Just in Time (JIT) logistics is a management strategy with roots that can be traced to Japan from the 1970s.  It involves getting goods right before they're needed for the next step on the assembly line.  This allows the manufacture to save costs associated with warehouse storage.  JIT attempts to provide more flexibility to managers by allowing them to quickly adapt to new demands.  But, COVID-19 has exposed JIT supply chain weaknesses.  The trains, ships and trucks that make up the supply chain are facing several challenges as we gear up for the 2021 Christmas season where demands for goods is certain to increase.  The list of goods impacted by stressed out supply chains includes new cars, new phones, computer equipment, contact lenses, books, and fresh produce.  It is evident we need a better balance between resilience and efficiency than JIT can provide.  

Digital Twins

Enter Digital Twins. Digital Twins pulls in information from various sources to duplicate the supply chain in a computer.  Then AI can be applied to help figure out workarounds to crisis such as a pandemic.  For example, Ford maintains more than 50 plants around the world, which use 35 billion parts to produce 6 million cars and trucks each year. Three is a stack of up to 10 layers deep of suppliers' suppliers that turn raw materials into trucks and cars.  Because the supply chain is so complex a digital twins could be used to digitally stress the system my simulating geopolitical, socioeconomic, or even a pandemic. 

Artificial Intelligence

Artificial Intelligence can then be applied to Digital Twins to simulate what-if situations.  This data is used to train AI.  Similarly, AI has been trained to master Chess and Go by playing millions of games against itself to learn how to win against a human opponent.  In the Digital Twin application, the process would train AI what stock to order and when or where to open a new warehouse.

Technology is a requirement

To take full advantage of this technology several things need to happen.  Some of our ports are still operating on pen and paper.  Those schedules and counts need to be inserted into digitized systems so that data can be shared and utilized by digital twins and AI.  We need modernization dollars spent on our ports to enable this.  Also, there are many smaller businesses that service supply chains.  The giants like Walmart and Amazon can afford digital twin technology.  We need investments in small and medium sized businesses so that they can play in this global economy by utilizing Digital Twin technology.  Although the celebration of Christmas is not about gifts, hopefully Digital Twins combined with AI will allow for our children to still have most of their gifts under Christmas tree.