Emergence of digital twins in Indian logistics

With digitalisation reforming many areas of a business, its potency in rewiring the great Indian logistics landscape cannot be stressed enough. One such technology which is making strides in the post-pandemic new normal in logistics is digital twins.

According to a report by Growth Market Reports, the global digital twin market was valued at USD 3.1 billion in 2020 and is projected to reach USD 113.3 billion in 2030. Further, it is expected to expand at a CAGR of 42.7% between 2021 and 2030.

Rohit Kochar, Founder, Executive Chairman & CEO of Bert Labs, defines digital twins as a software replica of the actual physical equipment or a unit station or a process line.

Kochar says, "The software replica is able to give you the actual performance, the operational and health-related condition of the physical equipment or a unit station or a process line. This is done through data-driven models. We need to have a lot of quality data to build these Digital Twins. This is then simulated using Machine Learning (ML) and Neural Network Models (NNM). Apart from the existing condition, it also predicts what the condition will be at the next timestamps. So, you will know the condition of the equipment, 5 minutes from now, or at 5:00 pm, or a week from now. It is able to predict at a very high level of accuracy as you keep training your models."

In the logistics and supply chain context, a digital twin is a software replica of the supply chain that consists of hundreds of assets, warehouses, logistics, and inventory positions.

Harjoth Singh, Chairman, Trilleco told The Indian Transport & Logistics News, "Companies use digital twin technologies to develop greater real-time awareness, augment their analysis and build more meaningful intelligence in functions ranging from product design, facilities management, logistics flows, employee safety, and asset management. Gartner estimates that over 31% of companies today globally use digital twins, reflecting the diversity in the application of digital twin solutions."

"The software replica is able to give you the actual performance, the operational and health-related condition of the physical equipment or a unit station or a process line."
Rohit Kochar, Bert Labs

Helps amp up the supply chain
Simply put, it is a tool that helps find connections between the digital and the physical world to come up with insights and help users understand the flow of data to come up with solutions and make better decisions.

Kochar points out that in SCM(Supply Chain Management), data is gathered from a variety of sources like IoT devices(e.g. sensors), logistics and transportation databases, operations databases, vendor information(e.g. CRM data, bills, invoices), and user experiences (e.g. online reviews, customer service tickets).

He adds, "These digital twin models benefit from real-time data and snapshots of planned and released work orders, sales orders, pending approvals, demand, and supply. This will help analysts to understand a supply chain's behaviour, predict abnormal situations, and work out an action plan. Using advanced analytics, Artificial Intelligence, and Reinforcement Agents, the digital twin simulates the supply chain's performance, with all the complexity that drives value, loss, and risks." 

Usage spans industries
Among the many uses, digital twin models help in moderating business continuity and apply transformation risks, forecast benefits, savings, and potential ROI before the transformation of the process occurs. It also aids in monitoring risk and testing probabilities and improves data quality for an organisation.

As part of a logistics solution, the digital twin can be created in various touch points of factories, warehouses, retailers, shopkeepers, and the company itself as the raw material or finished product passes through these inbound (to create the product) logistics and outbound logistics gates. This technology, therefore, lends itself to industries across the spectrum.

Speaking about its deployment in shipping and its impact, Joydeep Bose, Adviser at Trilleco said, "As an example, we are working with a client to reduce offloading times for ships at berth. Offloading processes are extremely time-sensitive due to the pricing impact for shipping clients at port terminals. We designed a mixed reality digital twin solution to enable equipment operators to more effectively visualize and execute the offloading processes while simultaneously reducing the probability of accident incidence that could damage expensive containers or cargo. Preliminary data suggests a time reduction of around 20% with such data is easily verifiable via time-driven activity-based costing models that can also be applied as baselines for value-share agreements between clients and vendors. The impact of improving such critical process efficiencies extends beyond reducing cost - they also make the port compete more effectively for shipping traffic and enhance the port brand as a leader in strategic technology adoption."

