Demystifying the Digital Twin with Coupa

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There's no question about it—the topic of "digital twins" in the supply chain industry is quite buzzy at this moment in time. This is because the digital twin concept promises to substantially mitigate risk.

Our supply chain leaders are constantly looking for better ways to deal with risk, and this technological tool seems like it might be a significant advancement in padding us against shocks (like COVID-19).

But what is the digital twin exactly? And how do we separate fact from fiction when it comes to building digital twins?

Our SCLA Executive Think Tank group colleagues recently heard from the experts at Coupa Software, creators of the cloud platform for business spend management and experienced digital twin implementers. Andrew McCarley, VP of Global Customer Value Management, and Madhav Durbha, VP of Supply Chain Strategy, shared their deep knowledge of what it takes to create the digital twin within even the most complex organizations.

First Thing First: What are Digital Twins?

Simply put, a digital twin is a virtual model of a process, product, or service—a "digital replica" of real-world things, procedures, etc.

For background, Mr. Durbha referenced a 2017 Forbes article that really got to the heart of the definition—calling the digital twin "a bridge between the physical and digital world. (I encourage you to check it out here. Much more has been written about the technology since!)

Mr. Durbha elaborated, "The concept of digital twins came up from a University of Michigan presentation (about 20 years ago). The phrase evolved from the context of product life cycle management."

In its earliest use, the concept was about having a digital replica of products working in the physical world, so manufacturers could stress test these products (strength of materials, etc.) without having to test the product physically. Digital twins became the answer to the question, "How can I test out these products in different conditions in a digital environment before I launch them into the physical world?"

Before long, the idea of creating these virtual models moved from the realm of product testing to mapping supply chain processes and networks across our industry to build resilience.

[Related Content: my previous article, Why Should We "Stress Test" Supply Chain Resilience? Make sure to give it a read!]

However, even though the concept of digital twins has been around for a while—that Forbes article said five years ago that "digital twins are becoming a business imperative"—many organizations still don't know where to start in building out the tech.

Mr. McCarley and Mr. Durbha let us know that while the technology can be intimidating, it doesn't have to be challenging to get started building the digital twin. What organizations need to understand first, though, is before "bringing a digital twin to life, you have to build an ecosystem of capabilities."

And this includes finding the right technology partner (such as Coupa Software) to help lead your organization through the build-out process, and not believing all the myths that are out there about digital twins.

Busting Myths About the Digital Twin

Mr. McCarley and Mr. Durbha shared several untrue beliefs about the digital twin that often keep organizations from embracing the technology. Let's take a look and separate fact from fiction together!

Myth 1: You have to build out your digital twin all at once

We have all been through enormous tech implementation processes in our organizations, which are often painful. The good news in building out the digital twin is that it does not need to happen all at one time. However, our experts at Coupa cautioned that you need to understand what problems you're trying to solve and build it around those.

Mr. Durbha noted, "we don't view digital twins as 'rip and replace.' Organizations may have deployed a variety of technologies, planning systems, execution systems, etc. We consider digital twin technologies to be more of an overlay—something that coexists with your existing systems and the visibility you gain from that."

Myth 2: You have to constantly feed your digital twin real-time data

Or you have a lot of IoT (Internet of Things) devices up and running. Neither of these points is valid. Though, you must ensure you're feeding your digital twin the RIGHT data. It needs to be viewed from a people, process, and technology initiative. Mr. McCarley stated, "for this to be effective, you need to have a strong COE or group with the right people, capabilities, processes, and technology."

Indeed, digital twin implementation is not a "set it and forget it" kind of thing. Instead, being successful with your digital twin is an ongoing growth process.

Myth 3: building your digital twin is a massive investment with a long payback period

You can see results relatively quickly if you approach implementation in the right way. But you need to view building the digital twin as a journey, not a destination. Mr. McCarley offered this insight: "It's not just implementing a solution. It's something that you'll build on and mature over time and be able to recognize value along the way. Don't view this as just a technology initiative. It's a much broader business initiative."

So, Why Build the Digital Twin?

Essentially, any question you need to answer when building or altering processes in your organization can be answered within the digital twin!

Mr. Durbha said, "When the stakes are high, what do you need? You need simulators. You don't take a novice pilot and put them in a plane and say, 'Off you go! Start flying.' You put them through a variety of simulation exercises. You stress test them under different conditions, see how they respond and react, then qualify the pilots and go on to the next stage."

The digital twin is your organization's "flight simulator" designed to save everyone time and reduce costs.

Once built out, the digital twin will always be there to help you. So you can't think of it as a once-and-done technology initiative but as a continuous program that you're running, which is providing actionable recommendations and changes. And almost everyone across the organization can use it!

Gone are the days when you need an operations research expert to run models. With your digital twin, you can spread this out so all leaders, managers, and "doers" within the organization can ping questions to the digital twin and get insights from it so they can enhance their daily work.

Has Your Organization Implemented a Digital Twin?

And are you utilizing the digital twin to stress-test your supply chain? If so, we would love to hear about your experiences at SCLA. Please connect with us, or reach out to me directly to join the conversation!

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Monday, 22 July 2024

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