Digital twins are the latest technology disrupting warehouses and supply chains.
It doesn’t get much cooler than this. Visualize your entire warehouse layout…every shelf, every pick path, every process…then recreate it virtually. But this isn’t a static model. A digital twin lives and breathes in real time, allowing you to make changes to your virtual warehouse before implementing them IRL.
Digital twins are still in their infancy, which means they offer a huge opportunity for tech-forward logistics companies who implement them.
…But there’s a caveat.
In order for digital twins to reach their full potential, they need to be powered by AI-driven demand planning. Without accurate forecasting integrated into the digital twin, it’s nothing more than a 3D visualization. But when you take real-time data and marry it with predictive analytics and inventory intelligence, you get a forecasting system that can accurately predict fluctuations in demand, maximise stock levels and minimise waste before they’re even aware of the problem.
Let that sink in for a second.
You’ll Learn:
- What Are Digital Twins In Logistics?
- Why Virtual Warehouses Are Changing The Game
- How AI-Driven Demand Planning Powers Digital Twins
- Real-World Benefits You Can Expect
- Getting Started With Digital Twin Technology
What Are Digital Twins In Logistics?
Essentially, a digital twin is a clone of your real-world operation that exists in a virtual space. If your operation is a warehouse or distribution center, you can recreate it exactly in virtual space.
A digital twin captures data from your IoT sensors, warehouse management software and any other data sources to create a digital facsimile of your operation that can be analyzed and manipulated. Everything from individual pallet movements to stock levels are mirrored in the digital world.
You can test out different warehouse layouts in your digital twin. See how altering pick paths impact order fulfillment times. Everything that happens in your warehouse is represented in real time in the digital world.
According to Grand View Research, global spending on digital twin technology is expected to reach $53 billion by 2028. While that number includes application in industries outside logistics, it still paints a clear picture of this technology’s future.
Why Virtual Warehouses Are Changing The Game
A virtual warehouse is a digital twin of your warehouse. It’s a complete replica of your warehouse that you can use to test different scenarios and ideate without breaking a sweat in the real world.
Let’s break down why virtual warehouses are so powerful.
- Rearranging shelf stocking doesn’t require a team of workers. You can do it instantly in the virtual world
- Testing different pick paths is free
- You can go wild with staffing allocations to see how changes impact efficiency
And that’s just scratching the surface of what you can do with a virtual warehouse. These digital models run in real time alongside their physical counterparts. When you make a change IRL, it needs to be updated in the virtual world. It’s a feedback loop that continuously improves over time.
Warehouse digital twins helped one consumer goods company reduce costs by 15% at their distribution centers.
Imagine if you could slash your operating costs by that much just by changing how you manage and plan for inventory. Pretty wild.
How AI-Driven Demand Planning Powers Digital Twins
If digital twins were vehicles, AI-driven demand planning would be the engine. Without it, you have a seriously fancy cabinet with legs that go nowhere.
Ok maybe that’s a bit dramatic but you get the point.
Digital twins + AI-driven demand planning = a proactive warehouse.
AI-driven demand planning uses past sales data along with external factors like seasonality, market trends, weather, etc. to predict future demand with pinpoint accuracy.
Pairing that level of forecasting with a digital warehouse allows teams to:
- Predict future stock needs months in advance
- Dynamically adjust inventory placement based on predicted demand
- Dramatically reduce both overstock and understock
- Automate replenishment cycles
When you combine real-time warehouse data with future demand predictions, teams have a complete understanding of current operations as well as a crystal clear view of what’s coming down the pipeline.
Real-World Benefits You Can Expect
There are a ton of benefits to implementing digital twins and virtual warehouses into operations. Here are a few of the best.
Increased cost savings: Digital simulations allow you to test out every change in a risk-free environment. Say goodbye to costly warehouse rearrangements that don’t pan out. Eliminate wasted labor by optimally staffing during peak and off seasons.
Informed decision making: Modeling every scenario before execution leads to smarter decisions being made. Warehouse managers have gone from guessing to making confident, data-backed decisions.
Higher fulfillment rates: Digital twins allow you to perfect picking routes, shelf stocking strategies and order processing workflows. Streamlining these operations leads to faster, more accurate order fulfillment.
Mitigate risk: The digital world is the perfect place to test how your supply chain handles unexpected disruptions. Simulate these scenarios before they happen so you’re always one step ahead of the curve.
Reduce your carbon footprint: Every optimized process means less waste. Warehouses can reduce energy consumption, make less frequent (but smarter) shipments and utilize space more efficiently.
Getting Started With Digital Twin Technology
Ready to give digital twins a shot? Great. Here’s how to dive in.
Step 1: Data. Before you can create a digital twin, you need to make sure you’re collecting quality data from IoT sensors and your warehouse management software. Everything you want replicated in virtual space needs to be measured in real life.
Step 2: Start small. Don’t try to build a digital twin of your entire supply chain right out of the gate. Start with one warehouse. If that’s too much, start with one process you want to improve.
Step 3: Implement AI-driven demand planning. Don’t forget the engine!
Step 4: Test, rinse, repeat. Run simulations using your digital warehouse and compare the outcomes to real life. Use those results to improve your digital model.
Step 5: Scale up. Start small with one warehouse. Once you’ve established the value of digital twins, begin creating digital models for other warehouses and logistics operations.
Early adoption of digital twin technology could be the difference between a logistics company leading the pack or eating their dust.
Wrapping Things Up
Digital twins have the potential to revolutionize warehouse and logistics operations. By harnessing the power of real-time data and predictive analytics with AI-driven demand planning, warehouse operations can:
- Test out changes without disrupting daily workflows
- Anticipate demand more accurately than ever before
- Continuously improve warehouse processes
- Reduce operating costs and wasteful practices
Digital twins are the future of logistics. Will your warehouse be onboard for the ride?