CEO Insight: Digital twins unlock supply chain transparency benefits

written by Michael Pooley, 15th Ιούνιος 2023, in CEO Insights

The digital twin is the modern, risk-free sandbox to try out blue-sky ideas. It’s also a place where solutions for the real world are explored and discovered. What does this visibility technology offer the fresh grocery supply chain? My thoughts on the digital supply chain twin.

Over 50 years ago, the first digital twin usage made a difference to life in space. More accurately, it saved the lives of three astronauts on NASA’s near-disaster Apollo 13 moon mission. Launched in April of 1970, the Apollo spacecraft famously got into trouble on route, but human ingenuity in Houston got the men back home safely – thanks in part to an exact replica on earth of the intricate set-up in outer space.

According to NASA, the engineers and fellow astronauts on the ground tried out different rescue scenarios in a simulator of the Apollo 13 spacecraft – risk-free. They were then able to pinpoint the one life-saving option that would most likely work in space. Unsurprisingly, the fascinating story of this thrilling rescue was turned into an Oscar-winning film starring Tom Hanks.

While life along the modern fresh grocery supply chain may never be exciting enough for a film with Tom Hanks, it does have its moments. And it could definitely benefit from more digital twin technology.

How the supply chain benefits from digital twins

On the most basic level, a digital twin is a virtual world that replicates specific components and processes in the real world. Think Houston’s simulator on the ground and Apollo 13 in space. For today’s complex fresh grocery supply chains, however, such a basic model doesn’t go far enough.

Most supply chains now involve many steps, players, environments, physical assets, product categories and moving parts. Each one is yet another variable that can trigger potential challenges and disruptions or lead to exciting opportunities and a competitive edge. Digital technology can bring increased transparency to these variables and, subsequently, to the entire supply chain.

Digital technology enables data-driven decision-making

At IFCO, we are already creating and using the core building blocks for such a digital twin approach. We have successfully tested and applied established GPS and RFID tracking technology to tackle low visibility along the fresh grocery supply chain. Microchips embedded in smart shipping containers, and in our own robust reusable packaging containers, can track journeys from point A to point B, as well as fluctuations in temperature and unexpected movements.

Add the latest technological innovations to the mix – Industrial Internet of Things (IIoT), artificial intelligence (AI) and machine learning (ML) – and you can capture, send and analyze data sets in ways that lead to impactful results in real time. Big data analytics help identify patterns and relationships that inform your decision-making. Ultimately, a digital approach can create enough actionable insights to improve the resilience and sustainability of your supply chain operation. In my view, this is where we should be most excited about the potential of the digital twin and the future of the fresh grocery supply chain.

“A digital approach can create enough actionable insights to improve the resilience and sustainability of your supply chain operation.”

Michael Pooley , IFCO CEO

The real potential of digital twin technology

According to Digital Twins: Adding Intelligence to the Real World, a survey of 1,000 organizations by the Capgemini Research Institute, digital twin technology is increasingly seen as an essential tool to help businesses navigate our uncertain economic environment. Companies already working with digital twins see at least 65% higher benefits through increased sales, improved customer satisfaction, reduced costs, and improved sustainability. While this report offers a broad-brush snapshot of digital twin benefits, my focus is firmly on the fresh grocery landscape. What are the most promising aspects of digital supply chain twins for our industry? First and foremost is the difference it can make to sustainability and overall supply chain resilience. And it can do this on multiple levels that invariably overlap.

Seven key benefits from a digital supply chain twin

In my opinion, there are at least seven key benefits to adopting digital twin technology that are most relevant for our industry. Taken together, they are essential to building resilience and making the fresh grocery supply chain sustainable.

Improving sustainability, eliminating waste

Digital twins can replicate food distribution systems and simulate intricate logistics operations. With the right digital approach, you can better monitor cold chain integrity, predict delivery shortfalls and speed up appropriate responses to delays or disruptions.

