Internal Supply Chain Investment: 3 Questions to Consider

50% of companies plan to invest $1 million+ in internal supply chain technologies over the next 2 years, according to a 2020 Material Handling Institute survey.

This raises 2 fundamental issues:

• Identifying the right type and level of investment to achieve the operational performance and efficiency you’re aiming for
• Deciding the best way to allocate that spend, so you can meet often volatile customer demand at minimum cost per unit

With  Predictive Digital Twins, you can address both these issues – and make evidence-based decisions encompassing all elements of the internal supply chain from process/product flow, automation, material handling and inventory/storage requirements. Let’s look at the benefits of Predictive Digital Twins in three such scenarios.

What’s the Impact of a Major Process Change on WIP, Traffic Flows and Routing?

If you introduce a new product or line into a facility, what’s the impact on internal logistics? Will new congestion points be introduced, either outside or inside the facility walls? What are the health and safety implications? Can we get raw materials, components or finished products to or from the production or assembly areas smoothly?

By creating a Predictive Digital Twin, you can model such new processes and flows, and identify pinch points BEFORE they emerge in reality – all in a risk-free, digital facility. For example,  Britvic Soft Drinks used our WITNESS Predictive Simulation software to understand how a new high-speed bottling line would affect internal site logistics.

First, the team looked at the potential implications outside of the site. The Predictive Digital Twin of the future facility simulated how vehicles would enter the site, flow through parking bays to loading bays, how loading and unloading would work and how the vehicles would then leave the site. Having made a number of key investment decisions using this virtual site, they then modelled the internal logistics movements, including forklift flows bringing raw materials to the line, taking finished product to warehousing and transporting full pallets to loading bays for loading onto empty vehicles.

Until reviewing the simulation, Britvic hadn’t realised how much congestion would occur on certain routes to and from the loading bays, creating both delays and safety issues. Using the Digital Twin, the team identified a safer, optimal solution – including one-way aisles that segregate vehicles whilst maintaining required logistics efficiency.

As Neil Brinkman, Operations Optimisation Manager, said: 

“We wouldn't have thought about having a one-way system if we hadn't done the simulation. It’s a great way to bring things to life.”

How Do We Optimise Material Handling to Respond to the Hanging Market?

We’re seeing several trends that have a significant (but often overlooked) impact on material handling. One is the move away from single-use plastics towards more sustainable materials. Members of the  UK Plastics Pact achieved a 30% reduction in so-called 'problematic plastics' since 2018, leading to major changes in production processes. Another trend is the rise in consumer bulk-buying during the pandemic – the internal logistics associated with producing a 24-unit pack are very different to that required for a 4-unit pack.

In responding to such changes in customer behaviour you don’t want to buy 30 forklifts if you only need 20. And would you be better shifting to AGVs? Predictive Digital Twins can help you create a water-tight business case for your proposed MHE investments – so you both design and rightsize the fleet to handle materials and products at the right pace and at the lowest cost. If you don’t model future scenarios to understand the potential impact, you might well find yourself investing in the wrong equipment or processes, not to mention incurring damaging extra pain and rectification costs due to unexpected bottlenecks and delays.

What’s the Best Way to Integrate an Automated Storage and Retrieval System Into Our Processes?

Demand for automated storage and retrieval systems is accelerating. The global  ASRS market is projected to grow by 8% by 2025, driven by pressure from just-in-time supply chains and technical skills shortages.

Using Predictive Digital Twins can help you make more informed decisions about both the ASRS investment itself and how best to incorporate it into your facility and business process. For example, how big should the ASRS be? What performance level do you actually need to meet requirements without causing bottlenecks? If you could validate that your processes can cope with 30-second retrieval instead of 20-second retrieval, you could save significantly on the capex of the project.

Importantly, Predictive Digital Twins help you understand how something like an ASRS will also affect upstream and downstream processes. We recently helped a major Tier 1 automotive supplier to build a robust business case for ASRS investment. In addition to modelling the specific capabilities of the ASRS, the project team could see the broader impacts of the investment upon overall process capability. Analysis of the developed Predictive Digital Twin enabled the team to understand the trade-off between the capability of the ASRS and the resulting wider process control logic that they could implement, resulting in a significant lower cost to serve their end customer. They could then home in on the ASRS performance needed to enable that buffer level.

Plan or Invest Based on Evidence, Not Instinct

Given the complex interplay of dynamic processes within most company’s internal logistics, it can be hard, if not impossible, to fully understand the many knock-on effects of people, process or technology changes. And you don’t want to be caught out post implementation, be it through unexpectedly poor end-to-end KPI impact, hidden or new bottlenecks, damaging product delays or costly non value adding logistical issues.

Predictive Digital Twins help you pre-empt problems and pitfalls, giving you an end-to-end view of the dynamic interactions within your internal  supply chain. That way, you can make informed planning and investment decisions, fully confident in a sound de-risked business case.

Learn more by watching our webinar 'Strategically Planning for the Future: Developing Resilient, Agile Processes Using Predictive Digital Twins' by clicking here.