"Gartner estimates that over 31% of companies today globally use digital twins, reflecting the diversity in the application of digital twin solutions."
Harjoth Singh, Trilleco

Digital-first approach goes mainstream in Indian logistics
The recent Coronavirus pandemic didn't just disrupt supply chains, but it exposed some long-term weaknesses.

Abhijit Sengupta, Senior Director and Head of Business for Southeast Asia and India at HERE Technologies told the publication, "According to an ABI Research for HERE Technologies, 61% of organisations surveyed feel that predictive analytics would improve gaps in supply chain visibility. Yet only 36% of organisations plan to invest in more visibility tools within the next 18 months. From the same survey, the top three biggest organisational challenges in becoming more data-driven are the lack of internal infrastructure (52%), data security concerns (46%), and the lack of budget (45%)."

In India, a digital-first approach that worked to bring visibility and business to many industries during the pandemic is becoming mainstream and this is driving demand for the deployment of digital twins across industries, including automotive, healthcare, manufacturing, transport, logistics, and supply chain.

Sengupta added, "Specific to the manufacturing and transport & logistics (T&L) industry, the pandemic has accelerated the digital twin concept that's now affecting every warehousing management system. By mimicking the actual network – the design, operation, and optimisation of the end to-end logistics infrastructure – within a warehouse, digital twins are now more vital than ever."

From balancing costs, improving availability and cutting lead times, digital twins can improve these processes and make supply chains more resilient in the future. With digital twins, businesses in the logistics and manufacturing industry can adopt a more holistic, end-to-end approach when it comes to the management of warehouses, inventory, and products.

Meheriar Patel, Group CIO, Digital Solutions of Jeena & Company lists the merits of being a 'digital first' organisation and says, "As a Group, we operate on complete automation and pre-emptive technology architecture. Our systems not only cater to the needs of the day-to-day operation but also provides a significant amount of data for better visibility and pre-alerts for actions before an activity is missed. We have a Notification called ADR (activity Due Report) which is followed religiously by all in operational working. An ePSR (Electronic Post Shipment Documents) is what is configured as a document repository sent to customers, to avoid sending any physical paper. Our online Jeena Customer Portal has customers self-operating to know all about the shipments they operate with us. While the Service Excellence Program helps monitor our internal performance thus providing how we can better our working, thus offering better services."

However, Sengupta cautions that the future of logistics cannot rely just on digital twins alone and needs to be supported with supply chain management software and location intelligence for better efficiency.

"By mimicking the actual network – the design, operation, and optimisation of the end-to-end logistics infrastructure – within a warehouse, digital twins are now more vital than ever."
Abhijit Sengupta, HERE Technologies

To keep up with post-pandemic VUCA world
In the post-pandemic VUCA world, where volatility, uncertainty, complexity, and ambiguity are present, one can expect a thriving e-commerce industry alongside port congestions, labour shortages, and infrastructure challenges to add to the retailer and consumer woes. 

Sengupta added, " With digital twins, organisations will be able to gain end-to-end visibility to unlock situational awareness, and supply chain decisionmaking – from strategic through to executional will be greatly enhanced. Organisations can customise digital twins to their unique business needs and available data to add flexibility to solutions via fast integration with location services and comprehensive live datasets."

Singh of Trilleco points out that the trend of digital twin adoption has persisted into the post-pandemic period, with the digital twin market now projected to grow at 40%+ annually to nearly $60 billion by 2030.

Singh says, "This is because digital twins today solve problems that range from energy efficiency and grid simulation in data centres to chaos engineering for more volatile logistical processes, modelling blast furnaces in a steel plant, to even virtualizing complex edge/fog computing architectures for the purpose of identifying potential cybersecurity threats and system vulnerabilities," he says.

Aids in energy efficiency
Recent geoeconomic developments have laid bare one of the enduring challenges companies in every sector are likely to face in the mid-term, namely energy efficiency.

Bose from Trilleco says, "The development of an energy twin for a client in the port terminal segment has enabled the client to monitor the energy utilization across their facility, respond rapidly to inefficiencies by receiving real-time alerts that can be customized to a myriad of performance indicators, and automate the evolution of their energy efficiency by seamlessly informing and deploying machine learning models. The consequent impact to the bottom line is projected at 10% of the total energy-cost pool."