Better visibility of potential issues helps maintain the quality and safety of perishable food products during transportation and storage, thereby minimizing food waste. It can also help identify and prevent actions that waste energy and other key resources.

Minimizing greenhouse gas emissions

Using delivery optimization algorithms, we can determine how to improve the flow and shelf life of perishable fresh products. Given the environmental impact of the transportation side of our industry it is imperative that we take the most efficient routes, run the smoothest schedules and ensure timely delivery.

Improving transparency for shoppers

Nutritional, environmental, origin and shelf-life information that consumers increasingly expect can be more easily captured in digital twins and communicated to retailers and shoppers through digital labeling technologies. When implemented, this will help simplify and enhance the transparency of your operations.

Running future scenarios

Smart food chains help us run different scenarios and modeling in a much more efficient and rapid way. Data twins allow us to ask future-oriented "what if" questions so we can pinpoint measures that reduce waste and make better use of your resources.

Enhancing traceability and compliance

Digital tracking technologies unlock high levels of traceability, satisfy regulatory compliance and prevent food fraud. A digital representation of the grocery supply chain can also support the timely and targeted response to safety violations.

Improving staff deployment

In the digital twin you can simulate how productivity will be impacted by changing work schedules or areas. This approach can help predict which set-ups or arrangements will be most productive.

Simplifying prototyping

Digital twin technology is especially useful in prototyping stages. The implications of changes to a design or system can be played out virtually first, which can lead to more agile innovation processes.

Putting the right roadmap in place

The modern fresh grocery supply chain can run far more efficiently and reduce waste if we’re able to experiment first with digital simulators that replicate what’s really happening in the real world in real-time. By using real track and trace information we can create digital simulations that actually reflect reality, rather than what we assume is happening. Often the reality and our assumptions differ markedly! We can simulate changes and validate the impact of such changes before committing to them.

But before we reach this goal, the team at IFCO is working intensively on pilot trials and full-scale digital roll-out programs, with our customers and experts in our field. Our combined direct experience and in-depth knowledge of the complexities of the fresh grocery supply chain feeds into our research, our digital modeling and practical solutions to remove waste from grocery supply chains.

Key questions to focus on most include the following:

Data management

How do we standardize, manage and integrate multiple data sources and flows, including existing ERP systems, in a way that is scalable and future-oriented?

User experience

How can we make the digital twin accessible to everyone who needs to use it. How do we integrate the information with our customer’s systems and present actionable insights in a meaningful way so that you see results?

Data security

How do we ensure data is safe and the input and output can be trusted?

Data analytics

What is the best use of AI and machine learning tools?

An exciting time to work in digital

Digital twins have undergone a remarkable shift since the Apollo 13 mission. Overall digital tools are certainly more powerful, flexible and robust today. Computer modeling has become more sophisticated. As well as ubiquitous. So, it’s not just the likes of NASA who can now reap the benefits of such digital tools. The EU, for instance, is even funding a digital twin of the planet earth.

In many ways, the digital twin for the fresh grocery supply chain is still very much in its infancy. But its potential is huge, as the guest speakers in our recent IFCO webinar Discovering digital and sustainable fresh food supply chains made clear. This is why we are taking on the challenge to develop digital twin technology. Data-driven insights will help our industry adjust operations appropriately and define new strategies that will help IFCO in achieving our purpose of making the fresh grocery supply chain sustainable.

We are already seeing that better sensors and communication technology are allowing us to gather more relevant data faster and cheaper, to determine the best course of action with more confidence. As a result, supply chain visibility technology will capture, process and communicate conditions and options more effectively and in real time.

In my experience, digital twins are dynamic platforms that can only be successful through close collaboration with experts from every aspect of the real-world fresh grocery supply chain, data scientists and IT professionals. I believe our approach to enhancing the grocery supply chain through digital technology will have a profound impact on how we build supply chains in the future.

Discover more about our innovative products, services and digital solutions for a future-proof supply chain.

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