Strategically managing supply chain disruption

The coronavirus pandemic and resulting changes in supplier capability, fulfilment capacity and customer buying behaviour have revealed supply chain weaknesses that need addressing beyond the immediate term.

A July 2020 survey found that 73% of businesses had encountered problems with their supplier base, and 75% had problems with production and distribution. An incredible 85% struggled due to insufficient digital technology in their supply chains.

These issues can’t all be solved immediately – they’re fundamental challenges that require focused and considered change over a period of time. However, predictive digital twins are vital tools that can be exploited now in driving that change.

Let’s look at three ways predictive digital twins are helping business leaders make evidence-based supply chain decisions that reduce risk, optimise resource allocation and deliver greater operational control.

Building agility through supply chain partner collaboration

A crucial COVID-19 supply chain lesson is that agility is just as important as resilience. OneWeb Satellites is a perfect example of how predictive digital twins and simulation help to build that agility into your planning.

OneWeb's mission is to mass-produce a satellite constellation to provide high-speed internet access worldwide. However, running the world’s first satellite serial production line involves complex processes and supply chains. Supplier rate optimisation is crucial to meeting targets and managing costs.

OneWeb Satellites uses WITNESS Horizon predictive digital twin software to accurately predict current and future-state supply chain and production requirements.

Through dynamic simulation of their supply chain, OneWeb can tell suppliers how soon to get ready and what rates are needed at specific times. They can also evaluate different rates by month, week and day, even factoring in a learning curve (because production efficiency increases over time).

This visibility has allowed OneWeb Satellites to collaborate successfully with its supply chain, meaning there’s a genuine partnership approach. As a result, they’ve effectively proactively scheduled, planned subassemblies and ensured the right level of buffer stock ahead of time. It’s foresight and collaboration-powered agility in action.

Scaling logistics to meet growth targets

NeroGiardini is a leading Italian shoe brand with ambitious international growth plans. The company invested in a new, centralised logistics hub and set a bold restocking target of 24 hours for Italy and 96 hours for the rest of Europe.

This guarantee has created a valuable supply chain network for NeroGiardini’s customers. To deliver on it, the company needed to implement highly automated processes with practically zero margin for error.

NeroGiardini used WITNESS Horizon to create a predictive digital twin of the proposed facility, including detailed layouts and routings and process control rules for the logistics hub, so they could test and validate the intended plan before investing.

This “Twin of the Future” gave the company a visual roadmap for its intended logistics operations, helping maximise efficiencies in the process while minimising the overall cost implications.

The result was a robust investment case for scaling its logistics footprint, and the assurance that it can continue to meet performance targets as it expands.

Managing trade-offs across the supply chain

A key benefit of a predictive digital twin and simulation is that it gives clarity on trade-offs between seemingly conflicting processes, such as purchasing, production, inventory, distribution and sales.

For instance, should you pursue a strategy focused on local production with lower transport costs? Or one with lower-cost overseas production and higher transport costs?

Mars Chocolate North America used predictive simulation to develop a Sales and Operations Planning (S&OP) tool to answer questions like these.

The company has six US sites, each with different production mixes, consumption requirements and bulk storage constraints. Using a predictive digital twin deployed with WITNESS Horizon, Mars predicted the supply chain performance achievable from various configurations across the sites, gaining detailed insight into these dynamic processes for the first time.

This helped Mars understand the impact of key trade-offs. For example, would it be better to make all chocolate types where they’re required or build fewer, larger facilities and ship regionally? And what’s the best way to factor in the Mars corporate principle that it’s important to manufacture as close to customers as possible?

It also helped the company identify where future bottlenecks might appear and how they can best be resolved.

The parameterised S&OP simulation asset helped quantify the optimal way to work within these parameters. It provided deep insights into existing and planned operations, identified supply chain risks, and highlighted opportunities for cost savings and performance improvements.

As a result, Mars developed evidence-based business cases for new capacity programmes, ensuring it makes the right investments at the right time.

Is your supply chain optimised for the medium term?

Do you have the right facilities, processes and assets, in the right places, with the right control mechanisms, to ensure your supply chain can satisfy your business strategy?