"Our systems not only cater to the needs of the day-to-day operation but also provides a significant amount of data for better visibility and pre-alerts for actions before an activity is missed."
Meheriar Patel, Jeena & Company

Aids in marketing, market protection & curbing counterfeiting
Lokesh Harjani, Founder & CEO – OnSpot Solutions, a Cloud-based Digital platform for Anti -Counterfeiting, Brand protection, and Product authentication spoke about how digital twins can help in planning marketing cycles for a brand and in curbing counterfeit issues.

"Once you have that digital backup of your actual product in the marketplace, you can start assessing things where you can say, we did this ad campaign between different hours in a day. And based on the data and the digital feedback, this seems to be a plan that's working for us. So you're looking at your ad spends that can be adjusted based on past deliverables, your current stock, and inventory levels and when certain campaigns are working in certain markets, maybe you carry extra stock in those markets. So this is one way in which you can get that full amount of sale based on that ad spend." Harjani said.

The other big worry for retailers and manufacturers is whether their products actually get to their intended sales areas ending in losses owing to counterfeiting.

Harjani added, "A big part of issues in counterfeiting in the grey market is that goods intended for certain areas don't get there. Maybe a company offers a 15% discount to a particular market, you have a middleman that buys that, and sells it into a market where maybe a brand has a 10% higher price. And that arbitrage there, which can be anywhere from 5- 20% is what the middleman ends up taking, not the brand company. So technologies where you have some sort of twinning or digital twin, actually lets you know that the shipment that we discounted at 15% because we're trying to grow the market here suddenly is competing with us at a better price than our own goods in that particular market."

The middleman and counterfeit goods are definitely challenges in this area which affect the bottom line of a brand by way of arbitrage, cites Harjani and he maintains that technologies like digital twins may be a good way to counter them.

Aids in asset tracking
Sengupta of HERE told the publication, "Asset tracking systems can be added to improve efficiency by providing realtime visibility of asset location within a warehouse – you can check the real-time status, health and behaviour of assets both indoors and outdoors." In addition, dynamic route optimisation can also help to improve on-time performance. Realtime multimodal shipment visibility helps keep customers happy, and yard mapping in warehouses means less time waiting around for drivers."

Location technologies can create an entire ecosystem surrounding IoT sensors within the logistics space to streamline operations and enhance efficiency."

Adoption low, yet the transition has begun
Many industry insiders believe that in the next five years or so, the Indian logistics industry will see the deployment of digital twins becoming a norm for solving specific business needs.

Harshit Shrivastava, the CEO, and Cofounder of Intugine told the publication, "The adoption rate of digital twins is still on the lower side, as most Indian companies are transitioning and have only started adopting technologies, so they do not have adequate data sets to work with. While these new-age tools can help companies, they need historical and newer data to predict irregularities. However, with the rapid adoption of Warehouse Management Systems or Transport Management Systems, and Supply Chain Visibility Tools, the adoption of a digital twin is set to increase. Digital Twins will benefit companies as they become data-centric and can extract useful information from simulations to make their processes more efficient."

Scope of the technology
One way to increase the scope of technology is to expand its user base. Digital twin user profiles can vary dramatically depending on exactly what is in fact being virtualized.

The user profile of the digital twin for a ship-to-shore crane could be both with the on-site maintenance manager and the in-house technology team at the crane vendor. On the other hand, the user profile for a digital twin covering the sustainability footprint of a cluster of warehousing companies owned by a logistics-focused private equity fund could very well be a portfolio manager in the fund itself.

Joydeep Bose at Trilleco suggests, "The suitable user of digital twins can therefore vary from specialized hands-on operators to strategic management. Training to understand, use, and even customize the digital twin can be one of the key differentiators when client companies assess prospective digital twin solution providers. More innovative players in the digital twin space are flattening out user and organizational learning curves by incorporating low-code and no-code elements into the digital twin technology stack to empower the end-users." 

This article was originally published in Indian Transport & Logistics News' September - Octoebr 2022 issue.