Driving competitiveness with RFID-enabled digital twin: case study from a global manufacturing firm’s supply chain

Abstract

Purpose

The digital twin (DT) has become a heated topic among supply chain and information technology practitioners. While many papers in this area focus on technical tactics and learnings, this research paper aims to evaluate its business implications. According to literature, it has also been a weakly covered topic.

Design/methodology/approach

The research was conducted as a single case study, in which the impact of radio-frequency identification–enabled DT was quantified from the business benefits perspective. The evaluation was carried out using a framework model developed for the assessment identifying key contribution areas and the dynamics explaining how the benefits are expected to land on a business level.

Findings

Implementation of the DT was calculated to provide a significant supply chain performance improvement. The main contributor in the immediate benefits was the reduction in supply chain costs, in person-hours. However, the product availability improvement was conservatively considered in the evaluation, and thus, this paper estimates that it, together with higher cognition tools, constitutes the main financial return in the long run showing in the topline improvement. This paper suggests that the shift to DT can be generally limited by the cost savings perspective.

Originality/value

To the best of the authors’ knowledge, this is one of the first studies released on the business impact of the cutting-edge technical solution area of the DT in supply chain management. In practice, businesses require an understanding of the business implications to decide on the investments in this area; thus, it is a critical part of the discussion.

Citation

Voipio, V., Elfvengren, K., Korpela, J. and Vilko, J. (2023), "Driving competitiveness with RFID-enabled digital twin: case study from a global manufacturing firm’s supply chain", Measuring Business Excellence, Vol. 27 No. 1, pp. 40-53. https://doi.org/10.1108/MBE-06-2021-0084