpointing potential disruptions, companies can develop stronger, more resilient, and efficient logistics networks.

This technology has the potential to boost revenue by up to 10% and improve product quality by as much as 25%.

How Does It Work?

It all starts with a group of experts, data scientists, or math professionals, who closely study the data and physical characteristics of a real-world object or system. They use this knowledge to build a digital model that mimics the real thing.

Then, developers create virtual models that constantly receive real-time data from the physical object through sensors. It allows the digital twin to replicate events in real time.

Digital twins can be as simple or complex as you need, and the quality of the virtual model depends on the data you provide.

You can use this technology during product development to provide feedback or as a standalone prototype to predict what might happen once you create the physical version.

What Are the Use Cases of Digital Twin in Logistics?

Warehouse Management

A digital twin model provides up-to-the-minute insights into all activities within the warehouse. It's like having a map that can direct you to the best spots for inventory, help you monitor supplies, and figure out the quickest paths for your busy loaders.

It also lets you assess how layout and process changes might affect operations without actually implementing those changes. This helps you make the most efficient use of your space and resources.

For example, IBM offers a system that uses sensor data and point-of-sale information to create a virtual replica of your inventory. Their digital twin can forecast demand, streamline the supply chain, and add automation to warehouse inventory.

Transportation Management

With real-time data on location, condition, and status, businesses can identify and resolve potential issues with packages or cargo. Digital twins also help with selecting the quickest routes based on real-time traffic data from various options.

It's basically a personal GPS that finds the fastest path, ensuring efficient deliveries and reduced fuel consumption.

With a digital twin, even vehicles let you understand their surroundings and performance to make informed decisions about fleet management. For example, FedEx uses digital twins to map out the best routes for their trucks and monitor shipments around the clock.

Supply Chain Management

Digital twins provide a comprehensive view of supply chain management, incorporating production, inventory, demand, and procurement data with real-time insights for informed decision-making.

Digital twins, using advanced analytics and AI, optimize resource utilization, planning, and risk reduction. They identify vulnerabilities in supply chains and warn us to take proactive measures. Real-time data enables timely issue resolution and ensures customer satisfaction remains high.

How Can You Get the Best Results from Digital Twins?

Creating digital twins is a complex task. If you want to get started with this technology, you should first focus on the specific areas that match your goals. You need to make accurate digital models of complicated things, and they have to match the real world in real-time.

Also, for digital twins to work well, you need to have good-quality data at every step of the supply chain. So, if you put good data in, you'll get good results.