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Quantifying the Benefits of Digital Supply Chain Twins—A Simulation Study in Organic Food Supply Chains

Author

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  • Tom Binsfeld

    (Chair of Logistics, Berlin University of Technology, 10623 Berlin, Germany)

  • Benno Gerlach

    (Chair of Logistics, Berlin University of Technology, 10623 Berlin, Germany)

Abstract

Background : Digital supply chain twins (DSCT) are gaining increased attention in academia and practice and their positive impact on logistics and supply chain management (LSCM) performance is often highlighted. Still, LSCM executives are hesitant regarding DSCT implementation. One reason is the difficulty of making a reasonable cost–benefit comparison, because the benefits of using a DSCT are rarely quantified. Moreover, there seems to be no method of quantifying these benefits as of today. Methods : This article builds upon an extensive simulation study of a constructed organic food supply chain (FSC), containing as many as 40 simulation experiments. In this simulation study, three volatility scenarios in the FSC were simulated and their effects on LSCM performance were measured. Subsequently, dynamic simulation experiments were run to emulate DSCT use. The benefits of using a DSCT were then quantified using a newly developed approach. Results : A conclusive method for quantifying the benefits of using a DSCT is presented and validated. Moreover, the performance evaluation of using a DSCT for the multi-echelon inventory management of an organic FSC is given. Conclusions : The study leads towards a method for quantifying the use of DSCTs that is of importance for research and practice alike. For managers, it additionally provides an exemplary application of said method in the context of organic FSCs.

Suggested Citation

  • Tom Binsfeld & Benno Gerlach, 2022. "Quantifying the Benefits of Digital Supply Chain Twins—A Simulation Study in Organic Food Supply Chains," Logistics, MDPI, vol. 6(3), pages 1-23, July.
    • Handle: RePEc:gam:jlogis:v:6:y:2022:i:3:p:46-:d:858203
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    References listed on IDEAS

    as
    1. Julia Kleineidam, 2020. "Fields of Action for Designing Measures to Avoid Food Losses in Logistics Networks," Sustainability, MDPI, vol. 12(15), pages 1-20, July.
    2. Lohmer, Jacob & Bugert, Niels & Lasch, Rainer, 2020. "Analysis of resilience strategies and ripple effect in blockchain-coordinated supply chains: An agent-based simulation study," International Journal of Production Economics, Elsevier, vol. 228(C).
    3. Dmitry Ivanov & Alexandre Dolgui & Ajay Das & Boris Sokolov, 2019. "Digital Supply Chain Twins: Managing the Ripple Effect, Resilience, and Disruption Risks by Data-Driven Optimization, Simulation, and Visibility," International Series in Operations Research & Management Science, in: Dmitry Ivanov & Alexandre Dolgui & Boris Sokolov (ed.), Handbook of Ripple Effects in the Supply Chain, pages 309-332, Springer.
    4. Sube Singh & Ramesh Kumar & Rohit Panchal & Manoj Kumar Tiwari, 2021. "Impact of COVID-19 on logistics systems and disruptions in food supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 59(7), pages 1993-2008, April.
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