Supply Chain Optimization

What Is a Supply Chain Digital Twin?

Use python to create a model representing your supply chain network to optimize your operations and support strategic decisions.

Article originally published on medium.

A digital twin is a digital replica of a physical object or system.

A Supply Chain digital twin is a computer model that represents various components and processes involved in the supply chain such as warehouses, transportation networks, and production facilities.

Supply Chain Digital Twin with Python — (Samir Saci) — Supply Chain Digital Twin with Python — (Image by Author)

In previous articles, I shared examples of python models designed for specific applications such as transportation routing optimization, supply chain network design or production planning.

In this article, we will try to take a step back and build a Supply Chain Digital Twin that will represent your complete end-to-end operations from production to store delivery.

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What is a Supply Chain Digital Twin?

A goal-oriented network

A supply chain is a goal-oriented network of processes and stock points used to deliver goods and services to customers.

To create a digital twin of a supply chain using Python, you would first need to define the various components and processes that make up the supply chain.

Supply Chain Network of Fashion Retail Company — End-to-End Supply Chain Network — (Image by Author)

This could involve creating data structures to represent warehouses, transportation operations, and production facilities and defining the relationships between these components.

Data & parameters

Next, you would need to collect data on the various components and processes of the supply chain, such as

locations and capacities of warehouses
routes and capacities of transportation networks
production rates of production facilities
customer and store demand

This data could be stored in databases or other data storage systems or directly connected to your warehouse management systems and ERP.

Simulation blocks

Once you have the data on the supply chain components and processes, you can use Python to create algorithms and simulations that replicate the behavior of the supply chain.

Supply Chain Network Digital Twin Model — Additional Optimization Models — (Image by Author)

This could involve using optimization algorithms to

determine the most efficient routes (output) to deliver stores using replenishment orders (input) coming from the store model
improve the picking processes (output) in your warehouse to prepare stores replenishment orders (input)
schedule your production (output) based on demand forecasts built with the stores’ sales historical data (input)

Examples of building blocks

Overall, creating a supply chain digital twin with Python would involve a combination of data collection and analysis, algorithm development, and simulation modelling.

It would likely require a deep understanding of supply chain management and experience with Python programming.

Let us take three examples of elementary blocks built with Python.

How to simulate warehouse operations?

We define a Warehouse class that has attributes for the warehouse’s location, capacity, and inventory.

The add_inventory and remove_inventory methods can be used to add and remove items from the warehouse’s inventory, respectively.

This is a simple example, you can add additional attributes and methods by considering processes productivity, warehouse costs structure, workforce management or picking processes to improve the model.

How to simulate road transportation?

We define a Truck class that has attributes for the truck’s location, capacity, and load.

The move_to method can be used to move the truck to a new location, and the load_cargo and unload_cargo methods can be used to load and unload cargo, respectively.

The solution above can be improved by adding loading and unloading times, timestamps for lead time calculations, costing parameters, or detailing the handling units (pallets, cartons, …).

How to simulate store inventory management?

We define a Store class that has attributes for the store’s location and inventory.

The place_order method can be used to place an order for a given item and quantity.

If the store has enough of the item in inventory, the order will be fulfilled and the inventory will be updated accordingly.
Otherwise, an error message will be printed.

You can improve it by adding the requested delivery date and managing several handling units, including the outbound sales and lead times.

Next Steps

Connect the blocks

Now that you have built your elementary independent blocks you need to connect them

Your store is sending replenishment orders to the warehouse management system using the ERP
Your warehouse prepares the orders, packs the items and put them on pallets
Pallets are loaded in a truck
The truck delivers the pallets to the store

And add external parameters such as customer demand or raw materials supply constraints.