Digital Twin – an Exploratory Study on its Opportunities and Challenges from a Supply Chain Perspective

Ever heard about Digital Twin? You might have. Ever heard about Digital Twin in Supply Chain? Maybe not.

Johanna Falk and Emma Sandén have now finished their master thesis on Digital Twin and its opportunities and challenges from a Supply Chain perspective under the guidance of Jan Olhager at LTH. They had the great opportunity to write their master thesis for Northvolt, the Swedish battery manufacturer focused on establishing a supply of sustainable batteries in Europe.

Abstract
At the forefront of the fourth industrial revolution, technologies such as digital twin seek to shift the way industrial companies operate. A digital twin is a virtual replica of a product, system or process. Historically, the focus has been on representing single objects but it is now shifting to interconnected processes, such as supply chains. Advanced versions of a supply chain digital twin can integrate physical and virtual spaces by, in real-time, replicating supply chains digitally. This allows companies to gain visibility of their supply chain and helps them make well informed decisions. However, there is a growing concern that digital twin might just be a buzzword, and that the hype will soon die down. As the technology is relatively young, it is hard to understand its true value. This question was asked by Northvolt, a newly established battery manufacturer in Sweden. We were tasked with investigating this and providing Northvolt with a point of view on how digital twin could benefit their supply chain.

The research showed that there is value in digital twin for Northvolt as long as a clear business case can be identified, where no other solution can fulfil the purpose at a lower cost than digital twin. A digital twin could help Northvolt achieve cross-company planning and provide them with material flow visibility, two characteristics they want to realise when the supply chain is operational. In order to successfully implement a digital twin, it is crucial to secure of digital thread of data throughout all supply chain operations. In addition, this includes that the digital thread must be supported by a digital strategy that covers all supply chain entities. Interviews with Northvolt employees showed that Northvolt has very competent digitalisation and IT teams, with the ambition of making Northvolt a fully digitalised company. This entails that they have created a perfect growing ground for digital twin. Moreover, as Northvolt has a high level of vertical integration, it entails that they possess a lot of data in house. However, they must find a way to access the data from external parties in the digital thread if they want an end-to-end solution. Suppliers of raw materials in the battery industry have a varying degree of digital maturity as well as a varied willingness to share data.

You can find their complete work here.

Source: Emma Sandén – 24/03/2021