Unveiling Supply Chain Transformation: IIoT and Digital Twins

Digital twins and IIoTs are evolving technologies that are transforming the digital landscape of supply chain transformation. The IIoT aims to connect to actual physical sensors and actuators. On the other hand, DTs are replica copies that virtually represent the physical components. The DTs are invaluable for testing and simulating design parameters instead of disrupting production elements. Still, the adoption of both technologies remains limited in real-world scenarios.  

This article explains the Industrial Internet of Things (IIoT) and digital twins (DT) technologies, and how they transform business and the global environment to optimize supply chain ecosystems.

Insights of IIoT Technology in Supply Chain

Pioneering technologies, such as IoT, are already well-known to businesses. The Industrial Internet of Things (IIoT) extends the networks of physical sensors and controlling software to connect a centralized web console to receive data from distributed smart devices.

 A few of the market trends show the importance of adopting IIoT technologies:

• A study performed by Grand View Research emphasizes growth in IIoT technology to $949 billion by 2025. 
• The global marketplace of IIoT is expecting a growth of USD 1,693.44 billion by 2030, with a 23.3% CAGR from 2025 to 2030.
• A consulting firm, Accenture, predicted a $14 trillion 2030 global turnover of the IIoT industry.

Contrary to generic IoT, which is more oriented towards consumers, the IIoT enables the communication and interconnection between different machines, industrial devices, and sensors within a supply chain management ecosystem with the aim of business optimization and efficiency.  

The incubation of IIoT in supply chain management systems aims to enable real-time monitoring and analysis of industrial environments, including manufacturing, logistics management, and supply chain. It boosts efforts to increase productivity, cut downtime, and facilitate information and accurate decision-making. 

The IIoT Technology, empowered with advanced innovative technologies, including artificial intelligence, machine learning, and industry automation, can do wonders in the modern competitive marketplace. In the supply chain management pipeline, IIoT has become a 'must-have' technology that can revolutionize it at every stage with smoother and better operations. 

Advantages of IIoT in Supply Chain Management

Real-Time Tracking of Assets Through Sensor Devices

To enhance productivity in supply chain management, including tracking raw materials, in-progress assignments, and finished products, IIoT sensors can be deployed on containers, goods, and other assets. It provides better visibility of goods and their conditions, enabling efficient inventory management and planning.  

Optimization Through Predictive Analytics 

Global manufacturing firms lose $ 1 trillion annually due to machine downtime, which can be avoided by deploying innovative technologies. Adopting IIoT technologies enables companies to identify machine failures before actual operation disruption proactively. IIoT equipped with predictive analytics algorithms can detect early machinery failure before it occurs. The proactive approach reduces potential downtime, prevents disruptions, and enhances business optimization.  

Increased Visibility in Supply Chain and Better Transparency 

Lack of visibility is a significant concern and a big barrier to efficient supply chain management. The IIoT offers visibility to stakeholders by monitoring goods, identifying potential bottlenecks, and facilitating effective collaboration among partners. 

The IIoT technology provides better insights by giving a comprehensive view of the supply chain management ecosystem, starting from shipment status, goods tracking, adequate transportation, fault tracking, and early prediction of faulty equipment or machinery. The benefits of IIoT are multi-fold. It enhances the production stages and provides an informative decision to authorities that helps in better logistic management, making better and optimized delivery schedules.  

Early Demand Forecasting and Inventory Management 

Undoubtedly, IIoT sensors integrated with the supply chain management ecosystem capture real-time data, which can be leveraged for analytics and demand forecasting to take the business to the next level. Businesses can likely face a shortfall during a specific period, and early forecasting of demands can enable businesses to make informed decisions so that production becomes more optimized and accurate to avoid any shortfall or overstock situations.

Recommendation and Data-Driven Information Decision

By analyzing a large amount of data from IIoT sensors, predictive analytics algorithms can be used to develop a recommender system to facilitate authorities to give pre-emptive and proactive decisions that help the business minimize the risk involved. Organizations can determine the market trends, anticipate the marketplace, and promptly respond to avoid service disruptions or the risks involved in the supply chain management lifecycle.  

Smart Warehouse Management

The incubation of modern technologies, such as IIoT, brings innovative management to the supply chain warehouse. Automated and real-time inventory management takes the business to the next level, be it a computerized picking and packaging procedure, tracking of faulty devices, or in-progress delivery. It boosts business efficiency by reducing manual efforts and minimizing the chance of human errors.  

Efficient Quality Control

The advancement of IIoT in supply chain management offers innovative solutions that facilitate the quality and condition of goods. These innovative solutions ensure the customer receives a better product that meets the quality standards. Consistent delivery of high-quality products to the customer increases the customer's satisfaction, loyalty, and business reputation in the current competitive marketplace.

Integration of IIoT in Supply Chain and Its Future

Like other domains, advanced modern technologies also significantly impact the supply chain. As we progress into the current digital world, IIoT will play a significant role in the transformation of supply chain management.   

A supply chain equipped with IIoT will be a main ingredient in boosting real-time monitoring and enabling informed decision-making. Every stage of the supply chain ecosystem will have the impact of IIoT, like automated inventory management, health monitoring of goods and their tracking, analytics, and real-time response to meet the current marketplace. IIoT is a boon to supply chain management that will lead to efficient response, adaptability in the evolving modern digital world, and meet customer requirements.  

The impact of AI algorithms will be the future of supply chain management, which will move towards predictive and prescriptive analytics, forecasting future demands, early identification of risk, and optimizing business efficiency through utilizing the vast amounts of data generated from IIoT devices and sensors. This way, the companies will be more proactive than conventionally reactive, resolving potential risks before they escalate further. 

Industrial automation will transform the entire supply chain ecosystem, encompassing every phase and aspect. Integrating IIoT will lead to more streamlined, optimized, and error-free business operations. With the transformation from automated inventory management to AI-powered demand forecasting, the supply chain will be scalable, robust, and more reliable in a different paradigm.

Digital Twins (DTs): Key Technologies 

Digital simulation (DT) differs from the industrial Internet of Things and other simulation technologies. DT gives a comprehensive distribution between the physical and digital worlds. DT has five different technologies to connect, collect, and store real-time data in the supply chain ecosystem to provide meaningful insights into the collected data and optimize the functions in the supply chain (Refer to Figure 2), primarily representing the physical objects digitally. 

• IoT is a critical component in the supply chain for better automation.
• AI provides real-time analytics and predictive forecasting by processing vast amounts of collected data.
• AR and VR make digital twins a realistic application.
• Cloud computing offers services without disruption. 
• Blockchain technology is an evolving, decentralized, and growing technology in the supply chain. 

Conclusion

This article describes the benefits of the Industrial Internet of Things (IIoT) and digital twins (DTs) and how they will revolutionize contemporary supply chains, including automation, demand forecasting, predictive analytics, and informed decision-making to minimize risks and issues early in supply chain management. The adoption of DT technology is growing, but its potential advantages to business and the global community are still untapped in digitally connected worlds. 

However, technological benefits also come with challenges that must be navigated and addressed before they escalate, such as migration cost and complexity, data security, implementation, and operational cost of IIoT. It is smart to stay ahead in the modern business world and streamline your business by adopting the IIoT and DT.