Nowadays with the ongoing disruptions on the global supply chains, Supply Chain Planners are constantly having to do risk assessments and revisiting the production plans more often than before, highlighting the importance of a supply chain digital twin. Let’s see what a typical day for a supply chain planner looks like every time there’s a logistics breakdown:
What does a day look like for a CPG planner?
Sofia is a planner at a consumer-packaged-goods manufacturer. Today she starts her day with the news that container carrying critical packaging material is stuck at the customs.
She takes a deep breath and starts to sing “Every Little Thing is Gonna Be Alright” and decides to check the current inventory levels of packaging materials and this week’s production orders waiting for those. She realized that this container was already delayed for a month due to a port lock-down in Asia so they have already used up all their safety stock, which didn’t take into account promotional activities.
She prepares the list of the products that will be impacted, estimates the related service risks, and sends these notes to her team. She raises her eyes from her screen and realizes her coffee has already gotten cold …
She is already overwhelmed and then her phone starts ringing; it is one of the account managers working with a big customer. She’s seen the email about the production delays and is furious because the promotion they had planned with that account needs the product on the list.
She tries to understand the options to minimize the business impact of this crisis. After she evaluates various options, she decides to check with operations if it is possible to produce that SKU as soon as the container is custom-cleared with overtime. Right at the very moment, she receives a chat message from operations saying that they have already reached the overtime limit for that month, and it is impossible to produce that SKU to fulfill the promotion order on time.
By that time, it is already noon, she’ll spend the next couple of hours in back-to-back weekly planning meetings.
What is a Supply Chain Digital Twin?
A digital twin of the supply chain is a digital replica of the physical realities such as capacity and resource constraints with real-time data flows from vendors and 3PLs. It can manage crises like these more proactively by:
- Getting automated alerts on items that are likely to stock out in the upcoming weeks
- Reflecting the impact of volatility of supply as well as the volatility of demand to dynamically adjust safety-stocks
- Automatically adjusting production plans based on most recent demand considering material and resource constraints
How can a Digital Twin of the Supply Chain help?
Automation of planning processes minimizes the time Sofia spends on daily planning so that she and the rest of the planning team can focus on exception management and more strategic and tactical issues.
A digital twin can also:
- Detect the delays in the supply chain via real-time data integration,
- Enable fast impact analysis and scenario-comparison and
- Optimize and re-optimize plans automatically without need for manual analysis
Overall, a supply chain digital twin will allow production planners, like Sofia, to better detect, adapt, optimize, and strategize their supply chain planning operations. Here’s another great read that we think you will find helpful that goes into details of transforming supply chains to create a digital twin.